The Nigerian Insurance Sector: Unlocking Value through enforcement of compulsory insurances
September 15, 2011 / BGL
At the end of the insurance sector consolidation and recapitalisation, part of the reform of the entire financial system in 2007, expectations were high that the sector would unlock the huge untapped value in the industry and deliver exponential growth similar to the experience of the banking sector post consolidation in 2005.
Unfortunately, despite the huge market for insurance, growth in the industry has remained flat in the last four years, partly due to the global economic recession. To a large extent the industry has been unable to deploy the new capital to grow earnings and mobilise long term investible funds.
Rather, a large portion of capital raised might have been lost to the financial market crisis through equity investment.
The sector has therefore not been able to take over from banks in the provision of core services such as underwriting performance bonds and guarantees and credit bonds for large ticket transactions……