Thursday, December 12, 2019 / 10:16 AM / Bukola Akinyele for Proshare WebTV / Header Image Credit: @nsenigeria
As the clock winds down on the recapitalization deadline for Insurance companies in the country, The Nigerian Stock Exchange (NSE) organized a forum to discuss ways of raising long term capital for the insurers. The form held in Lagos discussed the theme, "Recapitalization: A Panacea For Insurance Industry Growth".
The chief executive officer of the NSE, Mr. Oscar Onyema, in his opening remarks, decried Nigeria's low insurance penetration rate of 0.31%. According to Onyema the low penetration rate showed that the country lagged well behind African counterparts like South Africa with a penetration rate of 14.7%, Kenya with a rate of 2.8%, Ghana with a rate of 1.1% and Egypt with a penetration rate of 0.6%.
According to Onyema, "The insurance industry presents perhaps the most remarkable investment case of any industry in Nigeria and despite present challenges, it presents numerous opportunities for enhancing the economic fortunes of this country. Foreign investors, recognizing these opportunities, have acted accordingly with the likes of AXA, Prudential, Liberty, Swiss Re, SUNU Group, Sanlam Group, taking strategic positions in the industry".
Speaking further, the CEO of the Exchange stated that the NSE had worked hard over the years in ensuring a positive impact on the private sector and, more importantly, listed companies on its platform, through policy advocacy and strategy execution.
He added that the NSE has engaged with the Federal Government on tax incentives for listed companies and exemptions relating to investments in the capital market.
"We are delighted to note that we have made some strides in our discussions, some of which are evident in the proposed amendments to The Finance Bill 2019, which has now passed both houses of the National Assembly' Onyema added.
On the ongoing recapitalization exercise in the country, the NSE boss assured stakeholders that the Exchange would encourage insurance operators, by providing a special window to fast-track the approval process, provided the operators have demonstrated high standards of corporate governance, deep social impact, high regulatory compliance and enhanced returns for their shareholders.
Post recapitalization, we look forward to having our first insurance company listed on the Premium Board of the NSE.
The Head of Research for Coronation Capital, Mr. Guy Czartoryski presenting the report "Nigerian Insurance Industry: From Lagoon to Ocean," highlighted the need for structural growth and real-time growth of the industry, which has been nominal in the last decade.
According to him, total life and non-life Insurance premiums fell at an inflation-adjusted CAGR of -14% between 2008 and 2018.
He believed that Nigeria had a lot to learn from countries like India and Ghana, to deepen its insurance industry as a nation.
For India, Czartoryski highlighted the following;
Speaking further he said neighbouring Ghana has also gained traction in its Insurance industry and also has lessons for Nigeria to learn which include;
The Head of Research for Coronation Capital also stated that Nigeria had enormous opportunities in the areas of partnerships and technology to deepen its insurance penetration.
Some of the opportunities for Nigeria outlined were;
He argued that focusing on micro-insurance and leveraging technology will help to boost Nigeria's insurance penetration rate.