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.
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