Non-Life Insurance Dominates Insurance Industry in Nigeria, Reports Timetric14 May 2013 • by Natalie Aster
The Nigerian insurance industry experienced strong growth over the review period, supported by relatively stable macro-economic conditions and a favorable investment climate. The insurance industry in the country is very small, yet highly crowded and competitive. The key segment driving the overall industry is the non-life segment, which accounted for the largest share of 61.6% of the industry’s total written premium in 2012. The Nigerian insurance industry is regulated by the National Insurance Commission (NAICOM), which controls the operations performed by all entities including insurance companies, reinsurance companies, insurance brokers, loss adjusters and intermediaries. For low income earners, the Nigerian government has concertedly promoted micro insurance; however a poor understanding among consumers of the benefits of such products and inefficient distribution channels has limiting their spread.
According to the report “The Insurance Industry in Nigeria, Key Trends and Opportunities to 2017” the Nigerian economy is growing as a result of the country’s export activities. Nigeria is the largest oil producer in Africa, and the oil sector accounts for more than 95% of export earnings and around 40% of government revenues. The government of Nigeria is planning to make huge investments in energy infrastructure in order to explore their natural gas reserves. Nigeria holds the largest natural gas reserves in Africa and most of sites have not yet been explored completely. A growing economy as a result of these activities will positively impact the Nigerian insurance industry, particularly the non-life segment.
The Insurance Industry in Nigeria, Key Trends and Opportunities to 2017
Published: March, 2013
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In collaboration with the German Agency for International Cooperation (GIZ), in 2012 NAICOM conducted country-wide diagnosis research on the viability of micro insurance in Nigeria, in order to target the country’s low income population. The authority conducted several workshops and seminars to raise public awareness of micro insurance, and is now almost in the final stage of releasing norms for developing a reliable micro insurance framework.
The Nigerian government has planned to expand the reach of Sharia-compliant takaful policies in order to target the country’s large Muslim community. For the effective implementation and supervision of takaful operations in Nigeria, NIACOM has embarked on a series of capacity building programs for its managerial and technical staff. In 2012, NAICOM provided the draft takaful guidelines to the relevant stakeholders for their input; these guidelines are expected to be implemented during 2013.
More information can be found in the report “The Insurance Industry in Nigeria, Key Trends and Opportunities to 2017” by Timetric.
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