1. THE INSURANCE INDUSTRY IN NIGERIA AND CAPACITY FOR BUSINESS EXPANSION
A PRESENTATION BY:
Eddie A. Efekoha
Managing Director/CEO
Consolidated Hallmark Insurance Plc
THE CHARTERED INSURANCE INSTITUTE OF NIGERIA
2016 INSURANCE PROFESSIONAL FORUM
ABEOKUTA NIGERIA

2. THE NIGERIAN INSURANCE MARKET STRUCTURE
Source: Agusto & Co – 2016 Insurance industry report
Nigerian Insurance Industry
Primary Segment
29 Non-Life Underwriters
15 Life Underwriters
12 Composite Underwriters
2 Reinsurance Firms
Secondary Segment
2 Actuaries
54 Loss Adjusters
577 insurance Brokers
1,900 Registered Agents

3. M & A ACTIVITIES; 2007 POST CONSOLIDATION EXCERCISE
AXA GROUP - MANSARD INSURANCE PLC
NSIA HOLDING - ADIC INSURANCE LIMITED
GREENOAKS GLOBAL HOLDING - UNION ASSURANCE PLC
OLD MUTUAL – OCEANIC INSURANCE LIMITED
SANLAM – FBN LIFE ASSURANCE LIMITED
NEW INDIA INSURANCE COMPANY – PRESTIGE ASSURANCE PLC
SUNU ASSURANCE – EQUITY ASSURANCE PLC
CORNERSTONE INSURANCE PLC – FIN INSURANCE
FBN GENERAL INSURANCE PLC – OASIS INSURANCE PLC

4. REINSURANCE ARRANGEMENT FINANCIAL CAPACITY OF AN INSURANCE COMPANY
CAPACITY DEFINED
THE ABILITY TO SAFELY ASSUME (FINANCIAL) AND UNDERWRITE (UNDERWRITING SKILL) THE INSURABLE RISKS EMANATING FROM OUR LOCAL MARKET
FINANCIAL CAPACITY IS A FUNCTION OF :
CAPITAL BASE
FREE RESERVE
REINSURANCE ARRANGEMENT
CAPITAL BASE
FREE RESERVE
REINSURANCE ARRANGEMENT
FINANCIAL CAPACITY OF AN INSURANCE COMPANY

5. FACTORS IMPACTING INSURANCE INDUSTRY CAPACITY & BUSINESS EXPANSION

6. CURRENT ECONOMIC REALITIES

7. THE NIGERIAN ECONOMY
Terrorism, insecurity & kidnapping amongst other social maladies
Devaluation of the Naira and its effects on insurance stock price and capital base
Slump in the global price of crude oil & Crude oil over-supply.
Continued devaluation of the Naira against other currencies.
Scarcity of petroleum products.
Weakening of the country’s external reserves position.
Insurgency in the North East Region.
Vandalisation of Oil Installations/ scale back of exploration by oil firms
Rationing of Forex amongst eligible applicants
Poverty- reducing consumer purchasing power
Inconsistent economic policies
Volatile capital market

8. The Insurance Market Technology Culture & Education
Dearth of Skills/Expertise
Rising Claims Cost
Premium Flight and Rate Cutting
Delay or non-payment of claims
High cost of accessing reinsurance in international market

9. The Insuring Public Huge Population, Low Insurance penetration
Poverty/Inability to afford Traditional Insurance
Cultural & Religious inclinations- Insurance as a service for the Wealthy.

10. WAY FORWARD ECONOMIC STRATEGIES FOR INSURANCE BUSINESS EXPANSION
Creation of employment thus increasing the purchasing power of Nigerians.
Curbing inflation and Implementation of economic policies to stimulate the economic growth
Tax incentive for certain insurances
GOVERNMENT/REGULATORY STRATEGIES
Enforcement of compulsory insurances
Creation of stricter solvency regulation
Implementation of risk based supervision
Review of Insurance Act 2003 for industry growth
Increase accessibility to credits
Broaden distribution Channels

11. THE WAY FORWARD CONT’D
INDUSTRY / MARKET STRATEGIES
Human capital development to address emerging insurable risks from agriculture, solid mineral, infrastructure, housing and power.
Encourage operators to grow reserve from annual operational profits in other to increase their financial / underwriting capacity.
Speedy implementation of NIA/NCRIB sub-committee recommendations on rating.
Relentless awareness and publicity campaign.
Collaborative investment in technology to improve insurance distribution, reduce administrative cost and thus increase profitability.
Right pricing of our products to be profitable and thus enhance our financial capacity.
Development of Innovative Insurance Solutions/Products to Increase penetration.
Review of treaty arrangement for better coverage, reduce risk volatility and use of reinsurance pools to provide cover for new risks in the market such as sabotage, kidnap etc.
Form strategic alliance through mergers and acquisition.

12. CONCLUSION
Insurance is all about sharing of risks guided by laid down principles and given our population, right leadership that is focused on the issues of power, infrastructural development/renewal, broadening of revenue base, the dogged stance of NAICOM to drive growth and ensure strict compliance with relevant laws and operators who are determined to play according to the rules then Insurance Industry cannot but be the toast of investors and grow at double digits