BMI View: Nigeria's insurance industry is starting from a very low level of development, with the market currently worth less than 0.5% of overall GDP. However, while relatively small in scale at present, we believe that the industry has significant growth potential and that it is well placed to expand over the next few years as rising income levels and a growing middle class drive demand for key consumer lines. The potential opportunities on offer should begin to attract increasing interest from overseas investors in what is currently a fragmented competitive landscape with few major providers. The presence of foreign insurers should help accelerate the development of the market, leading to new product lines as well as the expansion of the micro-insurance sector.
|e/f = BMI estimate/forecast. Source: BMI/NAICOM|
|Gross life premiums written, NGNbn||77.16||87.92||100.53||111.02||127.67||145.18||163.54||183.04|
|Gross life premiums written, NGN, % y-o-y||16.0||13.9||14.3||10.4||15.0||13.7||12.6||11.9|
|Gross life premiums written, USDbn||0.48||0.53||0.51||0.54||0.57||0.60||0.64||0.69|
|Gross life premiums written, USD, % y-o-y||15.7||9.9||-4.4||5.4||7.0||5.4||6.0||7.7|
|Gross non-life premiums written, NGNbn||206.11||222.34||227.29||248.01||268.53||293.31||318.51||345.83|
|Gross non-life premiums written, NGN, % y-o-y||7.8||7.9||2.2||9.1||8.3||9.2||8.6||8.6|
|Gross non-life premiums written, USDbn||1.29||1.35||1.15||1.20||1.21||1.22||1.25||1.31|
|Gross non-life premiums written, USD, % y-o-y||7.6||4.0||-14.5||4.1||0.7||1.3||2.2||4.5|
Key Updates And Forecasts
In January 2016, the governor of Nigeria's Cross River State announced plans to introduce a mandatory health insurance scheme for all taxable residents living in the state. Under the scheme, taxpayers would be required to make monthly contributions of NGN1,000 in return for which they would receive free public healthcare.
We have revised a number of our short-term US dollar growth forecast upwards this quarter, in reflection of alterations to our currency market projections. In the life insurance sector we forecast gross premiums to grow by 5.4% y-o-y in 2016 to USD540mn. Non-life premiums will expand by 4.1% to USD1.2bn.
We expect to see further M&A activity in Nigeria's insurance market during 2016 as smaller domestic firms struggle to raise capital, and therefore struggle to meet the capital adequacy requirements stipulated by the National Insurance Commission (NAICOM). The potential consolidation of the industry should provide an opportunity for investors and new entrants looking to gain a foothold in the Nigerian market.
The Nigeria Insurance Report has been researched at source and features BMI Research's independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.
BMI's Nigeria Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Nigerian insurance industry.
- Benchmark BMI's independent insurance industry forecasts for Nigeria to test other views - a key input for successful budgeting and strategic business planning in Nigeria's insurance market.
- Target business opportunities and risks in Nigeria through our reviews of latest industry trends, regulatory changes and major deals, investments and macroeconomic developments.
- Exploit latest competitive intelligence on your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts and views, covering the Life and Non-Life segments, the evolving competitive landscape and business operational risks.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the insurance sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2005-2014) and forecasts to end-2019 for key industry indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
- Life/non-life Premiums: Total premium growth (USDmn), premium growth (% y-o-y), penetration (% of GDP), density (USD per capita) for Life and Non-Life sectors, claims reinsurance, and assets and liabilities.
- Non-life subsectors: Data on gross written premiums for all major Non-Life segments (motor, transport, property, personal accident, health, general liability and credit financial).
BMI’s Insurance Risk Reward Index
BMI’s Risk Reward Indices provide investors (Life and Non-Life) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Growth Drivers & Risk Management Projections
Key data and forecasts to end-2019 focusing on the growth drivers and downside risks to specific insurance lines including:
- Population: Male/female, by age group, active/pensionable/youth population % of total, urban/rural population % of total.
- Freight: Tonnage – air freight, rail freight, road freight, inland waterway.
- Motor: Fleet size by type of vehicle % change y-o-y.
- Epidemiology: Disease Adjusted Life Years and private health expenditure.
Market Overview & Rankings
Illustration of the insurance industry via rankings tables comparing gross written premiums by company (USDmn) and market share (%) for the top 20 players in both Life and Non-Life. This chapter also includes in-depth regional analysis of the market position, business strategies and investment potential of the leading insurance companies.
The insurance Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.