BMI View: We have a positive outlook for both Nigeria's life and non-life insurance segments over the coming years. Key growth drivers reside in the country's improving economic conditions, which means that with rising incomes and a growing middle class, increasingly more Nigerians will be able to afford long-term and short-term insurance contracts as their rates of auto and home ownership increase. We note, however, that currency movements due to falling oil prices and national security issues may weigh on the growth potential of life and non-life premiums.
|Gross life premiums written, NGNbn||66.51||77.16||87.92||100.33||110.95||127.63||145.14||163.54|
|Gross life premiums written, NGN, % y-o-y||14.7||16.0||13.9||14.1||10.6||15.0||13.7||12.7|
|Gross life premiums written, USDbn||0.42||0.48||0.53||0.49||0.48||0.50||0.53||0.57|
|Gross life premiums written, USD, % y-o-y||12.6||15.7||9.9||-7.2||-3.2||4.2||6.3||8.0|
|Gross non-life premiums written, NGNbn||191.14||206.11||222.34||228.71||248.56||268.89||293.63||318.45|
|Gross non-life premiums written, NGN, % y-o-y||8.8||7.8||7.9||2.9||8.7||8.2||9.2||8.5|
|Gross non-life premiums written, USDbn||1.20||1.29||1.35||1.13||1.07||1.05||1.07||1.11|
|Gross non-life premiums written, USD, % y-o-y||6.7||7.6||4.0||-16.3||-4.9||-2.0||2.0||3.9|
Key Updates And Forecasts
With a share of nearly 70% in total written non-life premiums in 2016, non-life insurance is by far the more important segment in Nigeria's insurance sector. Notably, with insurance penetration rates of around 0.2%, non-life insurance is only slightly more developed than life insurance. We expect, however, that life insurance will continue to outpace its non-life counterpart over the next five years, which means that increasingly more Nigerians are recognising the benefits of life insurance. Overall, both major segments will show rapid growth rates over the foreseeable future, which to a large extent are related to Nigeria's economic development.
In contrast to the past decade, the Nigerian population will see their income levels rise over the coming years, providing them with greater purchasing power. This, in combination with growing awareness of the benefits of life solutions, should provide significant growth boosts over the forecast period, as Nigerians are increasingly gaining trust in entering long-term contracts. The growth potential of life insurance is, however, challenged by a lack of transparency of the operating practices of some operators and low average life expectancy among the Nigerian population, which limits potential demand for traditional life products, such as retirement and life savings products.
Non-life insurance is also expected to reap benefits of the population's increasing prosperity as well as the country's growing middle class. Growth opportunities for domestic and foreign investors will particularly reside within the motor and property insurance lines, as we see increased vehicle ownership and urbanisation paired with rising home ownership. In addition, by 2019, half of Nigeria's population should be younger than 25 years of age, which means that there will be important changes in overall consumer spending and clear increases in demand for non-life solutions across all major sub-segments.
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.