Coronation Research issues 2019 outlook for insurance sector

Category: Banking | Date: 09 Sep 2019 | Posted by: john

Nigeria’s insurance industry has not shared in the growth experienced by other Nigerian financial services, notably banks, pension funds and mutual funds. In fact, it has hardly grown in real terms over 10 years. This is the position of the report from one of the leading research houses in Nigeria – Coronation Research, a part of Coronation Merchant Bank. Without scale, the industry suffers from poor returns on equity. Yet its smallness is also its opportunity. If it were to grow to the level reached by countries with similar GDP per capita, it might grow by a factor of 10 times in real terms in eight-to-10 years. The technological infrastructure and data necessary for the expansion are largely available. Recently, the National Insurance Commission (NAICOM) announced the introduction of new capital requirements, due in June 2020, for the sector. We believe these will reduce the current 59 companies to around 25.