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Insurance Overview
Educating the Nation about the necessity of insurance offers great investment opportunities
In August 2005, pre-recapitalisation, there were 104 registered insurance and four reinsurance companies in Nigeria. These companies were contributing less than one per cent to Nigeria’s GDP. As with the banking sector, there was a lack of confidence in the insurance industry. In order for the market to grow and mature, the government considered it necessary to raise the capitalisation limits in order to consolidate the market. Under the reforms, the insurance companies were required to recapitalise from NGN150 million for life to NGN2 billion, NGN200 million for non-life to NGN3 billion and NGN350 million for re-insurance companies to NGN10 billion, by the end of February 2007.
After recapitalisation and consolidation, 49 domestic players remain. Industry capitalisation has been boosted by 666 per cent from NGN30bn (USD244m) to NGN200bn (USD1.62bn). However, unlike the banking sector reforms, the consolidation process was far from smooth, being marred by corruption and infighting.
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