Nigerian Insurance Sector Listed among Top 10 African Insurance Markets

EbereNwoji

Nigeria has been enlisted among top 10 African insurance markets,excluding South Africa, whose Non- Life Insurance Premiums, dominated African Insurance sector with market size of over US$ 1 billion each in 2014.

Other countries enlisted in the achievement are Morocco,Algeria,Kenya,Egypt,and Angola.

These countries, are next to South Africa,in terms of premium generation in Non- Life business; although at a large distance.
Among the 10 countries, Nigeria ranked third with overall premium income of N386 billion (over Us$1billion).

South Africa,dominates Africa’s insurance markets both in life and non-life business.
Disclosing this at the 43rd African Insurance Organisation’sConferece and General Assembly holding in Marrakech, Morocco, outgoing President of AIO, Mrs.Lamaia Ben Mohmoud, said African insurance premium volume in 2014, totaled US$ 69billion, showing a slide from US$ 72 billion level in 2013.

Mohmoud, in recent African insurance market survey, published in the maiden edition of the African Insurance Barometer, said Life Insurance,accounted for about two thirds of the 2014 total insurance premium in the continent ,with the remainder being generated from Non-Life Insurance, which took lion the share of 71% of total premiums in 2014.
The publication said, in Life Insurance, South Africa’s share of the total market was 87per cent, and 40 percent in Non-Life Insurance .

“Insurance premiums, accounted for 2.8% of African GDP in 2014. With the exception of South Africa and Namibia – where insurance penetration levels reached 14% (Life 11.3%, Non-Life 2.7%) and 7.3% (Life 5.1%, Non-Life 2.2%) respectively.”

The publication, however predicted strong Life insurance premium growth in Ghana, Kenya and Morocco,disclosing that in 2014, African Life insurance premiums, stood at US$ 45.8 billion, translating into a Life insurance penetration rate of 1.9%, significantly below the global average of 3.4%.
It said at an inflation adjusted real growth rate of 1.6%, African Life insurance, also grew much slower than global Life insurance premiums, which increased by 3.4% in 2014.

It said with the exception of South Africa, African Life insurance markets are very small with only five other countries reaching a market size of more than US$ 500m in 2014.
“Among the nine largest Life markets in Africa, Ghana, Kenya and Morocco have enjoyed very strong Life insurance premium growth over the past few years, while the Egyptian market hardly grew at all “, it stated.
The AIO Market Barometer, observed that insurance already plays an important role in South Africa, Mauritius and Namibia,adding that in the sizeable Namibian market, Life insurance is growing faster than GDP,Albeit from very low levels, penetration growth rates are steep in Zimbabwe, Ghana, Kenya and Morocco, while Botswana, Tunisia, Algeria and Nigeria grew in line with GDP.

It said in general terms,the contribution of insurance to GDP was significantly lower than the global average of 6.2% in all other African countries, noting that in more than half of all African countries,insurance penetration was lower than 1%, and that low disposable income would remain the main obstacle to more rapid insurance market development in the continent.