Foreign Insurers Jostle For Stake In Nigeria’s Insurance Industry

(Sundiata Finance) – Germany-based insurance giant, Allianz has become the latest foreign entrant into Nigeria’s insurance industry. Even though most local players in the industry have found Nigeria’s insurance terrain challenging, foreign players are seeing prospects in the country’s increasing infrastructure spending and burgeoning middle class.
The nation’s insurance sector has attracted an estimated $100 million, equivalent to N36 billion in the last five years, following the entry of global foreign equity investors, who are positioning for prominence in Africa’s most populous insurance market.
Allianz Group, a German world leading insurer and asset manager, with more than 86 million retail and corporate customers, is the latest entrant in the Nigerian market, with an acquisition of 98 percent of Nigerian insurer, Ensure Insurance Plc from its core shareholder Greenoaks Global Holdings Ltd.
With this acquisition, Allianz Group, which manages over 650 billion euros on behalf of its insurance customers, is now present in 17 African countries.
Ensure Insurance Plc offers life and non-life insurance services and generated 11 million euros in gross premiums written in 2016.
The transaction estimated at $35 million is expected to close at the end of 2017 when all necessary regulatory approvals would have been secured.
BusinessDay had exclusively reported on August 17, 2017 that three international insurers including Hollard of South Africa, Allianz of Germany and a local Nigerian company, Wapic Insurance Plc were in the race to acquire Ensure Insurance Plc.
“The transaction gives Allianz access to the fifth-largest insurance market in Africa and is in line with our strategy to capture long-term growth opportunities on the continent,” said Allianz Africa spokeswoman Bettina Sattler.
“It is also a market with significant entry barriers, which is another reason why this acquisition is a great opportunity for us. Entering Nigeria with a team that knows the market was essential for us.”
The German insurer plans to focus on property and casualty insurance, particularly underwriting industrial and speciality risk in the energy sector as well a large complex risks such as infrastructure.
“In the past two years, we have been quite visible in Nigeria, sharing our risk-management expertise in power, oil and gas, as well as cyber insurance,” Sattler said.
“Now that we have a company locally … the retail sector is another growth sector for us.”
At last count, Old Mutual of South Africa has acquired 60.7 percent of Oceanic Life and Oceanic General Insurance; MMI Holdings, a South African JSE listed financial services group acquired 100 per cent of UBA Metropolitan; Sanlam Emerging Markets, a group of South Africa-based investors, bought 35 per cent stake in FBN Life Assurance Limited; France’s Axa acquired a 77 per cent interest in Mansard Insurance valued at €198m; Group NSIA, a company based in Abidjan, Cote d’Ivoire bought 96.15 per cent equity of ADIC Insurance Company; SUNU, a Cote d’Ivoire based company acquired 60 per cent of Equity Assurance, valued at N7 billion; South African insurer, Liberty Holdings Liberty acquired 75 per cent of UNIC Insurance valued at $12 million; Prudential, a British insurance giant invested in Zenith Life insurance; Saham, a Morocan based firm acquired 40 per cent equity stake in Unitrust Insurance; Swiss Re acquired 25 per cent equity in Leadway Assurance; and International Finance Corporation (IFC), a member of the World Bank Group also partnered Custodian & Allied on a $12.5 million Convertible Loan Stock.
Allianz follows British insurer Prudential which last month bought a majority stake in Nigeria’s Zenith Life to gain access to the African country’s fast-growing insurance market.
Allianz Group views Africa as one of the important future growth markets and is now present in 17 countries across the region. Nigeria, a fast growing country with a population of more than 180 million, is the country with the largest GDP on the continent.
“Nigeria is one of the most dynamic economies in Africa. The acquisition of Ensure Insurance Plc. gives us full access to this key insurance market in Africa and marks a major milestone for Allianz’s long-term growth strategy on the continent.
“This new step of development will allow us to offer the best products and services to Nigerian customers in both personal and commercial lines. In addition, as we grow our excellent African teams, we are laying particular emphasis on hiring and developing local talent,” said Coenraad Vrolijk, Regional CEO Africa of Allianz SE.
The Allianz Group is one of the world’s leading insurers and asset managers, with more than 86 million retail and corporate customers. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance, to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing over 650 billion euros on behalf of its insurance customers while their asset managers, Allianz Global Investors and PIMCO, manage an additional 1.4 trillion euros of third-party assets.
“Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we hold a leading position in the Dow Jones Sustainability Index,” the company said.
In 2016, over 140,000 employees in more than 70 countries achieved total revenues of 122 billion euros and an operating profit of 11 billion euros for the group.
In Africa, Allianz is currently present in 17 countries and accompanies clients in 39 countries. Its 1,500 employees achieved regional revenues of 600 million euros in 2016. Allianz also provides micro-insurance for 500,000 low income families and individuals in Africa.
Ensure Insurance Plc. is one of the most innovative and fastest growing insurance companies in Nigeria. The company has undergone a turnaround and transformation exercise, consequent upon its acquisition from Union Bank of Nigeria Plc in 2014 and at which time, it was known as Union Assurance Company Plc.
Ensure provides simple, accessible, relevant and affordable products to the retail segment of the industry and a bedrock of highly secure reinsurance facilities and unmatched technical competence for its corporate business customers.
“We are focused on delivering excellent products and customer services and we intend to be the dominant insurance services provider in Nigeria. Ensure Insurance Plc. recorded astounding growth of 46 per cent and a profit after tax of N1.052 billion (3 million euros) in FY 2016,” the company said in a statement. (BusinessDay)

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