Chief Executive Officer of the Nigerian Stock Exchange , Mr Oscar Onyema said that undercapitalization witnessed by many licensed insurers limit their ability to take on big ticket in country risks as often required in the oil and gas, marine and aviation sectors.
Onyema who stated this in Lagos at insurance sector forum said as at third quarter of 2019, the insurance sector contributed less than one percent to the gross domestic products GDP of Nigeria.
He said that an estimated capital of N200 billion expected to be injected into the Nigerian insurance industry post recapitalisation with a 400 per cent increase in the minimum capital required for life, 333 per cent for non life, 369 per cent for composite and 200 per cent for reinsurance.
Having penetration rate 0. 31 per cent and an insurance density of 6.2 per cent, he said the Nigerian Insurance industry still lags behind its Africa counterparts with South Africa having a penetration rate of 14.7 per cent, Kenya 2.8 per cent, Ghana 1.1 per cent and Egypt 0.6 per cent.
Speaking further he said insurance industry presents perhaps the most remarkable investment case of any industry in Nigeria, despite present challenges, it present numerous opportunities for enhancing the economic fortune of this country.
Onyema who expressed optimism that the insurance regulators recapitalisation plan would enhance performance, bring about efficiency, innovation, profitability, the industry needs significant support to unleash its growth potential.
With the on going recapitalisation exercise, Onyema encourage the insurance operators to provide a special window to fast track the approval prices, provided the operators have demonstrated high standards of corporate governance , deep social impact, high regulatory compliance and enhanced returns for their shareholders.
He stated that Nigerian Insurance industry generated a gross premium income of N448.6 billion in 2018, reflecting a 12 per cent growth from 2017. The sector according to him recorded an increase in its assets base by an estimated sum of N1.3 trillion as at December 31, 2018 reflecting 17 per cent.
