Moroccan insurance Company, Saham Finances, one of the biggest Pan African insurance Groups is considering another major investment in Nigeria, after two initial investments that enhanced the take up of bigger ticket risks by local players, sources familiar with this development tell BusinessDay.
The Company which bought a 40 percent stake in Unitrust for an undisclosed sum in 2014 and in September 2015 acquired a 53.6 percent stake in Continental Re as part of the expansion plan of the group is said to be carrying out due diligence on another non-life company quoted on the Nigerian Stock Exchange (NSE).
A credible source close to the deal told BusinessDay that this time around, the company is gunning for a firm owned largely by equity investors and a former finance minister in Nigeria.
“If this happens, I see a big merger taking place in the market soon, particularly as one of their initial investments in the industry (Unitrust) is also a non-life company,” the source said.
Saham Finances is one of the biggest Pan African insurance Groups with a turnover of $1 billion in 2014.
As an arm of the Saham Group, Saham Finances is present in 26 countries through 49 subsidiaries, including 28 insurance and reinsurance companies through 650 branches throughout Africa and has a team of 3 000 collaborators.
Sunday Thomas, director general, Nigerian Insurers Association (NIA) said during a recent interview that growing interest of foreign investors in the Nigerian insurance market is expected, given the huge potential.
“One is our population, which is an asset to growth and second, is the low penetration rate, meaning that there are a lot of untapped opportunities,” Thomas said.
Analysts at Barclays equity research Limited recently took a hard look at the Nigerian Insurance industry in a report released in September 2015.
The report drove home the point that when compared to the global average insurance industry penetration, Nigeria, which prides itself as aiming to be one of the top 20 economies in the world, is only tapping into 5 percent of its insurance industry potential, while 95 percent of the market potential remains untapped.
Before now, foreign investors including Old Mutual in Oceanic insurance; NSIA in ADIC; Sanlam in partnership with First Bank in FBN Insurance; Saham Finances Unitrust Insurance; AXA in Mansard; Greenoaks in Union Assurance have taken position.
The Barclays report stipulated that these foreign owned insurance companies have taken interest in Africa and Nigeria in particular because of the inherent strong growth potentiality.
These potential are drawn from Nigeria’s huge population of about 174 m of which about 55 percent falls between the ages 15 – 64 years old (i.e. economically active population), a strong GDP per capita of about $3,000 and average real GDP growth rate of about 6.7 percent before 2015.
Founded in 1995 by Moroccan Tycoon and current Minister of Industry, Trade, Investment and Digital Economy, Moulay Hafid Elalamy, Saham Finances also controls CNIA Saada, one of Morocco’s biggest insurers.
MODESTUS ANAESORONYE
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
