The coming of Stanbic IBTC Holdings and Heirs Holdings into Nigeria’s insurance industry will cause a major disruption in the country’s insurance space.
Analysts say both intuitions have large insurance buy that have been managed over the years by other insurance companies, but with their coming on board, there is the tendency that they will move such accounts to their subsidiary.
Besides that, they argue that the new insurance companies will take advantage of their group’s large customer base to grow their retail sales, thereby increase competition among companies.
For example, Stabic IBTC has a large customer base from banking, pensions where it is the largest player with over 1,709,000 registered clients assets under management worth over N2 trillion. While Heirs on the other hand is also a conglomerate with investment portfolio in power, oil and gas, financial services, hospitality, real estate and healthcare sectors.
The news of their coming, announced about two weeks ago in a National Insurance Commission (NAICOM) advertorial, has sent jittery into the market, with some players already raising concern on new market completion.
NAICOM in an advertorial published on Thursday, July 24, announced that four firms – Heir Insurance Limited (General); Stanbic IBTC Insurance Limited; Heirs Life Assurance Limited and Enterprise Life Assurance Company Nigeria Limited have indicated interest to operate in Nigeria.
The publication said, “The NAICOM has received applications from the under listed companies for registration as insurance companies to transact insurance business in Nigeria.
“In fulfilment of the statutory provisions of extant laws for the registration/licensing of Insurance Companies, the general public is hereby informed that the Commission has commenced the process of registering the companies. Members of the public are requested to submit/report any objection or otherwise against these registrations to the Commission within 21 days from the date of this publication, please.”
Meanwhile, the companies have also picked chief executive officers: Heir Insurance Limited (General), Olaniyi Stephen Onifade: Stanbic IBTC Insurance Limited, Akinjide Orimolade; Heirs Life Assurance Limited, Abah Okoriko, and Enterprise Life Assurance Company Nigeria Limited, picked, Fumilayo Abimbola Omo.
An insurance CEO, who does not want his name mentioned, says, “I expect that their coming will change the market structure, particularly with Stabic IBTC and Heirs that already have brokerage firms that are also doing very fine.”
The CEO however states that the space is big enough for every one after all we have only done less than 1 percent, stating that there are lots of untapped opportunities in the industry particularly in the retail space.
Anselem Igbo, chief executive, Stanbic IBTC Insurance Brokers Limited, says during a virtual interactive session with journalists that insurance penetration in the country is at an all-time low and this is not favourable for the well-being of individuals, businesses and the economy in general.
Igbo, who is not certain about Stanbic IBTC coming into underwriting business, says insurance business is a unique one that enables clients effectively manage their risks.
Such risks, he notes, may include theft, accident, robbery, injury, man-made and natural disasters, and even death. Insurance helps to achieve peace of mind through risk transfer and efficient insurance claims, he notes.
There are currently 55 registered (underwriting) insurance companies in Nigeria, with 28 as general business underwriters, 14 life underwriters and 13 composite underwriters.
