After 40 years in the practice of insurance and actuarial science, Femi Oyetunji, the group managing director (GMD) of Continental Reinsurance Plc is set to retire, but with a suggestion that insurance companies in Nigeria be reduced to 15 or 20.
The reinsurer believes that unless this is done, the nation’s insurance industry will continue to crawl and not be able to increase its level of penetration compared to the size of the population.
Nigeria, Africa’s most populous nation with an estimated 200 million people, currently operates with 52 insurance (underwriting) companies but with a paltry 0.4 percent penetration level, lagging behind South Africa 16 percent, Egypt 1 percent, Kenya 3 percent, and Ghana 1.8 percent among others.
Oyetuji who has managed the largest private reinsurance company in Nigeria in the last ten years told Business Day in an interview that unless the number of operating companies is reduced, the industry is going nowhere.
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“I am going to say the same thing I said in 2005 and I was called a prophet of doom. If we don’t reduce the number of insurance companies in this market, we are not going anywhere.”
Oyetunji said “My personal belief is that 15 to 20 well capitalised, skilled insurance companies will transform the industry. What I will like to see is insurance companies talking to each other, looking for synergy, and saying, let us come together.”
He said the biggest threat at the moment is that global players with big capital and all that it takes to drive growth is here and taking a position, stating that at the end of the day, they will take away the expected benefits.
“We can clearly see the danger, having seen the trend. Why we have not seen many of them at the moment is because of the economic situation, and once the situation improves, the big players from America and Europe will come in and dominate, and that is where the benefits will go. If the global players are based in the US, UK, or Germany, they will take the benefits to those places”
