The low capacity and shareholders’ funds of local reinsurers, which make them insufficient to cater for the size of risks exposures in the country, has offered foreign investors opportunities of about 65 percent share of the Nigerian reinsurance market
Meanwhile, Africa Re, a continental reinsurer, said it enjoys about 20 percent of Nigeria’s reinsurance market share, while other Nigerian local reinsurers write about 15 percent and the remaining 65 percent are ceded to foreign reinsurers.
The predominance of foreign reinsurers, mostly European, in the Nigerian reinsurance market has to do with the low underwriting capacity (and shareholders’ funds) compared to the size of the total risk exposures across the country.
Continental Reinsurer, however, said it was partnering with local operators to address the situation.
It stated: “Standing with Nigerian insurers, the Corporation has developed diverse partnerships to support the market development, for example in the mitigation of the forex risk.
Unlike the foreign reinsurers, Africa Re accepts payment of reinsurance premiums in Nigerian bank accounts and in the national currency (Naira).”
The Corporation maintained that in efforts to support the Nigerian economy, it has also invested over $90million in various Nigerian companies, and indirectly created over 570 jobs.
Besides its involvement in the development of the insurance industry through in-house and market insurance training, it is also working with the National Insurance Commission (NAICOM), to enhance public awareness of insurance products in order to boost insurance penetration in Nigeria.
Of the corporation’s gross turnover, which exceeded $642million in the years passed, only 9.5 percent of this income is from mandatory sessions (in 41 member countries) and five percent on treaty business, the bulk of which came from North Africa.