National Insurance Commission (NAICOM) has said that about twelve insurance companies have so been acquired by foreign insurance companies in the last three years. Though, the Commissioner for Insurance, Alhaji Mohammed Kari who made the disclosure in Abuja did not mention the companies acquired but mention the names of the organisations in the acquisitions.
He said “Summarily, we have had three foreign acquisitions into the sector in 2014, two in 2015, five in 2016 and two Companies are now in progress.” Any acquisition of 25 per cent or more of the shares of an insurance company is subject to the prior approval of the National Insurance Commission.
Notable among the deals is Great Nigeria Insurance (GNI) Plc’s completion of the sale of 75 per cent stake to Insurance Resourcery Consultancy Services Limited (IRCSL) to emerge a major shareholder in the firm. Similarly, an Ivoirien insurer, Sunu Assurances Vie Cote d’Ivoire, earlier in the year, acquired a 60 per cent stake in Equity Assurance. Equally, Cornerstone Insurance bought FIN Insurance, making it a subsidiary.
South Africa’s Liberty Holdings is also acquiring a 75 percent stake in UNIC Insurance Plc, a Nigerian insurer, for $12 million. According to Liberty Chief Executive, Thabo Dloti,
“We see Nigeria as a market of the future. It may be having difficulties now, but everything indicates to us that in the long term, Nigeria is going to be a big contributor of growth if you are doing business in Sub-Saharan Africa.”
Standard Alliance Insurance Plc announced that it has formally merged with its sister company, Standard Life Assurance, to become one big insurance company, underwriting life and non-life insurance businesses.
Foreign investors usually enter into the Nigerian market through some form of mergers and acquisitions. Through this deal, a foreign investor can gain access to existing local structures that already possess regulatory licences and, in certain cases, the goodwill associated with an existing strong local brand. These Investors are ready to position themselves for the future, hence the likes of Axa, Prudential, Liberty, Swiss RE, Sunu Group, Saham, etc. have taken position in the industry and in partnership with indigenous companies for development and growth. However, the presence of foreign insurers in the Nigerian market is another incentive expected to boost penetration, technical capacity and service delivery.
