Dr Femi Oyetunji
Nigeria needs to reduce the number of insurance companies operating in the country, says Dr Femi Oyetunji, who is the outgoing group managing director/CEO of Continental Reinsurance as he is retiring on 31 March 2021 after 10 years in the position.
In an interview with This Day, he 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’.”
Expounding on his long-held view on market saturation, he said, “What I will like to see is consolidation, having fewer insurance companies that have the requisite skills, the analytics, the technology and the products that people want. That is what will move us from the current less than 1% penetration to at least double of that size at first, then we can get to 5%, 10% and more.”
“If we don’t reduce the number of insurance companies in this market, we are not going anywhere.”
At present, there are more than 50 insurance companies in Nigeria.
Biggest threat
Dr Oyetunji, a Manchester University trained statistician and first actuarial scientist in Nigeria, says that the biggest threat at the moment is that global players with big capital and all that it takes to drive growth are here and taking a position.
He said, “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. Once the situation improves, the big players from America and Europe will come in and dominate, and that is where the benefits will go.”
Need for more big players
Stressing the need for reinsurers and more big players in the Nigerian market, Dr Oyetunji said, “The only reason people go outside to place their risks is that we have exhausted what we have domestically. There is the local content law that we should take advantage of, but because the capacity is not there, we go outside, and we cannot over-expose our balance sheet to a single risk. There is a limit to what we can take.”
Retention within Nigeria
Dr Oyetunji said, “I believe that we should keep Nigerian premium within Nigeria and African premium within Africa. We can use those premiums to build hospitals, build roads, and build other infrastructures and technology within our societies. Nobody will bring dollars from the US to build schools or roads for us, let us keep what we have within the economy.”
NAICOM suspended the insurance industry recapitalisation exercise for the second time in three years following a court order last December directing the regulatory body to do so.
Source MEIR
