Nigeria: A Toast of Foreign Investors

Feb 11, 2019 | This Day; All Africa

In recent times, Nigerian insurance sector, despite its low returns on investment, has become the toast of foreign investor. In this report, Ebere Nwoji looks at a number of firms taken over by the investors as well as discussions for further take over of existing firms.

With recent acquisition of 29.9 per cent stake in NEM Insurance Plc by a leading African Private Equity Fund Manager, Advanced Finance and Investment Group (AFIG Funds), which now positions the group as the majority shareholder in the progressive 60 year-old NEM Insurance and total acquisition of Ensure insurance by the Allianz group in July 2018 as well as on-going enquiries on the fundamentals of other insurance firms in Nigeria by foreign investors, the Nigerian insurance sector, seems to have become an object of scramble and partition for investment by investors from both European and other African markets.
Indeed, foreign investors are really taking advantage of huge market position of Nigeria due to population, low prices of insurance stocks and apathy of indigenous investors towards insurance stocks due to low yields to corner the existing firms to their side and if possible, chase indigenous investors out of the market.
A close look at what is trending in the industry in the past few years shows that dilution of ownership structure of the existing firms is becoming so customary in our time that choice of insurance firms that will underwrite their big time businesses by the insuring public is almost dependent on the stake of one foreign investor or the other in existing indigenous firms.
As a result, some insurance firms especially the hitherto big old firms who because of some kind of conservative attitude to investment have remained stand alone are now turning back on their own to woe foreign partners to come and take stake in their firms to not only inject fresh ideas also position them on the same pedestal with new generation companies with foreign investor partnership in order to win certain high ticket businesses.
Both Niger Insurance plc and RoyalExchange General Insurance plc before now, told THISDAY that they were looking for foreign partners that would help reposition and consolidate on their positions as market leaders. Read more on All Africa.

Source: All Africa