Deputy President, NCRIB, Barrister Rotimi Edu (left); Vice President, Mr. Tunde Oguntade; President, NCRIB, Dr Bola Onigbogi; Acting Managing Director/CEO, Heirs Insurance Limited, Dr. Adaobi Nwakuche; Managing Director/CEO, Heirs Life Assurance, Niyi Onifade; and Chairman, Heirs Life Assurance, Dan Okeke at the NCRIB members’ evening in Lagos…on Tuesday, July 6, 2021.
Registered Brokers Endorse Heirs Insurance, Heirs Life
HEIRS Holdings’ grand entry into Nigeria’s deep, but largely untapped, Insurance market will set the industry on “fire” and trigger a special wave of consolidation as existing players struggle to meet new regulatory and capital benchmarks.
At a meeting of the Nigerian Council of Registered Insurance Brokers (NCRIB) on Tuesday, July 6, President of the Nigerian Council of Registered Insurance Brokers, Dr. Bola Onigbogi, harped on prospects offered by the new entrants and the “promise they are bringing on board.”
She endorsed Heirs Insurance Limited (HIL) and Heirs Life Assurance Limited (HLA), describing both companies as “progressive” and having “array of product offerings and promise of excellent service.”
At a paltry 0.36%, Nigeria’s insurance business grapples with low penetration level, meaning that there are much more uninsured Nigerians and ‘insurables’ than are presently covered by the existing insurers.
Ghana, a neighnouring country with relatively much smaller population, has 0.9% penetration level; Kenya has 2.4%; and South Africa, 13.0%.
Placed side by side, the combined population of the three countries (Ghana, Kenya and South Africa) is far less than the Nigeria’s estimated 200million people.
The numbers reinforce prospects for industry growth in Nigeria, especially as the economy gradually recovers from the COVID-19 pandemic that caused a 15% decline in industry gross premium to barely N550 billion.
To strengthen the sector and deepen the market, industry regulator, the National Insurance Commission (NAICOM), set new share capital requirements of N10bn for General Insurance Companies; N8bn for Life Insurance Companies; and N18bn for Composite insurance firms. The original capital benchmarks were N3bn, N2bn and N5bn respectively.
HIL and HLA kicked off full operations with paid-up share capital of N10 billion and N8 billion respectively.
Experts, who spoke to Prime Business Africa, noted a “likely consolidation in the insurance sector,” given the new capital requirements and the present outlook of HIL and HLA .
It is also believed that the entrance of new agile and innovative players would enhance and deepen insurance penetration.
New product offerings, innovations in client onboarding and indemnification, enhanced service quality and regulatory enforcement of critical insurance are pillars required to improve insurance culture in Nigeria and support the overall industry growth.
In a chat with Prime Business Africa on Thursday, Finance Analyst, Mr Abiola Rasaq said the new capital requirements would strengthen insurance companies with the necessary capacity to underwrite big-ticket and complex transactions.
“Hopefully, this will also reduce the reinsurance level and increase the domestication of underwriting businesses, especially in the oil & gas sector, where some players tend to seek foreign underwriters due to the relative capacity of local insurance firms.”
The analsyst, who also has active interest in consumption of insurance services, noted imminent consolidation in the sector, occassioned by the new capital requirement. He said it would not only enhance underwriting and balance sheet capacity but also help to strengthen the human capital base and technology adoption, two essential ingredients for extending the frontiers of innovation in the sector.
Mr Abiola, in agreeing with the registered brokers, predicted “imminent consolidation” in the sector following the entry of “new agile, innovative player like Heirs, which is determined to disrupt the industry and positively change the narratives of insurance in Nigeria.”
He described the entry of new challengers in the game as “quite exciting, positive for corporate and retail clients and positive for existing underwriters, as the industry brews up innovative offerings to increase the overall pie.”
Dr. Adaobi Nwakuche, the Acting CEO of Heirs Insurance Limited, and Niyi Onifade, the CEO of Heirs Life Assurance had hosted well over 300 insurance brokers at the NCRIB’s Lagos Secretariat on Tuesday, where the issues of industry growth and consolidation were in focus.
“I have no iota of doubt in my mind that Heirs Insurance and Heirs Life are companies to watch out for in the market,” Onigbogi, who leads all registered insurance brokers in Nigeria told the public.
“A critical examination of your workforce and your enthusiasm to host this members’ evening at a time like this is a pointer to a greater business exploits you are poised to accomplish,” she said.
Describing the companies as broker-friendly, Mrs Onigbogi endorsed the twin companies as partners for brokers to collaborate with.
Nwakuche, on behalf of Heirs Insurance Limited, had acknowledged NCRIB as an important stakeholder in the business of insurance, liaising between customers and insurance firms and emphasised the mission of Heirs Insurance in aligning with industry growth expectations.
“We are on a mission to democratise insurance and make it accessible to any and everyone. To achieve this, we paid careful attention to the needs of every customer across all the social circles, while building our products. We are pleased to say that we have simple and affordable insurance plans for everyone and we are confident that, with the support from NCRIB, we will deliver on our promise of excellent service delivery to the public,” she said.
For Heirs Life Assurance, Onifade, its CEO, introduced some affordable products the specialist life insurance company would be bringing to the market, including its savings and investment products, term life and group life plans for employees. He noted that collaboration with NCRIB would advance both companies’ ambition of providing customers with simple, quick and accessible insurance services.