Indigenous insurance companies are bracing for keen competition in the industry because foreign multinationals are showing serious interest in the Nigerian market and are buying many underwriting firms. This is aimed at gaining a larger share of the underwriting business in the country. Investigations revealed that the foreign investors were eager for the local market because of the huge population and vast untapped underwriting business in the country. The renewed competition between indigenous and foreign insurance firms is making the local underwriters to consider moving away from their traditional products and becoming innovative in order to compete effectively in the new era. For instance, Group NSIA, a company based in Abidjan, Cote d’Ivoire, has bought 96.15 per cent equity of Diamond Bank Plc in ADIC Insurance Company Limited. Assur Africa Holding, a consortium of three European Development Finance Institutions, and two private equity firms, recently acquired 67.68 per cent shareholding in GTAssurance Plc and changed its name to Mansard Insurance Plc. The DFIs are FMO (Netherlands Development Finance Company), DEG (German Investment Corporation), and PROPARCO (French Development Finance Company), while the private equity firms are Development Partners International, United Kingdom and Africinvest, Tunisia Sanlam Emerging Markets, a group of South Africa-based investors, bought 35 per cent stake in FBN Life Assurance Limited with First Bank of Nigeria Plc owning the remaining 65 per cent. Old Mutual Plc, also from South Africa, has bought 70 per cent stake in Oceanic Life Insurance Limited and now operates under the name of Old Mutual Nigeria Life Assurance Company Limited. Old Mutual bought over the insurance firm from Ecobank after acquiring controlling stake in Oceanic Bank International, while Cressida Nigeria Limited has 29 per cent stake in the company and the residual one per cent is owned by private individuals. It was discovered that other banks are negotiating with foreign investors interested in their insurance subsidiaries because they did not want to sell to local underwriting firms. Sanlam Emerging Markets, which has stakes in FBN Life, is in talks to buy Fin Insurance Company. The Chief Executive Officer, Sanlam Emerging Markets, Mr. Heinie Werth, who noted that the firm had substantial investment in FBN Life, said a major point of attraction for investing in the Nigerian market was the visibility of developmental projects and prospects for growth in the economy.
The Punch, May 15 Page 27
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