By Ebere Nwoji
As the insurance Industry regulatory body, the National Insurance Commission prepares to enforce the regime of the Europe -adopted Risk Base Supervision model in Nigeria, most sector operators have stormed foreign investment markets in search of foreign partners for mergers and acquisitions.
The operators also said their earnest search for foreign investors was also necessitated by the need to expand their operating capital and be in position to handle big business tickets, which are presently taken abroad despite the local content policy of the federal government.
Those who have already visited the global investment market said the coast is bright and promising as foreign investors themselves see Nigerian insurance landscape as a virgin land worth investing in as a result of Nigeria’s huge population.
At the fore front of this adventure were Niger Insurance Plc, Royal Exchange Assurance Plc Universal insurance, International Energy insurance among others.
These companies said they are already discussing with various foreign investors who have indicated interest to invest in Nigeria.
NAICOM had few years back said it would introduce the Risk Base Supervision model in Nigeria come July this year.
The commission, said introduction of the model will witness review of existing capital of the industry operates.
The risk-based supervision, according to the World Bank, is a supervision approach that considers each of the risks that companies face and through a structured process, identifies the risks that are most critical to the financial viability of the institution.
Under the model, the supervisory on-site review process looks at the management of the key risk areas of a company and focuses attention on the critical net risk exposures.
Introduction of the model in insurance industry is a sharp migration by the NAICOM from the hitherto compliance-based supervision model and is part of its steps to build globally competitive industry.
Speaking on his company’s effort towards injecting foreign funds to its operations, Managing Director, Niger Insurance Plc, Kola Adedeji told THISDAY that his company is looking for foreign investor not only for growing its capital size but for blending and greater exposure.
“Aligning with foreign investors has a lot of advantages, in area of product development, the skill set, knowledge, we want them to blend and we need greater exposure, so that we can innovate. We can’t do it on our own but I must tell you there are a lot of interests in Nigerian insurance industry from outside the world, a lot. Anytime you go out you meet enquiries. So the board decided we bring in foreign investors for reason of greater exposure”, he said.
Also, Managing Director, International Energy Insurance, Mr. Peter Irene confirmed that his company is searching for foreign partners.
“We have plans for that and many foreign investors are interested in Nigerian firms for investment. If you look round, you see the trend. Many investors coming into the industry come with huge funds, I don’t think local people can get that kind of money. So from what we heard from our existing investors, foreign investors are coming with foreign capital. Most of them are not Nigerians. Most of the reinsurance we are doing both those that are done locally are still transferred abroad because they have more technical knowhow, so they are bringing foreign capital.”
Also Alhaji Muktari of Royal Exchange Assurance said the company is talking to about three foreign investors. “I don’t want to mention names; we are talking to about three international investors and two local investors. That is also going to be concluded between now and end of this last quarter. We are also working towards listing a bond in Nigeria Stock Exchange and all the documents, process and approval from the Securities and Exchange Commission is being tidied up. We hope to list bond of about N3 billion with the Nigeria Securities and Exchange commission in the next two months.
ThisDay
