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Chuks Udo Okonta
Managing Partner and Co-founder, Verod Capital Management, Danladi Verheijen, has spotlights the enomous opportunities in Nigeria’s insurance industry, making it a haven for investments.
The leaders of the Lagos-based private equity fund manager which invests across multiple sectors in Nigeria and Ghana, in an interview with Verheijen, noted that the current size of the insurance industry in Nigeria is a screaming opportunity. “To give you a sense of what I mean, Nigeria’s insurance density (gross premium per capita) is about $6.20. Morocco is about 16 times larger and South Africa is 123 times larger. So we are literally at the starting point,” he said.
Identifying factors driving demand for insurance in Nigeria, he posited that the first is regulation, adding that where proof of insurance is now required for more things, like accessing bank loans, pension accounts, amongts others. These new regulations, he said are really pushing people – especially corporates – to insure more.
He noted that Nigeria’s demographics are the second factor contributing to growth in the sector. “Our current population of 200 million people, growing at 3.2 per cent per annum, is expected to double by 2050 (which is not that far away). Nigeria’s average median age is 18 years old, and this young, growing, and dynamic population is great for the insurance industry,” he said.
The third driver, according to him is new insurance products that meet the needs of the population, and the fourth is building significant awareness for these products.
“Thus far, we have invested in life and general insurance companies and we are looking at also investing in health insurance firms. We’ve learnt you need to create insurance products that are simple to understand and easy to buy. We’re also exploring ways to let people move from paying annually for insurance, to making quarterly or perhaps even monthly payments. There is a lot of room for innovation in this sector,” he posited.