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McKinsey & Company predicts bright future for Nigerian insurance sector

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A global management consultancy services firm, McKinsey & Company, has predicted a bright future for the insurance sector in Nigeria and some other African countries, describing Africa as one of the world’s hot regions for insurance penetration.

In a report entitled “Africa’s insurance market is set for takeoff,” released by the global firm on Sunday, the company said it has noted that steady economic growth in most countries combined with a largely underdeveloped insurance sector have positioned the continent as the second-fastest-growing region for insurance globally after Latin America.

The report pointed out that the coronavirus pandemic which had profoundly affected both lives and livelihoods has seen consumers cutting back on discretionary expenditure, including insurance, in the face of income and market volatility.

The report reads:

“The African insurance market’s immaturity points to significant scope for the growth of Africa’s insurance industry which is valued at about $68 billion in terms of GWP and is the eighth largest in the world—although this is not equally distributed across the continent.

“The Pension Reform Act of 2014 in Nigeria has benefited both consumers and the insurance industry alike, leading to a 70 percent growth in the sale of pension products in that country between 2012 and 2017.

“The shift to digital channels in Africa is well underway, and with that comes greater expectations of service delivery. While we are seeing a number of insurers starting to digitise customer journeys, significant opportunities still exist to accelerate this in many markets.

“The COVID-19 pandemic has accelerated this trend, by driving demand for digital and remote channels, and we expect this to continue beyond the crisis.

“However, the impact of the coronavirus is expected to delay rather than alter the pattern and potential of future growth. And in some cases, the crisis may accelerate existing trends, notably the shift toward digital and remote channels, which has the potential to offer new opportunities to both insurers and consumers.

“We believe that a strategic approach that takes into account the unique characteristics of African markets and looks to collaborate with regulators to drive reform and safeguard consumers could unlock significant value not just for industry players but for society more broadly at this critical time.”

The report further noted that markets in the region have been inconsistent in terms of size, mix, growth, and degree of consolidation, with 91 per cent of premiums concentrated in just ten countries.

“In the Southern Africa region, 54 percent of premiums are for life insurance. Non-life insurance, however, plays a larger role in Anglophone West Africa, North Africa, East Africa, and even more so in francophone Africa.

“The level of maturity in these six regions is low, relative to global reference countries, as measured by insurance density premium per capita.

“While most African countries have experienced double-digit insurance growth in CAGR in local currency over the last five years, this has mostly been driven by economic growth, rather than deepening market penetration.”

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BREAKING:CBN Orders Banks To Pay New Naira Notes Over The Counter

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BREAKING: Old Naira Notes Deadline Stays - Emefiele
CBN Governor Emefiele

Contrary to its earlier directive, the Central Bank of Nigeria (CBN) on Thursday ordered commercial banks to begin the payment of the new naira notes to customers over the counter.

This is according to a Thursday statement signed by the Bank’s Director, Corporate Communications Osita Nwanisobi. According to him, it is part of moves to ameliorate the plight of Nigerians who are finding it hard to get the new notes.

“In line with this resolve, the Governor, Mr. Godwin Emefiele, has directed deposit money banks (DMBs) to commence the payment of the redesigned naira notes over the counter, subject to a maximum daily payout limit of N20,000,” the statement added.

While admitting the difficulties Nigerians have faced in trying to get money through Automated Teller Machines (ATMs), the apex bank reassured citizens of its commitment to making the process seamless.

It also vowed to prosecute racketeers of the new naira notes, saying it was working with relevant agencies to make that happen.

“We have equally noticed the queues at Automated Teller Machines (ATMs) across the country and an upward trend in the cases of people stocking and aggregating the newly introduced banknotes they serially obtain from ATMs for reasons best known to them. Also worrisome are the reported cases of unregistered persons and non-bank officials swapping banknotes for members of the public, purportedly on behalf of the CBN,” it warned.

“We wish to state unequivocally that, contrary to the practice of these unpatriotic persons, it is unlawful to sell the naira, hurl (spray), or stamp on the currency under any circumstance whatsoever.

“For the avoidance of doubt, Section 21(3) of the Central Bank of Nigeria Act 2007 (As amended) stipulates that ‘spraying of, dancing or matching on the naira or any note issued by the bank during social occasions or otherwise howsoever shall constitute an abuse and defacing of the naira or such note and shall be punishable under the law by fines or imprisonment or both.’

“Similarly, Section 21(4) states that ‘It shall also be an offence punishable under Sub-section (1) of this section for any person to hawk, sell or otherwise trade in the naira notes, coins or any other note issued by the bank.’”

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BREAKING:Emefiele Assures Nigerians Of Banks Accepting Old Notes After Deadline

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BREAKING: Old Naira Notes Deadline Stays - Emefiele

Central Bank of Nigeria (CBN) Governor Godwin Emefiele on Tuesday assured Nigerians that commercial banks  will still accept old naira notes from customers after the February 10 deadline.

The assurance came as he met with the ad hoc committee set up by the House House of Representatives on the CBN naira redesign policy.

The lawmakers had accused Emefiele of breaching section 20 of the CBN act.

READ ALSO: Gbajabiamila Threatens To Arrest Emefiele Over Old Naira Notes’ Deadline

The Speaker of the House, Femi Gbajabiamila, had accused the CBN governor of breaching Section 20 of the CBN Act which, according to him, mandates commercial banks to accept old notes even after the deadline.

“After the expiration date, such naira notes changed will no longer be legal tender but it also says that even five months, three months, or two months after, even in June, all the old notes presented to the bank shall be redeemed by the bank,” Gbajabiamila had stated in a Thursday speech.

Emefiele, while addressing the ad hoc committee, said he agreed with the lawmakers on Section 20 of the CBN Act.

“Section 20 says even after the old currency has lost its legal tender status that we are mandated to collect that money. And I stand with the House of Reps on this,” he stated, adding that, “if you have your money that you have not been able to send to the bank, we will certainly give you the opportunity to bring it back into the CBN to redeem it. Either you pay it to your bank account or you want to do an exchange — we give you. You will not lose your money. This is the assurance I give to Nigerians.”

 

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BREAKING: Gbajabiamila Threatens To Arrest Emefiele Over Old Naira Notes’ Deadline

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BREAKING: Gbajabiamila Threatens To Arrest Emefiele Over Old Naira Notes' Deadline

Five days to the deadline for the old naira notes to cease being valid, Central Bank of Nigeria Governor Godwin Emefiele is still in trouble over the policy.

House of Representatives Speaker Femi Gbajabiamila on Thursday threatened to order the arrest of Emefiele to appear before the committee investigating the old naira notes withdrawal.

Gbajabiamila said this on Thursday after the Majority Leader of the House, Ado Doguwa informed him that Emefiele and others shunned the invitation to a meeting on Wednesday.

Responding to the statement, Gbajabiamila said he would not hesitate to order the Inspector General of Police, Akali Baba to issue an arrest warrant to compel Emefiele to appear before the committee.

READ  ALSO: Old Naira Notes Deadline Stays – Emefiele

Gbajabiamila added that the House ought to adjourn today to prepare for the elections, however, they will stay back to resolve the currency swap crisis.

“I will, pursuant to the authority conferred by Section 89 (1)(d) of the Constitution of the Federal Republic of Nigeria and Order 19 (2)(1) of the Standing Orders of the House of Representatives, not hesitate to issue a warrant to the Inspector General of the Nigeria Police Force to compel the attendance of the CBN or Managing Directors who fail, refuse or neglect to respond to the summons by the House of Representatives,” he said.

He also stated that Emefiele’s deadline is not consistent with section 20 of the CBN Act, noting that the banks are compelled to accept the old notes even after the expiration of the deadline.

The Presidential candidate of the APC, Bola Tinubu, who is believed to be The Godfather of Gbajabiamila, also spoke against the policy on Thursday during a rally.

Tinubu alleged that the policy is targeted at his presidential ambition.

 

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