The Insurance Industry in 2017
The year will be a tremendously better year for the insurance industry than 2016; much depends though on faithful execution of the 2017 N7.5Trillion Budget.
- The embedded insurance value on the recurrent and capital expenditure is in excess of N250 billion on the conservative estimate.
- It is expected that government will continue to engage in meaningful dialogue with restive Niger Delta militants and sustain oil production at 2.2m barrel per day with average price above budget benchmark of $42 per barrel. This will reflate the economy and improve upstream and downstream activities with multiplier effects on other sectors including insurance.
- Strict compliance with extant law on local contents and NAICOM guidelines on full utilisation of local capacity will bring improve income to local underwriters.
- Companies must brace up for the recapitalisation guideline soon to be released but we are still in confusion how RBS will commence at the same time with new round of recapitalisation.
- NAIRA may appreciate significantly with increased forex supply to the gasping economy.
- Some couples of consolidation will occur in insurance industry and more incursion of foreign companies buying over local companies struggling to keep afloat.
- NAICOM will likely conclude sale or disposal of some companies currently under its regulatory management.
- Companies engaging in personal lines insurance and retail will grow better than conventional competitors on the back of significant growth in personal lines and retails.
- Cost may increase in the year if government grants the prayer of Discos.
By Ademayowa Adeduro
Anchor Insurance Company Limited