The total market capital of a particular tier two bank gave a value higher than sum total of 15 insurance companies listed in the Nigeria stock Exchange (NSE).
Research by Business Day shows the insurance companies’ capital of N100.15 billion is lower than the N426 billion total market capitalization of Tier 2 lender Stanbic IBTC Holdings.
The above weak market price of insurers calls for urgent recapitalization that will pave the way for these firms to be stronger, take on more risk and compete on a global arena.
Insurers in Africa most populous nation and largest oil producer are operating as low penetration levels, for lack of consumer trust, low implementation of compulsory insurance and a shortfall of professionals that are adequately skilled, undermining growth of operators in the sector.
An analyst who spoke to BusinessDay was of the view that “Even though Nigeria has shown positive signs of development in the industry there is still room for more growth when compared to other emerging markets.”
He pointed out that approximately only 1.5% of all Nigerian adults are covered by insurance today and as such insurance industry in Nigeria is still growing and developing which he described a big challenge.
He continues, ” However, it only contributes 0.7% toward Gross Domes