AM Best, a rating agency has expressed deep concerns about the future of Nigeria’s insurance sector.
The agency said that the fluctuating oil price is hitting the Nigerian market hard and is obviously affecting growth of the sector.
Deniese Imoukhuede, Associate Director, Analytics at AM Best, said: “Fluctuating oil prices are hampering Nigeria’s insurance market amid significant growth potential given shifting demographics.”
She explained that shifting oil prices have caused snarl on Nigeria’s economic expansion.
The situation the analyst observed is in turn creating a difficult operating environment for the country’s insurance market.
However, she added, significant potential still exists for insurers, since Nigeria has the largest economy in Africa, with an estimated gross domestic product of $574bn.
Additionally, oil production continues to play a heavy role in Nigeria, since more than 90% of its exports are derived from the trade of petroleum.