Axa SA, a foreign insurer active in Nigeria, sees the peaceful manner in which the country is handling its first transition in political power in decades as supporting economic growth in the country and beyond.
Jean-Laurent Granier, head of Axa’s global property and casualty business commenting on the just concluded presidential election said, “We think that political stability and the respect of democratic rules in this vote can only consolidate development potential in Nigeria and other African countries,”.
A largely peaceful election in which Muhammadu Buhari defeated President Goodluck Jonathan has bolstered investor confidence, he said.
Nigeria’s insurance penetration is about a fifth of the average on the continent and less than a 20th of the level in South Africa, underscoring the opportunity in a country with 177 million people.
“We are not making a political interpretation of this outcome,” Granier said. “This reinforces and confirms our will to grow in Nigeria.”
Axa has disposed $9.7 billion of assets in developed markets since 2010 to invest in faster-growing nations, including African markets.
In December, it spent €198 million to buy a majority stake in Mansard, Nigeria’s fourth-largest insurer.
Also last month, Paris-based Axa completed the purchase of a 7.2 percent stake in pan-African reinsurer Africa Re for $61 million.
Insurance penetration in Nigeria, as measured as a percentage of premiums to gross domestic product, was 0.68 percent in 2012, according to a KPMG report in August.
That compares with a 3.5 percent average for Africa and 15.4 percent in South Africa, the continent’s biggest insurance market, according to figures from PriceWaterhouseCoopers in October.
Insurance premiums tend to increase faster than economic growth in Nigeria and African countries, as companies and households adjust their coverage to “catch up” with rising living standards, Granier said.
“The corporate insurance market was first to develop and now the market for individuals is opening,” he said.
Health insurance products sold through corporate or individual policies, car-insurance needs and micro-insurance initiatives are contributing to insurance expansion in Nigeria, as in other fast-growing African markets, he said.