audit tax advisory presentation at the insurance future summit by kunle elebute, partner, kpmg...
TRANSCRIPT
AUDIT TAX ADVISORY
Presentation at the Insurance Future Summit by Kunle Elebute, Partner, KPMG
FINANCIAL SERVICES
April 2008
Trends in Global Insurance and Preparing Nigeria for the Global Challenge
ADVISORY
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
The Place of Insurance
Nigeria on the Global Landscape
Lessons from Other Markets
Overall Market Outlook
Key Success Factors
Outline
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The Place of Insurance1
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The nexus between insurance development and economic growth is well established
A 2006 USAID study of the insurance sector in developing countries revealed certain key findings:
“A substantial and growing body of evidence suggests that robust and efficient insurance markets improve
an economy’s ability to organise and allocate its resources”
“When insurance markets have the necessary capacity and infrastructure to deliver their variety of
services, synergies arise between insurance and other financial services that improve financial sector
effectiveness and economic productivity”
“Countries are much more likely to experience sustained growth if their insurance markets develop
well”
“Economies that experience more growth do so in part because they have access to efficient and
effective insurance products”
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Nigeria on the Global Landscape2
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The global insurance market is witnessing significant growth…
Global GDP grew by 3.9% in real terms during 2006 to $48,342 billion above the 10 year-average of 3%. Emerging
markets expanded by 6.9%, twice as fast as the industrialised countries.
Worldwide insurance premiums in 2006 were $3,723 billion, composed of $2,209 billion in life insurance and $1,514 billion in non-life, representing growth rates of
5%, 7.7% and 1.5% respectively.
The life market growth rate was the highest since 2000 and faster than overall economic growth in most
countries.
Emerging market growth trebled the rate from 2005
Source: Swiss Re Sigma No.4/2007
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
World Industrialisedcountries
Emergingmarkets
South and EastAsia
Latin Americaand Caribbean
Central andEastern Europe
Africa Middle East andCentral Asia
Growth Rate Average Annual Growth Rate (1999-2005)
Real Pre
miu
m G
row
th R
ate
s (%
)
Life Business Development By Region
0%
5%
10%
15%
20%
World Industrialisedcountries
Emergingmarkets
South and EastAsia
Latin Americaand Caribbean
Central andEastern Europe
Africa Middle East andCentral Asia
Real Pre
miu
m G
row
th R
ate
s (%
)
Growth Rate Average Annual Growth Rate (1999-2005)
Non-Life Business Development By Region
Source: Swiss Re Sigma No.4/2007
The global insurance market is witnessing significant growth…
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From Warehousing risks… ToUnderstanding, restructuring & transferring risks
Risks inherited from policyholders
Risks pooled and borne by insurers
Traditional reinsurance programs
Large diversification + good underwriting
Large amount of capital Securitisation Hedging Dynamic ALM
Management and intermediation of risk- risks taken from policyholders- risks pooled and structured by
insurers- risks externalised through
reinsurance programs and financial markets
Efficient diversification Moderate capital with appropriate
capital management
The Old World The New World
Focus on product returns without properly measuring risk/ volatility
Independent management of assets and liabilities
Accounting rules not “marked-to-market” (MTM)
Few rated companies Few institutional investors
Focus on product risk + value Integrated ALM Accounting rules approaching
MTM Many rated companies More institutional investors
Source: Adapted from AXA
From To
The insurance business model itself is transforming…
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Key trends driving global insurance market growth
Strong economic growth, underpinned by improved macroeconomic fundamentals, especially in the emerging markets
Favourable regulatory changes and tax incentives
Introduction of mandatory cover in certain areas (motor third party liability health etc.)
Increased demand for life products
- Increased retirement provisions in countries with ageing population
- Government shift from public to private pension schemes
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Regulatory Influence Universal Banking
Payments: Interswitch,Valucard, ATMC, NIBBS, CSCS,
Other providers: Securicor, Excel Cash Services, Rating Agencies Reformed
Security & Exchange
CommissionNational Insurance
Commission
National Pension
CommissionCentral Bank of Nigeria/ Nigeria Deposit
Insurance Corporation
Insurance Capital Markets
Banking
General
Reinsurance
Life
Issuing houses
Stock brokers
Specialized FIs
Banks – Universal,Community, Microfinance
Discount Houses
Development banks
Finance Companies
Pension Funds Management
Pension Fund Administrators
Pension fund custodians
Infrastructure Providers
Portfolio Managers
Investment AdvisersTrusteesPMIs
The Nigerian FS Industry Structure
The Structure of the Nigerian Financial Services Industry Today
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0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Brazil Russia India China SouthAfrica
Nigeria
The Nigerian insurance sector remains globally insignificant and underdeveloped
Life Non-Life
Am
ou
nt
(US
$ M
illion
)
PREMIUMS IN EMERGING ECONOMIES
Source: “World Insurance in 2006”, Swiss Re, Sigma No. 4/2007
< 1% of GDP in 2006
< 5% of banks by total assets
Employs about 20, 0000 staff (the size of top 3 Nigerian banks)
< 1% of GDP in 2006
< 5% of banks by total assets
Employs about 20, 0000 staff (the size of top 3 Nigerian banks)
Source: Agusto Industry Estimates; 2006
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Nigeria vs the BRIC(S)
Life Premium & Non-Life Volumes; GDP & Population in 2006
Life
(US $ m)
% of
Total
(Life +
Non-
Life)
World
share
%
Non-Life
(US $ m)
World
Share
GDP
(US $ bn)
Populatio
n
(m)
Insuranc
e Density
(US $)
Insurance
Penetration
%
Brazil 13,699 45.1 0.62 16,691 1.10 1,067 188.9 160.9 2.8
Russia 571 2.7 0.03 20,932 1.38 929 142.5 150.9 2.3
India 37,220 86.5 1.68 5,812 0.38 901 1,119.5 38.4 4.8
China 45,092 63.7 2.04 25,713 1.70 2,613 1,323.6 53.5 2.7
South
Africa
33,106 81.3 1.50 7,624 0.50 255 47.6 855.8 16.0
Nigeria 112 15.6 0.01 605 0.04 112 134.4 5.3 0.6Source: “World Insurance in 2006”, Swiss Re, Sigma No. 4/2007
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Lessons from Other Markets3
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Lessons from Other Markets - Brazil
Summary of major factors contributing to the rapid growth of the insurance industry in Brazil:
Government induced economic reforms through an economic stabilisation plan
- Economic stability leading to the adoption of the national currency as a trustworthy value reference;
Improved transparency and disclosures, leading to enhanced confidence and trust in the system by the public
Opening of the market to foreign participants in 1996, leading to transfer of capital, introduction of new products, technologies and knowledge that helped to enhance industry performance;
Introduction of a modernisation process based on IAIS* principles adopted in the most developed markets; and
Introduction of several policy changes to stimulate the interest of the Brazilian populace to the benefits of insurance leading to a more mature market.
*IAIS – International Association of Insurance Supervision
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Lessons from Other Markets - Brazil
These policies have increased the contribution of insurance to GDP from 0.8% in 1994 to 2.55% in 2006.
These conditions provide a favorable environment for non-life insurance (benefited by the growth of economic activities as a whole), as well as for life insurance lines (a protection instrument which had lost its attractiveness during the economic instability period).
Contribution of Insurance to GDP
Life & Non-Life Ratios
Source: Ministry of Finance, SUSEP; 2006
Today, Brazil is the largest insurance market in Latin America, with 2006 total premiums of US $ 29.6 billion.
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Lessons from Other Markets - India
The insurance sector in India has come a full circle from being an open competitive market to nationalisation and back to a liberalised market again…
No legislation to regulate insurance business prior to 1912
In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed
However, the Life Insurance Companies Act, put Indian companies at a disadvantage to foreign companies
Mushrooming of insurance companies to about 176 by 1938
Many financially unsound concerns were also floated suring this period & failed miserably
Several frauds during 1920's/30's sullied insurance business in India
Colonial Era(Pre 1938)
The first comprehensive legislation was introduced with the Insurance Act of 1938
The Act provided strict State control over insurance business
Nationalisation of life insurance business under the Life Insurance Corporation (LIC) in 1956
Non-life) insurance business/general insurance was nationalised with effect from January 1, 1973 & grouped into four companies
The Malhotra Committee was formed in 1993 to initiate insurance sector reforms
Insurance sector in India was liberalized in March 2000
Nationalisation Era(1938 – 2000)
Lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership
Presently, there are about: 16 life insurance companies and 15 non-life insurance companies in the market
Potential for growth in the market is immense e.g. nearly 80% of Indian population is without life insurance cover as at July 2007
Life insurance premiums & general insurance premiums account for 2.5% & 0.65% of the country's GDP respectively
Liberalisation Era(2000 till date)
Source: India 2010; A Lloyd’s View, June 2007
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Lessons from Other Markets - India
Liberalisation has led to a marked increase in India’s premium levels and private companies have gained a 34.6% market share
Source: India 2010- A Lloyd’s View
Premium Levels (2006)
USD 6.0bn
Nominal annualpremium growth
13% (during 2006)
Premium density (2005)
India: USD 4.4 per capita
Regulator Insurance Regulatory and Development Authority (IRDA)
Main non-life industry association
General Insurance Council
Main life industry association
Life Insurance Council
India Insurance Environment
Premium Levels (1995-2006)
Premium levels vs. market share by segment (2006)
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Lessons from Other Markets - India
The Indian insurance sector consists of public sector undertakings, PSU’s, foreign and private companies. However, the private companies are steadily building their customer base and currently account for 34.6% of the market share. Strengths of the private companies are highlighted below:
Small & Flexible
Good Staff, Systems,
Processes & Data
Greater Focus on Underwriting
Availability of smaller less disparate workforce which enables quick response to changing market conditions
Best-in-class staff with high remuneration
Implementation of high quality systems and processes
Adoption of international best practice standards to provide high quality data
Emphasis placed on sound underwriting procedures with high-quality back office processes
Strong Claims-Paying
Reputation
Greater efficiency in information capture leading to better reputation for claims settlement
Product Focus Aggressive product
development
Source: India 2010- A Lloyd’s View
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Lessons from Other Markets - India
Distribution Channels Key Growth Drivers
70-75% of all Indian non-life premiums are distributed through direct sales agents of the insurance companies.
Bancassurance is slowly picking up.
Brokers account for a small percentage of all premiums distributed.
Growing consumer class
Influx of foreign direct investment
Public Private Partnership (PPP) infrastructure development
Insurer quality and client education
Catastrophe exposure
Source: India 2010- A Lloyd’s View
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Lessons from Other Markets - China
Comparisons in 2004 Amount $ bn
Position
World Rank
Total Insurance Premium 52.2 1.61% 11
Insurance density per capita
40.2 502 72
Insurance penetration/GDP
3.26% 7.85% 42
Between 2000 and 2005
Gross Domestic Investment rose from
33.7% of GDP to 41.2%
Gross savings rose from 37.9% of GDP to 49.5%
Corporate savings rose from
22.1% of GDP to 30.2%
Household savings rose from
12.9% of GDP to 16.8%
By 2006, there were 93 insurance institutions in China with nearly 2 million employees accounting for 40% of the financial sector workers.
Total premiums rose from $30.6 million in 2001 to $493 billion in 2005, representing $54 per head and 2.7% of GDP, of which $46.16 billion was for life, $ 17.52 billion for property and health and accident $6.41 billion.
Assets of insurers by the end of 2005 amounted to $0.21 trillion.
China is the world’s 11th largest insurance market by total premium volume, up from 16th in 2000, with premium volume of $62 billion.Source: China Insurance Regulatory Commission; The Geneva Association,
January 2008
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Lessons from Other Markets - China As the administrative and regulatory authority of China’s commercial insurance,
the CIRC considers the development of insurance as its most important task and strives to make China insurance industry big and strong.
Focusing on the theme of development, the CIRC not only concentrates on efforts to boost the industry, but also emphasises risk prevention. Major regulatory measures since 2004 are as follows:
Improving the Market Access
Mechanism
Broadening Insurance Fund Management
Channels
Increasing Financing
Channels of Insurance Companies
Improved market access mechanism for insurance branches to encourage law-abiding insurance companies with sound internal control system and adequate solvency to establish branches and increase market competition
Permitted direct investment of insurance funds in the stock market
Investment of foreign-exchange insurance funds in overseas markets
Permitted insurance companies to invest in subordinated debts issued by banks and convertible corporate bonds Permitted insurance companies to issue subordinated debts, which provided a new financing channel for fast-developing insurance industry and helped to improve solvency status
Promoting Reform
Administrative Examination &
Approval System
Strengthening Risk Prevention
Strengthening Internal Management
Strengthening supervision of solvency adequacy
Reinforcing on-site inspection
Strengthening supervision of fund management
Premium rates filed at CIRC as opposed to the previous practice of approvals
Simplification of the life insurance clauses
Adjustment of auto insurance premium rates to address different risk elements and establish a market-oriented pricing mechanism
Source: China Insurance Regulatory Commission Press Release, 2007
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Lessons from Other Markets - ChinaChina will remain an attractive market for foreign insurance companies for the following reasons:
At 40%, China has one of the highest personal savings rate in Asia indicating a huge potential for personal-retirement savings and protection insurance.
Insurance plays a major role in channelling funds into state infrastructure projects
China’s population is ageing fast and the government has recognised that private firms will play an essential role in creating a viable pensions system for China.
Total insurance penetration (premiums per GDP) at 3.3% is still very low, compared to an 8.1% world average.
Reform & Innovation
Deregulation of the Sector
Development of sound risk
practices
Development society & economy
The Schematic below presents an overview of the development of China’s insurance industry
Establishment of a modern insurance system
Pioneered listing on overseas stock markets
Improved corporate governance and optimised process operations
No restrictions for foreign invested insurance companies, except for life which must be established as a joint venture
Sustenance of balance between opening up and risk control
Cooperation of international insurance supervision
Adoption of principles of IAIS Development of corporate internal
controls Development of long-term risk
prevention framework
Provision of long-term funds for economic construction, supporting investment and promoting economic growth
Source: The Geneva Association, January 2008
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Lessons from Other Markets – Vietnam Although China has achieved
impressive compound growth of around 30% per year, it has been outstripped by Vietnam, which has grown at an even rate of 45%.
Vietnam has a rapidly growing population of around 82 million people and a real GDP growth rate consistently around 7% for the last five years.
Economic growth rates are forecast to remain around this level at least in the medium term.
Life insurance premium income grew at an annual rate of 67% in the five-year period ending in 2004 before taking a pause in 2005. From 1999, when the new foreign entrants arrived, to 2004, total life insurance premium grew from less than $20 million to just over $500 million
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Lessons from Other Markets – Vietnam
The insurance market is regulated by the Department of Insurance under the Ministry of Finance. The department supports the insurance industry with a number of measures that include:
- Promoting the network of professional agents and other distribution channels introducing greater flexibility to invest insurance funds by allowing the establishment of investment management fund companies
- Allowing grants of additional licenses to foreign companies promoting self-regulation of the industry
- Encouraging use of insurance funds to develop the country’s economy.
Customers
Tied Agents/ Agency
Channels
Brokers
Bancassurance
(Local & Internationa
l Banks)
Post Offices
Call Centres
Distribution Channels Employed in Vietnam
The regulatory body and insurance companies are focusing onimproving the quality and professionalism
of their distribution channels & agents respectively.
Source: Vietnam Association of Insurers
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Lessons from Other Markets – Vietnam
Deregulation of market access
Deregulation of distribution
systems
Development of insurance products and
prices
Regulations compared to best practice
regulatory regimes
100% participation of foreign owned insurers and brokers
Deregulation of the insurance industry in Vietnam
Freedom of insurers in the life and non-life segments to develop their distribution channels
Insurers formulate their own strategies for agencies and compile the agency’s commission tables
No minimum capital requirement for establishment of branches
Insurers create and determine products (non-compulsory) prices through market competition
Impartial regulations for local and foreign insurers
Disclosure and consumer information Transparent regulatory process
Source: Studies on the Competitiveness and Impact of Liberalization in Financial Services:The Case of Insurance services; UNDP May 2006
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Overall Market Outlook4
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There are clear indications of the emergence of a vibrant insurance market in Nigeria
Population
(millions)
Per Capita GDP (US $)
GDP Growth (2007E)
South Africa 47.1 5,516.0 4.58%
Nigeria (Select)
28.0 4,000.0 N/A
Nigeria (Nationwide)
80.4 1,000.0 7.58%
Tunisia 10.3 3,2226.0 6.00%
Morocco 33.8 2,264.0 4.31%
Egypt 80.4 1,557.0 5.88%
Underlying Market Demand in Nigeria
Source: Standard & Poor’s, Afrinvest Research; January 2008z
GDP growth and per capita income have doubled in the last five years compared with the previous two decades.
Increasing literacy levels from 60% in 2006 to about 68% in 2007.
A survey conducted by Standard & Poor’s revealed that “the wealthiest 20% of Nigeria’s population accounts for 80% of national output (an estimated market of 28 million people with a per capita GDP of US $4,000 per annum).
The survey further revealed that this select population is responsible for much of underlying consumer market demand that is beginning to come to light in Nigeria.
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
There are clear indications of the emergence of a vibrant sector in Nigeria
The key growth drivers over the medium term include the following:
Ongoing Economic Growth
Industry Consolidation
Compulsory InsurancesMortgage/Real
Estate/Infrastructure Spend
Pension ReformLocal Retention (oil & gas, aviation, marine,
solid minerals)
MAJOR GROWTH CATALYSTS
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Overall Outlook – the shape of things to come
Market-induced consolidation will lead to a restratification of the sector.
Diversification into related financial services/ businesses.
Entry by foreign operators in the form of equity-based partners and technical management teams will modernize and standardise the industry.
The industry will increasingly imbibe world class practices and processes.
Increased investment in people and technology as key business enablers
Bancassurance and other innovative channels will play a major role in improving penetration levels in the industry (aligns with the retail strategy of banks).
Marketing and asset management skills will flow from banking to the insurance sector.
Enhancement in the regulatory capacity and more proactive regulatory measures to achieve and maintain better standards including higher levels of professional and ethical conduct in the industry.
Growth in the middle class will drive emergence of life business.
Listing of insurance companies will stimulate and enhance public awareness of insurance.
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Overall Outlook - What will characterise the industry in the medium term?
Insu
ran
ce
Pen
etr
ati
on
GDP Per Capita
Dormancy Early GrowthSustained
GrowthMaturity
NigeriaToday
VISION2020
• North America• Western
America
• India
• Egypt
Insu
ranc
e Gap
• South Africa
….. The Nigerian insurance sector is on the cusp of metamorphosis. However, key constraints/ dependencies exist in the institutional
framework and critical market infrastructure.
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
The insurance breakthrough: How big is the opportunity?
Key challenges to be addressed to unlock the full potential of the Nigerian insurance sector include the following:
REGULATOR OPERATOR
Realignment to international norms and practices
- Solvency
- Corporate governance
- Transparency
Risk-based approach
Enforcement
Regulatory convergence/collaboration (e.g. CBN)
Consumer rights protection
Skill and capacity gaps
- Managing large, diversified businesses
Risk and capital management
Investment/asset management
ROI pressure – meeting market/stakeholder expectations
NIA as a self-regulating organisation (SRO)?
Insurance education/literacy and public awareness
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Key Success Factors5
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Key Success Factors
Clear articulation of vision of Nigerian insurance sector, within the context of national economic agenda.
Effective engagement of all stakeholders
- Government
- NAICOM
- NIA
- Operators
Focused, disciplined execution with periodic progress reporting and measurement
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Appendix
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Life Insurance Growth, Penetration and Density by Region
Life Insurance Growth, Penetration and Density by Region
Premiums (US $ M)
Real Growth
Share of World
Market (%)Premiums in %
of GDPPremiums per Capita (US $
M)
2006 2006 2006 2006 2006
America 601,784 4.2 27.24 3.44 672.6
North America 572,860 3.8 25.93 3.95 1,731.8
Latin America & Caribbean 28,923 14.1 1.31 0.98 51.3
Europe 940,586 12.4 42.57 5.30 1,119.6
Western Europe 927,431 12.3 41.98 5.95 1,862.9
Central & Eastern Europe 13,154 19.2 0.60 0.64 40.3
Asia 602,266 3.6 27.26 5.00 154.6
Japan & Newly Industrialised Asian Economies
500,871 0.6 22.67 8.38 2,368.4
South & East Asia 96,627 23.6 4.37 2.06 28.6
Middle East & Central Asia 4,769 5.3 0.22 0.34 15.8
Africa 35,468 21.6 1.61 3.40 38.3
Oceania 29,214 6.1 1.32 3.36 896.3
World 2,209,317 7.7 100.00 4.48 330.6
Industrialised countries 2,033,051 6.6 92.02 5.53 2,026.0
Emerging Markets 176,266 21.1 7.98 1.42 31.6
OECD 1,976,063 6.6 89.44 5.24 1,645.0
G7 1,609,706 6.8 72.86 5.66 2,225.7
EU, 15 Countries 887,928 12.8 40.19 6.20 2,197.8
NAFTA 579,674 4.0 26.24 3.78 1320.1
ASEAN 20,299 2.5 0.92 1.96 41.4
Source: The Geneva Association, January 2008
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Non-Life Insurance Growth, Penetration and Density by Region
Non-Life Insurance Growth, Penetration and Density by Region
Premiums (US $ M)
Real Growth
Share of World
Market (%)Premiums in %
of GDPPremiums per Capita (US $
M)America 727,945 1.5 48.08 4.17 813.6
North America 685,440 1.0 45.27 4.72 2,072.2
Latin America & Caribbean 42,505 10.0 2.81 1.44 75.4
Europe 544,295 0.5 35.95 2.97 626.0
Western Europe 501,374 -0.2 33.11 3.09 966.6
Central & Eastern Europe 42,920 9.2 2.83 2.09 131.4
Asia 198,553 4.4 13.11 1.63 50.4
Japan & Newly Industrialised Asian Economies
142,750 1.8 9.43 2.35 664.6
South & East Asia 41,670 14.5 2.75 0.89 12.3
Middle East & Central Asia 14,133 5.7 0.93 1.02 46.8
Africa 14,200 6.2 0.94 1.36 15.3
Oceania 29,102 -1.5 1.92 3.34 891.0
World 1,154,094 1.5 100.00 3.04 224.2
Industrialised countries 1,357,129 0.6 89.63 3.65 1,336.2
Emerging Markets 156,965 10.8 10.37 1.27 28.2
OECD 1,362,097 0.6 89.96 3.57 1,120.1
G7 1,121,609 0.4 74.08 3.84 1,508.6
EU, 15 Countries 469,400 -0.3 31.00 3.12 1,107.4
NAFTA 693,698 1.0 45.82 4.52 1,579.8
ASEAN 12,678 -0.6 0.84 1.01 21.4
Source: The Geneva Association, January 2008
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Total Insurance Growth, Penetration and Density by Region
Total Insurance Growth, Penetration and Density by Region (2006)
Premiums (US $ M)
Real Growth
Share of World
Market (%)Premiums in %
of GDPPremiums per Capita (US $
M)America 1,329,729 2.7 35.71 7.61 1,486.3
North America 1,258,301 2.2 33.79 8.67 3,804.0
Latin America & Caribbean 71,428 11.6 1.92 2.42 126.7
Europe 1,484,881 7.5 39.88 8.27 1,745.7
Western Europe 1,428,806 7.3 38.37 9.04 2,829.5
Central & Eastern Europe 56,075 11.4 1.51 2.73 171.6
Asia 800,819 3.8 21.51 6.63 205.0
Japan & Newly Industrialised Asian Economies
643,621 0.9 17.29 10.74 3,033.0
South & East Asia 138,297 20.8 3.71 2.95 40.9
Middle East & Central Asia 18,901 5.6 0.51 1.37 62.5
Africa 49,667 17.5 1.33 4.77 53.6
Oceania 58,316 2.2 1.57 6.70 1,787.3
World 3,723,412 5.0 100.00 7.52 554.8
Industrialised countries 3,390,180 4.0 91.05 9.18 3,362.2
Emerging Markets 333,231 16.3 8.95 2.69 59.8
OECD 3,338,160 3.9 89.65 8.81 2,765.1
G7 22,731,315 4.1 73.36 9.49 3,734.3
EU, 15 Countries 1,357,328 7.6 36.45 9.32 3,305.1
NAFTA 1,273,373 2.4 34.20 8.29 2,899.9
ASEAN 32,977 1.3 0.89 2.98 62.8
Source: The Geneva Association, January 2008
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Listed Insurance Companies Pre-ConsolidationS/N Name of Company Market
Capitalisation (Nm)
1 Acen Insurance 142.5
2 AIICO Insurance 609
3 Amicable Assurance 8.41
4 BAICO Insurance 99
5 Confidence Insurance 30.5
6 Cornerstone Insurance 442
7 Crusader Insurance Plc 627.6
8 First Assurance Plc 96.4
9 Great Nigerian Insurance Plc
678.8
10 Guinea Insurance Plc 39.6
11 Lasaco Assurance Plc 272.2
12 Law Union & Rock Insurance
276.5
13 Linkage Assurance 564.3
14 Mutual Benefits Assurance
180
15 N.E.M Insurance Co Plc 180.1
S/N Name of Company Market Capitalisati
on (Nm)
16 NFI Insurance Plc 199.5
17 Niger Insurance 1, 196.3
18 Prestige Assurance 497.9
19 Royal Exchange Assurance
1,109.3
20 Security Assurance 36.5
21 Standard Alliance Plc 318.5
22 Sun Insurance Nigeria Plc 1.78
23 UNIC Insurance 288.3
24 West African Prov. Insurance
833.3
Source: Nigerian Stock Exchange; 31 December, 2006
© 2008 KPMG Professional Services, the Lagos member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Nigeria.
Listed Insurance Companies Post-ConsolidationS/N Name of Company Market
Capitalisation(N’bn)
1 Amicable Assurance 0.227
2 Baico Insurance 1.48
3 Law Union & Rock 202.08
4 Confidence Insurance 0.128
5 Continental Insurance 63.27
6 Cornerstone Insurance
32.13
7 Lasaco Assurance 6.99
8 Custodian & Allied 26.00
9 Equity Assurance 33.91
10 Great Nigerian Insurance
5.70
11 Guinea Insurance 3.53
12 Crusader Insurance 24.94
13 WAPIC Insurance 55.26
14 OASIS Insurance 252.52
15 Airline Services 15.97
S/N Name of Company Market Capitalisation(N’bn)
16 Acen Insurance 0.57
17 Consolidated Hallmark
26.46
18 Standard Alliance 16.27
19 Security Assurance 145.8
20 Mutual Benefits 28.67
21 N.E.M Insurance 24.34
22 Niger Insurance 40.51
23 Sovereign Trust 12.61
24 Universal Insurance 56
25 Linkage Assurance 19.03
26 Unic Insurance 14.43
27 ST Assurance 30.04
28 Prestige Assurance 11.9
29 AIICO 16.57
30 Royal Exchange 16.07Source: Nigerian Stock Exchange; 7 March, 2008