Nigeria plans to more than triple the value of its insurance market in four years by improving the reputation of the industry, Insurance Commissioner Daniel Fola said.
"Our people don't trust insurance," he said in an interview yesterday in Dubai. "We've done a considerable amount of housekeeping to make sure the companies respect the rules."
The value of insurance contracts should rise to about one trillion naira ($6.4 billion) in 2017, about 3 per cent of gross domestic product, from 300 billion naira now, or less than one per cent of GDP, he said. Penetration should increase to 22.5 per cent of the insurable population in four years from 10 per cent currently, Fola said.
Compulsory motor-vehicle insurance, which makes up most contracts now, should remain at about 10 per cent by 2017, while life insurance should constitute 7 per cent, general business insurance 3 per cent and petroleum companies' insurance 2.5 per cent, he said.
Oil and gas businesses will continue to contract international companies to insure their Nigerian operations as the capacity of local insurers is limited, Fola said. As Africa's largest oil producer, Nigeria produced about 1.9 million barrels of crude a day in December, according to Bloomberg data.
The Bloomberg Nigerian Stock Exchange insurance index, a measure of the 10 most liquid insurers on the Lagos-based bourse, has gained 11 per cent so far this year, outpacing a 5.8 per cent rise in the All Share.