Pan-African reinsurance company Africa Re has an unfair, dominant share of the Nigerian reinsurance market, which is causing local reinsurance companies to perform below expectations, according to reports from the region.
This is according to online Nigerian insurance and pension news reporting website Inspenonline, which, citing an unnamed industry expert, says that Africa Re enjoys a controlling 65% share of the Nigerian reinsurance market, with another 5% being ceded abroad.
That Africa Re enjoys such a stronghold on the Nigerian reinsurance market is making it increasingly difficult for local reinsurers to compete and ultimately perform as expected, with Continental Reinsurance, Nigerian Reinsurance, and WAICA Reinsurance fighting over a 30% share of the Nigerian reinsurance market.
The industry expert that spoke with Inspenonline claims that most underwriters are showing preference to foreign reinsurers over local firms such as Nigerian Re and Continental Re, a trend that is having a negative impact on local companies.
Furthermore, the expert said that the National Insurance Commission (NAICOM), the region’s insurance and reinsurance industry regulator, has simply not done enough to reverse the trend and encourage underwriters to utilise the experienced, but troubled local reinsurance players.
Without a reversal of the trend or some effort from NAICOM to ensure local Nigerian reinsurers are able to obtain a more equal share of the market, companies like Continental Re, Nigerian Re, and WAICA Reinsurance will continue to underperform.
Africa Re is owned by its 41 member countries, the African Development Bank, more than 100 African insurance and reinsurance companies, along with 4 non-African investors, so it could be that it receives some preference on reinsurance business across the continent, which could be suggested by its hugely dominant share of the Nigerian reinsurance industry.