Niger Insurance Plc was established in August 1962 as a specialist Life company under the name Yorkshire Insurance Company. As a result of the Federal Government’s indigenisation of foreign owned companies, the company was acquired by the then state owned NICON.In 2002, during the wave of privatisation of government owned companies, NICON’s 29% share of ownership was acquired through an MBO by Management Alliance Company Limited (MACL). MACL was established by the company management and other leading shareholders. As at December 2008, MACL’s shareholding dropped to 18%. Other shareholders are Fidelity Finance Company Ltd (10%) and Chrome Oil Services (13%) with Goldust Investment Ltd no longer a share holder. The remaining 59% are held by other Nigerian corporate and individual investors.
Niger Insurance is one of the major players in the insurance industry. Its key business strategy has been to ride on its strengths as an industry giant, depending largely on its old winning formulas. With the increasing competition in the industry, Niger Insurance needs to take more strategic steps to grow its business. The adoption of the bancassurance strategy will complement its geographical spread to serve the underserved retail segments and thus generate more income. Another key business strategy to pursue vigorously is the diversification of its investments from its core insurance business into other burgeoning sectors to achieve maximum returns to shareholders. This is an area in which the company has excelled in recent times; Investment Income accounted for an average of 40% of PBT in the last five years until 2008 when the investment income dropped to a loss of N66.7m – arguably as a result of the global meltdown. Diversifying into other insurance classes like Infrastructure and Real Estate will significantly improve returns. As we projected in the last report, reduction in patronage by government agencies and parastatals due to NICON’s disinvestment and the bullish penetration of the market by hitherto small insurance companies now recapitalised to fund ambitious expansion plans may be the reasons behind the downturn seen in the company’s financial statements. The industry giant has excelled in Life Insurance which accounts for about 45% of gross premium, Burglary and Accident accounts for about 23%.
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Published: December 1, 2011