The Nigerian insurance industry is expanding and expects to exceed its projections as consumer confidence grows and operators adopt more technology. Previously, the industry’s growth prospects were hampered by low penetration levels due to a lack of priority and trust in insurance products, particularly life insurance, and a shortage of adequately skilled insurance underwriters.
However, some insurance companies, such as NEM insurance, appear to be ahead of the game, with a 23% increase in net premium in 2021 and a market valuation of 31%.
One of the macro-environmental factors that may have benefitted the company is the government’s implementation of a framework comprising six compulsory insurance policies as well as funding life and non-life insurance companies created to boost the insurance industry and to improve the enforcement of the adoption of insurance.
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Competition
The industry comprises approximately 58 insurance companies (14 life and 43 non-life and 2 reinsurance companies) with agents (individual and corporate bodies), brokers, surveyors, and third-party administrators. However, based on the market share and size, the companies directly competing with NEM insurance in Nigeria are Leadway, AIICO, Coronation Insurance, and AXA Mansard.
About NEM Insurance Plc
NEM Insurance Plc began operations in 1948 as an agency of Edward Turner & Co. In 1965, the company became a Nigerian branch of the London-based NEM General Insurance Association Limited and became incorporated in 1970 before being listed on the Nigerian Stock Exchange in 1989.
The company started by offering life and non-life insurance. After its recapitalization in 2007, it merged with Vigilant Insurance Company Ltd to transact all types of General Insurance.
With the successful registration and launch of its former subsidiary, NEM Insurance (Ghana) Limited, in May 2009, the company expanded its operations into the West African Sub-region.
Due to a recapitalization requirement, the subsidiary merged with Regency Alliance to form Regency NEM Insurance Ghana Ltd in September 2016. NEM Asset Management Limited, a new member, was also added to the brand in March of 2016.
Products
- Motor Insurance (Corporate)
- Marine Insurance
- Aviation Insurance
- Oil And Gas
- Engineering Insurance
- Computer And Electronics Policy
- Fidelity Guarantee
- Group Personal Accident
Personal products include Goods in Transit, Fire and Special Perils Insurance, Travel Insurance, Motor Insurance, Home Protection, Professional Indemnity, Enhanced Motor Third Party
SME products include Burglary Insurance, Product Liability, Fidelity Guarantee, Motor Insurance, Cash in Transit, Group Personal Accident, Agricultural Insurance
Board of Directors
Dr. Fidelis Ayebae– Chairman
Fidelis A. Ayebae is the Chairman of NEM Insurance Plc. Additionally, he serves on the board of the Manufacturers Association’s Pharmaceutical Manufacturers Group. He is a member of the Nigerian Institute of Management, the Institute of Directors, and the Associate of the Chartered Institute of Administration. He has a background in banking and engineering and is a seasoned industrialist and investment specialist.
Mr. Tope Smart– Group Managing Director/CEO
Mr. Smart is an Associate Member of the Chartered Insurance Institute of London and the Chartered Insurance Institute of Nigeria. He is also a Chartered Insurance Practitioner and an honors graduate of the University of Lagos. He also holds an MBA from the University of Nigeria. He serves on the boards of the West African Insurance Companies Association (Ghana), the Nigeria-Britain Association, and the Chartered Insurance Institute of Nigeria.
Other Members of the Board are:
- Andrew Ikekhua
- Sunday Joshua Adebayo
- Momoh Odamah
- Olayinka Aletor
- Ahmed Yakasai
- Chief Ede Dafinone
- Joy Teluwo
- Papa Ndiaye
- Kelechi Okoro
Achievements
- NEM Insurance Plc’s financial strength was upgraded to AA-(NG) in August 2021, based on sustained earnings strength and a stable outlook.
- In August 2022, its shares rose by more than 31%, closing at N5, up from N3.82.
- One of the company’s strengths that may have contributed to its success is the technical competence led by chief executive officer Mr. Tope Smart, whose competence is regarded as the gold standard for measuring ethical conduct in the insurance business in Nigeria.
Regulators
The National Insurance Commission (NAICOM) is Nigeria’s primary insurance regulatory body, overseeing approximately 58 insurance companies (14 life and 43 non-life, and 2 reinsurance companies).
The Nigerian Council of Registered Insurance Brokers Act (NCRIBA) and the National Insurance Commission Act (NAICOMA) are also regulators.
Agents (individual and corporate bodies), brokers, surveyors, and third-party administrators are also part of the industry. However, based on the number of competitors and market size, the companies directly competing with NEM insurance in Nigeria are Leadway, AIICO, Coronation Insurance, and AXA Mansard.
Performance
The share price of N.E.M. Insurance Company (NEM)  as of Thursday, September 29, is NGN 4.91. NEM has traded a total volume of 78.9 million shares—in 1,176 deals—valued at NGN 361 million over the period, with an average of 1.25 million traded shares per session.
The company’s 2021 annual reported Gross premium income is 26,545,254 and a profit before tax of 4,528,198.
Due to huge unpaid claims, the reputation of some insurance firms is therefore threatened with liquidation. This is an opportunity that may leave NEM and other major players in the industry to compete with fewer insurance firms.
With a number of regulatory changes that will further alter how the insurance industry conducts business and interacts with its clients, the industry’s future appears bright.
