By Nnamdi Odumody

According to a 2018 survey by the Chartered Insurance Institute of Nigeria, 86.6 million people out of Nigeria’s adult population of about 100 million are excluded from any form of insurance cover.

The penetration ratio of the Nigerian insurance industry is at 0.5 percent in 2018. That is among the least in Africa compared with South Africa’s 17 percent, Kenya’s 2.8 percent and Ghana’s 1.1 percent.

The National Insurance Commission which is the apex regulator for the insurance industry has a target for Nigeria to become one of the world’s top twenty insurance markets by 2020. In 2018, the industry generated a Gross Premium Income of 448.6 billion naira which is expected to record 10 percent growth to about 493.4 billion according to Augusto and Co’s data.

Currently, there are over 12 million registered vehicles for motor insurance, fire insurance for households and manufacturing companies, annuities for retirees and life assurance policies for individuals while opportunities abound in ‘’Takaful’’ i.e. insurance for Muslims and other large scale economic projects across the nation.

Lack of trust, awareness, affordability of insurance products and services, easy access to insurance products, dishonesty amongst insurance practitioners, late payment of claims, refusal to settle genuine claims, ambiguous description of product details, cultural and religious beliefs, low level of innovation in product development, limited take off of takaful, microinsurance and bancassurance. More so, weak distribution channels, financial incapacity, high incidence of insurance fraud, low level of disclosure, prevalent unethical practices and inadequate industry database are some of the reasons why Nigerians don’t purchase insurance products as well as the underperformance of the sector.

The Nigerian Insurance Industry includes the following sub-sectors: Composite, Non-life, Life and Reinsurance operators. Over the last five years, the Nigerian Insurance Industry has grown at a compound annual growth rate (CAGR) of 11%, buoyed by increased capitalization as well as the introduction of policies aimed at promoting the local market.

Nonetheless, the industry remains challenged with low apathy from the Nigerian populace and weak policy enforcement practices, resulting in a low penetration ratio. These challenges however present enormous opportunities when benchmarked with other African countries especially South Africa. The industry has room to grow, if it can innovate

Coverdor which is Nigeria’s first digital insurance platform wants to make tech-savvy Nigerians access insurance anywhere and anytime from their mobile devices, and also manage all aspects of insurance transactions in real time.

Its users can easily insure their electronic gadgets and home appliances individually against mechanical, accidental and liquid damages directly from Coverdor’s platform or through online and offline point of sale or partner’s e-commerce website or retail outlet in Nigeria.

Using proprietary artificial intelligence technology, it completes a policy sales transaction and policy holder onboarding within 3 minutes and also processes customer claims in less than 3 minutes.

Coverdor needs to fix the friction and provide the last mile access to insurance services for millions of Nigerians without insurance cover. That is how the insurance sector will show a sustained promise.

The Nigerian Insurance Blurry Internet Vision

My message to startups in our portfolio: “Competition will not destroy you in Nigeria, but failure to execute will. Do not spend too much effort on what competitors are doing or will do, I want to see what you are doing and will do”.

Failing as a Nigerian startup is not because any competitor took you down. The likely major reason is that you could not execute to fix that friction you have established that company to solve. For the solar companies that went under, they did not die because of DISCOs, since the DISCOs are still not distributing enough electricity.

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NB: Startup in this content means going to create something of value with transformational impacts in the market. It is different from small business which could be “barbing salon” [Nigerian slang for barbershop], selling corn along the roads, etc that rarely scales. While a barbing salon [small business] could have competitors on a street, a barbing entrepreneur who runs many salons across Nigeria, will not collapse because of many salons, at the moment. Rather, the entrepreneur will likely go down because of poor execution. Nigeria has not attained parity on the number of barbing salons it needs at the moment; we have more rooms to grow nationwide, but that has to be done optimally and profitably. The competitive elements remain low.

Founders, Competition is Not Your Problem; Execution Is.

The greatest moment of self-discovery is when you come to terms on how unique you are. That uniqueness makes you amazing – that you have got great talents and special gifts. If you spend more time examining how far you have gone, over just focusing on others (friends, colleagues, etc), and then piece together what took you to those heights, improving on the wins, the future will bring better paths.

Awareness and observation are antennas into the minds of customers, sharper than any MBA. Some entrepreneurs have used both to make out of chewing stick an organic toothbrush.

To be a successful businessperson, you do not need to be as mathematical as Chike Obi or grammatical as Wole Soyinka. All you need is awareness and observation on market frictions, finding solutions to them, and rapping up in a matching story. If you can get those three in sync, you will experience glory.

Like I tell startups in our portfolio – “competition will not destroy you in Nigeria, but failure to execute will. Do not spend too much effort on what competitors are doing or will do, I want to see what you are doing and will do”. As the African proverb would say it takes killing just one tiger to be called the “the killer of tigers”, you have wins already, and I can assure you that you are already a winner.

Keep wins going! Have a great weekend.

Does it mean that MTN Nigeria which was listed in the Nigerian Stock Exchange at close to $6 billion is bigger than Airtel Africa? Briefcase Africa reports that “Airtel Africa wants to sell 25% of its stock to new investors, raising almost £1 billion in the process, mostly to pay down debt”, implying the company is worth around $5 billion. Today, the market cap of MTN Nigeria is N2.77 trillion (about $9 billion if you use CBN exchange rate or $7.7 billion with black market rate). For Airtel Africa to be asking for $5 billion when MTN Nigeria is worth $9 billion seems strange.

Airtel Africa, a subsidiary of Indian telecoms group Bharti Airtel Ltd. isreportedly planning a listingon the London Stock Exchange. It plans to sell 25% of its stock to new investors in a bid to raise US$1 billion in the process, mostly to pay down debt. Cash injection from existing investors has already helped to reduce Airtel Africa’s net debt to $4 billion in March, compared to $7.7 billion in the previous year. JPMorgan, Bank of America, Citi, Barclays, and Goldman Sachs are among nine banks AIrrtel has selected to assist with the listing which may happen as soon as next month. The company, operating in 14 African countries, also plans to list on the Nigerian Stock Exchange (TC Daily)

MTN Nigeria IPO Market Cap: My June 2018 Model Was Close – $5.57B vs. $5.8B