5 insurance firms in merger, acquisition talks in Nigeria

In line with the policy of the Federal Ministry of Finance to have mega insurance institutions in Nigeria, five big firms have gotten the nods of their boards to go into talks that may lead to either acquisition or merger.

The companies include IGI, AIICO, Lead Insurance, Royal Exchange and Branco Insurance.

In February 2017 the management of National Insurance Commission (NAICOM) extended the 18-month consolidation period, from March to the end of June 2017.

It stated that insurance firms in Nigeria will only remain in business with a minimum capital base of N3 billion, up from the N2 billion now in force.

Mega insurance firms are expected to be four at the end of the period with capital base of N10 billion each.

But an aide to the Commissioner for Insurance, Mohammed Kari, speaking on condition of anonymity confirmed that a number of applications for merger talks and acquisition had been flooding the Commission’s office in the past two month in 2017.

“Indications are that before the end of the year (2017) at least, three mega insurance firms would emerge through the various talks, while the rest will have to meet the new capital base or be eased out of the system,” he told Ripples Nigeria.

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An Executive Director with Royal Assurance, Mr. Akin Okalanwa, said his outfit is having talks with as many firms as are interested in relating with the company.

“We are not in want of companies that have been approaching us for various business relationships, which we are studying very closely, Okalanwa said.

Officials of the various companies in the merger deal maintained sealed lips over the level of discussion.

One official with IGI said there is nohing any management team of any of the firms could do without the approval of their respective board.

Under the past administration of Goodluck Jonathan, life insurance companies were to recapitalise from N150 million to N2 billion, while the composite insurance firms were required to jack up their minimum capital base from N350 million to N5 billion.

 

 

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