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Finaccord’s report titled Bancassurance in Nigeria: Current State and Future Perspectives to 2020, plus the PartnerBASE™ and market data file that accompany it, provides comprehensive and detailed insights into the prospects for bancassurance in Nigeria.

In addition to offering a review of key macro-economic metrics in Nigeria, the research also provides a background to the banking sector through the following information: identification of the ten largest banks by number of retail banking customers; data to illustrate the development of the banking market including number of fully-licensed banks, deposit accounts, branches and ATMs and how each of these have developed since 2005; and review of the value and growth of the consumer mortgage and non-mortgage lending market.

The research then focuses specifically on bancassurance with commentary in several areas: the regulatory environment and general importance of banks as an insurance distribution channel; the insurance product range, operating models and bancassurance partnerships of the ten leading banks; and future outlook for the value of the life and non-life insurance market of Nigeria through to 2020.

Table Of Contents

Bancassurance in Nigeria: Current State and Future Perspectives to 2020
TABLE OF CONTENTS
0.0 EXECUTIVE SUMMARY ... 1
1.0 INTRODUCTION 3
What is this report about? .. 3
The development of the bancassurance channel in Nigeria is the focus of this report ... 3
Rationale . 3
Sub-Saharan Africa hosts a number of fast-growing financial services markets… 3
… with bancassurance poised to grow in several of these .. 4
Methodology ... 4
Macro-economics, banking and insurance sectors .. 4
Survey of banks .. 4
Market data . 5
Definitions ... 5
Investment-related life insurance ... 5
Retirement savings . 6
Risk life insurance ... 6
Accident insurance . 6
Health / hospital cash plans ... 6
Medical expenses insurance .. 7
Personal motor insurance .. 7
Household insurance .. 7
Creditor insurance ... 7
Travel insurance . 7
Agricultural insurance . 8
Commercial insurance 8
Mortgages and consumer finance . 8
Weighted provider share of partnerships .. 8
Operating models ... 9
Abbreviations and exchange rates 9
PartnerBASE .. 9
Finaccord .. 10
2.0 MARKET ANALYSIS ... 11
Macro-economic background .. 11
Gross domestic product and purchasing power parity (PPP) 11
Nigeria's strong economic growth from 2008 to 2014 is likely to continue up to 2020 . 11
… thereby allowing it to overtake South Africa as the continent's largest economy . 11
Total population, age structure and level of urbanisation ... 12
The country's population is likely to increase to more than 200 million by 2020… ... 12
…with the percentage of inhabitants living in urban areas rising to well over 50% ... 12
Political risk 14
Political stability remains a major problem in Nigeria . 14
Other key indicators .. 15
Life expectancy at birth has increased but more slowly than in other countries in sub-Saharan Africa ... 15
Mobile phone subscriptions per 100 inhabitants reached 73.7 in 2013 16
Introduction to the banking sector ... 18
Structure of the banking sector 18
The banking sector crisis in 2008 and 2009 caused widespread consolidation among banks… 18
… which has resulted in a more concentrated but healthier market .. 18
FirstBank Nigeria ranks first in terms of assets, branches and customers… 18
… followed by UBA Nigeria and Access Bank… ... 18
… with Ecobank Nigeria and Stanbic IBTC the largest non-indigenous competitors ... 19
Development of the banking sector . 21
ATMs and bank accounts have both surged in number in recent years… ... 21
… although there is plenty of scope for growth in mobile money transfer services .. 21
Consumer lending . 23
Mortgage balances outstanding declined in real terms between 2009 and 2013… . 23
… which is partly a result of high interest rates and low affordability . 23
Non-mortgage consumer lending balances have grown consistently in recent years .. 24
Introduction to the insurance sector 25
Premiums for life insurance are easily outgrowing those for non-life insurance ... 25
Energy-related insurance accounts for a substantial proportion of Nigeria's non-life insurance market .. 25
The bancassurance market . 29
Regulatory environment ... 29
Regulations coming into force in 2011 modified the approach of banks to the insurance sector… . 29
… although banks can still invest indirectly through a group holding company 29
Importance of bancassurance as a distribution channel 29
Banks' involvement in insurance is mainly focused on credit life and mortgage-related fire insurance ... 29
Product range, operating models and partnerships of the ten leading banks ... 30
Only three banks distribute stand-alone insurance products but bundled cover is commonly marketed 30
A dozen insurance types are available from at least one of the top ten banks in Nigeria. 30
The Nigerian bancassurance market features a wide range of operating models 31
Joint venture underwriter FBN Insurance broadened its product range in early 2014 .. 32
Zenith Insurance is the most prominent captive underwriter in this market .. 32
Wapic benefits from a distribution relationship with Access Bank, its former parent company 32
Future outlook ... 35
The Nigerian insurance market is likely to have more than doubled in value by 2020 . 35
The distribution share of banks is likely to rise from its current fairly low level .. 35

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY ... 1
Bancassurance in Nigeria: key data points... 2
1.0 INTRODUCTION 3
2.0 MARKET ANALYSIS ... 11
GDP in current prices and PPP (purchasing power parity) per capita in Nigeria, 2008 to 2020 (forecast) 12
Total population and level of urbanisation in Nigeria, 2008 to 2020 (forecast) . 13
Population age structure in Nigeria, 2014 ... 13
Key economic indicators for Nigeria, 2008, 2014 and 2020 (forecast) (table) .. 14
Index of political stability, regulatory quality and rule of law in Nigeria, 1996 to 2012 .. 15
Life expectancy at birth in Nigeria, 2005 to 2013 ... 16
Mobile phone subscriptions, fixed broadband subscriptions and fixed phone lines per 100 people in Nigeria, 2005 to 2013 ... 17
Other key indicators for Nigeria, 2005 to 2013 (table) 17
Ultimate holding companies and credit ratings of the ten largest retail banking organisations in Nigeria, 2014 .. 19
Total assets, number of customers and number of branches of the ten largest retail banking organisations in Nigeria, 2014 20
Number of fully-licensed banks and deposit accounts in Nigeria, 2005 to 2013 .. 21
Number of branches and ATMs per 100,000 adults in Nigeria, 2005 to 2013 . 22
Key banking sector indicators for Nigeria, 2005 to 2013 (table) 22
Residential mortgage lending balances outstanding in Nigeria (absolute and per capita), 2009 to 2013 .. 23
Consumer non-mortgage lending balances outstanding in Nigeria (absolute and per capita), 2009 to 2013 ... 24
Key data points for the consumer lending market in Nigeria, 2009 to 2013 (table).. 25
Gross written premiums for life and non-life insurance in Nigeria, 2009 to 2013 . 26
Gross written premiums per capita and as percentage of GDP in Nigeria, 2009 to 2013 ... 27
Gross written premiums for life and non-life insurance in Nigeria, 2009 to 2013 (table) .. 27
(table) 27
Segmentation of non-life insurance gross written premiums in Nigeria, 2013 .. 28
Involvement in bancassurance of the ten largest retail banking organisations in Nigeria: provision of bundled and stand-alone products, 2014 ... 30
Overview of provision rates for different types of insurance offered by the ten largest retail banking organisations in Nigeria, 2014 . 31
Bancassurance in Nigeria: provision rates, weighted operating models and weighted provider share of partnerships, 2014 ... 33
Summary of use of captive and joint venture bancassurance partners by the ten largest retail banking organisations in Nigeria, 2014 . 34
Summary of use of external bancassurance partners by the ten largest retail banking organisations in Nigeria, 2014 34
Forecast for gross written premiums for life and non-life insurance in Nigeria to 2020 35

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