Country Profile Nigeria - www.lloyds.com/NigeriaMI May 2014
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Country Profile Nigeria www.lloyds.com/NigeriaMI May 2014 filip.wuebbeler@lloyds.com
KEY FACTS
FULL NAME / CAPITAL CITY: Nigeria / Abuja GDP (PPP): US$ 509bn (Global Rank #31)
LANGUAGE: English (official), Hausa, Yoruba, Igbo (Ibo), POPULATION: 177m (Global Rank #15)
Fulani, over 500 additional indigenous languages
IMF CATEGORISATION: “Emerging / Developing”
MAIN EXPORT PARTNERS: US 17%, India 12%, Brazil 8% (2012)
MAIN IMPORT PARTNERS: China 18%, US 10%, India 5% (2012)
MAIN EXPORTS: Petroleum and petroleum products, cocoa, rubber
MAIN IMPORTS: Machinery, chemicals, transport equipment
2012 Rank 2013 Rank Change in Rank
EASE OF DOING BUSINESS: 133 131 2
COMPETITIVENESS: 127 115 12
FREEDOM FROM CORRUPTION: 136 142 -6
DISASTER YEAR ECONOMIC COST (US$ x 1000)
Drought 1983 71,103
Flood 1994 66,500
Flood 2010 30,000
Flood 1985 8,000
Flood 2000 4,805
Source: Disaster Statistics based on: Prevention Web (2013); Export Statistics based on CIA World Factbook (2013); Doing Business Indicators based on Doing Business (2013), World
Economic Forum (2013), Index of Economic Freedom (2013; Key Stats based on CIA World Factbook (2013), IMF (2014)
© Lloyd’s 2KEY STATISTICS
GOVERNANCE INDICATORS SIZE OF ECONOMY WEALTH PER CAPITA
Percentile Rank (1-100) 2012 Purchasing Power Parity (PPP) basis Purchasing Power Parity (PPP) basis
NG EG KE in International $ bn in International $
737
Nigeria Egypt Kenya 9,000
2012 800
8,000
700
Government Effectiveness 16 25 35 7,000
600
444
Political Stability and Absence of 6,000
3,801
3 8 10 500
Violence/Terrorism 5,000
2,697
400
268
4,000
1,913
Control of Corruption 11 34 12
300 3,000
Regulatory Quality 25 33 42 200 2,000
100 1,000
Rule of Law 10 40 22 0 0
2006 2012 2018f 2006 2012 2018f
Voice and Accountability 27 27 39
NG EG KE NG EG KE
TOTAL NON-LIFE DIRECT INSURANCE MARKET* NON-LIFE DIRECT INSURANCE MARKET LLOYD’S GROSS SIGNED PREMIUMS
Premiums in US$ m Premiums in US$ m; by OECD Class Gross Signed Premiums in US$ m; by country of origin
120
103
1,400
Motor 144
1,200 100
197
PA & Health
76
1,000
71
80
635
800 Property 160
Nigeria 60
2011
485
600
371
Liability US$ 371m 1,125 40
400
291
MAT 20
200
6
0 Miscellaneous 0
2011 2012 2013 2011 2012 2013
NG EG KE NG EG KE
All data, sources & data limitations are available for download at www.lloyds.com/comparecountries; * 2012/2013 total non-life based on CAGR projection
LLOYD’S TRADING POSITION Insurance: No (some exceptions apply, see Crystal for details)
Nigeria Reinsurance: Yes (subject to strict restrictions)
www.lloyds.com/crystal Coverholders: No
© Lloyd’s 3BUSINESS ENVIRONMENT
Defections and internal divisions threaten to cost ruling party election. The switch of five governors from the ruling People's Democratic Party (PDP) to the main
opposition All Progressives Congress in November 2013 was followed a month later by the defection of 37 lawmakers from the lower house, thus removing the PDP
majority. The High Court ruled on 31 March 2014 that the parliamentary defectors must vacate their seats, but the issue of President Goodluck Jonathan's candidacy
for the general election in February 2015 will continue to divide opinion within his party and threaten a PDP victory. A change of government would mean contract
renegotiation and regulatory reviews in the key sectors of power, oil and gas, and federal procurement.
IED attack in Abuja underlines Islamists' ongoing ability to cause mass casualties. Around 75 people died after a bomb planted on a vehicle was remotely
detonated at a bus park in the federal capital, Abuja, on 14 April 2014. The intent to cause mass casualties suggests perpetration by Nigeria's Islamist militia, probably
Boko Haram. In March, the group killed at least 50 people at a market near Maiduguri Airport using two vehicle-borne IEDs. Operations by the Joint Task Force against
Boko Haram in the northeast have failed to prevent the group from carrying out such attacks, as well as civilian massacres and assaults on military targets.
Slow progress on Petroleum Industry Bill (PIB) likely to delay investment. The long-awaited PIB aims to bring greater efficiency to Nigeria's oil sector, balancing
the country's need to profit from its resources with fostering competition and investment. The current formulation of the PIB has passed a second reading in the Senate
committee, but has again been put out to stakeholder consultation, pushing its implementation date beyond the 2015 election. Governors in northern states have
complained that the proposed increase in revenue allocation to oil-producing states will widen the wealth gap between north and south.
GDP rebasing gives Nigeria prestige of becoming Africa's largest economy. In April 2014, Nigeria's official statistics agency released rebased GDP data – the first
such revision since 1990 – providing a more accurate assessment of the economy. The broad revision puts Nigeria ahead of South Africa with a GDP measure for
2013 of USD 509 billion, 89% higher than the corresponding figure from the now outdated series. The rebasing is likely to assist Nigeria in bond issues planned for
later in 2014.
GROSS DOMESTIC PRODUCT (GDP) TOP-10 SECTORS (BY VALUE ADDED) BUSINESS ENVIRONMENT INFORMATION
(nominal GDP levels in billion US$; Real GDP change) (value added in billion US$ & 2014 Change in real %) (provided by IHS Global Insight, May 2014)
700 9%
2012 2013
8.0% 8% TOP SECTORS Value Percentage
600 Added Change
7.0% 7.1% 6.9% 7%
6.8% 6.7% 6.7% 6.6% 1. Agriculture 98.1 6.6
500 6.4%
6% 2. Oil and Gas Mining 75.6 -0.9
400 3. Retail Trade - Total 23.1 7.6
5%
4. Wholesale Trade 19.5 9.4
300 4% 5. Land Transport 9.1 5.1
3% 6. Communications 6.3 14.1
200 7. Real Estate 5.7 9.9
2%
8. Business Services 4.1 6.5
100
1% 9. Construction 4.0 11.5
10. Banking and Related Financial 3.2 6.3
0 0% For daily updates visit: > www.ihsglobalinsight.com
2009 2010 2011 2012 2013 2014 2015 2016 2017 Top-10 Total 248.7
© Lloyd’s 4INSURANCE ENVIRONMENT
Major Direct Insurers: 2008 Top-10 Market Players 2012 DIRECT PREMIUMS QUICK LINKS / USEFUL SOURCES
(Gross Written Premiums in US$ m) (Net Earned Premiums in % of total)
Insurance Market Profiles
Motor 144 > www.iii.org/international/profiles
0 40 80 120 160
Leadway PA & Health
197
Nigerian Insurance Association
> www.naicom.gov.ng
Industrial and
General
Property 160 Nigeria Lloyd’s Agency Network
WAPIC
2011 > www.lloyds.com/agency
STACO Liability US$ 371m 1,125
Lloyd’s Claims Team
Zenith General 291 > www.lloyds.com/claims
Custodian and
MAT
Allied 6
NEM Miscellaneous
AIICO
Sovereign Trust
BUSINESS CULTURE GUIDE
Law Union and Rock
> http://www.kwintessential.co.uk
Source: Insurance Information Institute > www.iii.org Source: Regulator: > www.naicom.gov.ng/ (View Resources > Culture Guide)
Nigeria’s non-life insurance sector: Compulsory insurance polices have been introduced in some classes of the non-life insurance segment, fuelling premium
growth, while the segment’s penetration grows slowly. An on going challenge for the non-life insurance community is the intense competition between players and the
evolving regulatory regime.
Market Players: The number of insurance companies in Nigeria dropped from 103 to 49 after several mergers and acquisitions. The announcement of new capital
requirements for companies operating the sector in 2005 drove the recapitalization efforts. Improvements were seen in the Nigerian insurance sector, through an
increase in the volume of activities, better public awareness, business expansion, an environment for players to penetrate domestic markets and expand into regional
markets, and stricter supervisory regulation and control.
Outlook: The Nigerian insurance market is being driven by mandatory third-party motor insurance, and this growth momentum is expected to steadily increase as
compliance for compulsory motor insurance level grows. The enforcement of compulsory insurance policy by NAICOM will also serve as a near term growth catalyst.
Nigeria’s rapidly improving financial sector and growing wealth for the population is linked to expectations of insurance premium growth in the long term.
Source: Afrinvest: Nigerian Insurance Sector Report, September 2011
© Lloyd’s 5LLOYD’S BUSINESS
2009-2013 LLOYD’S TOTAL PREMIUMS 2013 LLOYD’S HIGH LEVEL CLASSES
Gross Signed Premiums; Direct versus Reinsurance; in million US$ Gross Signed Premiums; high level classes; in million US$
120 2013 GROSS SIGNED PREMIUMS*
UK Motor 0.0
100 Total US$ 71m Overseas Motor 0.0
80 Property Treaty 3.8
Reinsurance US$ 66m
Direct US$ 5m Property (D&F) 3.4
60
96
Marine 12.8
82
40 69 *COUNTRY OF ORIGIN PREMIUMS
66 Energy 36.2
61
Policyholders are based or
20 headquartered in this territory; Casualty 1.0
6 5 7 7 5 Premiums may be written outside Casualty Treaty 0.1
0
2009 2010 2011 2012 2013 this territory;
Aviation 11.1
Direct Reinsurance X Not necessarily where risks are located Accident & Health 2.8
X May differ to what is reported to
local regulator (dependent on local requirements). 0 10 20 30 40
SOURCE: Market Intelligence based on *Gross Signed premiums; Xchanging (2014); unaudited figures based on country of origin and processing by calendar year; see Appendix for details
Mr Amit 3Khilosia
A Type office is defined as a Lloyd's office headed by a
Lloyd's South Africa (Pty) Ltd
Lloyd’s Country Manager who in addition
7th Floor , The Forum
to meeting regulatory
Office requirements in that2196
territory also proactively supports the
Type
Please contact Lloyd’s South Africa. General 2 Maude Street, Sandton
Representative business
South Africa development objectives of the managing agents
in that territory.
TELEPHONE: +27 11 884 0486
EMAIL: amit.khilosia@lloyds.com
© Lloyd’s 6APPENDIX
MACRO-ECONOMIC & BUSINESS ENVIRONMENT DATA
Source: IMF (www.imf.org/external/data.htm), World Bank (http://data.worldbank.org/), IHS Global Insight.
Notes: GDP data on size and wealth of the economy is reported in Purchasing Power Parity (PPP) terms; this is the most accurate indicator of the true standard of living in
each country and therefore potential demand. To calculate this, GDP is converted from local currency to an international $ currency using PPP exchange rates rather than the
market exchange rate. The PPP local currency-to-international $ exchange rates are determined such that a standard basket of goods has the same price in international $
terms in each country. This adjusts for the differing costs of goods across countries, when converted at market exchange rates.
INSURANCE MARKET DATA
Source: Reported data derived by Lloyd’s Market Intelligence team; original source is regulatory bodies, associations, third party information providers.
Notes: Data is reported in US$. For more information, see www.lloyds.com/comparecountries.
Exchange Rates Note: Where required, data has been converted to US$ using annual average exchange rates as per www.oanda.com.
LLOYD’S PREMIUM DATA
Source: Reported data derived by Lloyd’s; original source is Xchanging (data therefore contains only premiums processed by Xchanging).
Notes: Data is reported is US$, on a calendar year basis and is signed gross premiums. This differs from the data published in the Lloyd’s Annual Report, which is also on a
calendar year basis, but is written gross premiums and sourced directly from Syndicates. Differences are therefore (1) timing inconsistencies between signed and written gross
premiums; (2) inconsistent use of exchange rates by Syndicates and Xchanging; & (3) incompleteness of Xchanging data set for certain classes of business (a substantial
amount of premium is not processed by Xchanging and missing from the REG 258 data set; this comprises, for example, UK Motor).
Exchange Rates Note: Data has been converted to US$ using monthly exchange rates provided by Xchanging.
Definitions:
Gross Signed Premiums: Original and additional inward premiums, plus any amount in respect of administration fees or policy expenses remitted with a premium but
before the deduction of outward reinsurance premiums.
Calendar Year: Relates to the calendar year in which the premium, additional or return, is processed by Xchanging. This is irrespective of the actual underwriting year of
account, which is determined by the inception date of each risk.
Country of Origin: Denotes the domicile of the insured party (i.e. the coverholder or policyholder). This is the country from which demand for the insurance / reinsurance
emanates, & is irrespective of the country to which the risk is classified for regulatory reporting purposes.
Example: A policy holder in the UK insuring a holiday home in France would be classified as a UK risk by “Country Of Origin”, but “French” for regulatory reporting
purposes. Similarly a risk incepting on 1st December 2007 would be classified at 2007 “Underwriting Year of Account” but may not be processed by Xchanging until 2008
and so be allocated to the 2008 “processing year”.
ACCESSING THE DATA: to access the raw data in this document, and equivalent data for other countries, see www.lloyds.com/comparecountries.
DISCLAIMER: This document is intended for general information purposes only. Whilst all care has been taken to ensure the accuracy of the information, Lloyd's does not
accept any responsibility for any errors or omissions. Lloyd's does not accept any responsibility or liability for any loss to any person acting or refraining from action as a
result of, but not limited to, any statement, fact, figure, expression of opinion or belief contained in this document.
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