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BY ZAKA KHALIQ, Lagos
More commercial banks are set to float their own insurance subsidiaries in no distant future, especially when the suspended insurance industry recapitalisation exercise resumes.
LEADERSHIP gathered that most of the banks are already looking at opportunities to diversify their income and have identified the insurance sector as an opportunity to do that.
Some banks have already submitted applications to regulatory bodies to operate a Holding structure (HoldCo) that would give them leverage to float insurance subsidiaries.
Already, Guaranty Trust Bank (GTBank), Access Bank, Ecobank, First Bank, among others, already have a bancassurance relationship and stake in some underwriting firms, while Unity Bank, Zenith Bank, Enterprise Bank and Stanbic IBTC Bank now have fully owned insurance subsidiaries.
Until recently, First Bank too had a major stake in FBNInsurance before it divested from it.
More banks, according to LEADERSHIP investigations, are looking at having their respective subsidiaries when recapitalisation exercise resumes and as soon as they are able to get approval to operate a HoldCo structure.
Earlier, Access Bank group had stated that it was considering having an insurance brokerage subsidiary soon in a bid to leverage on the insurance market opportunity of $150bn in countries with Access Bank presence.
The move, it said, is based on the projection that insurance penetration would witness a rapid increase in most countries in the next five years, especially in Africa where the bank already has its presence.
Having secured the permission of its shareholders and relevant stakeholders to operate a Holding Company (HoldCo) structure, the bank is, however, planning to be the hub of all financial services not only in Nigeria but Africa and the global stage.
Speaking on the development recently, the group managing director of the bank, Mr Herbert Wigwe, said the proposed insurance brokerage would adopt a dynamic and creative approach to provide a value- added insurance broking services focused on meeting customers’ insurance protection needs.
He said, “There is a market opportunity of $150bn in countries with Access presence assuming insurance penetration in these countries (4.4 per cent) grows to South African penetration (13.1 per cent). Access Insurance Brokerage would adopt a dynamic and creative approach to provide value-added insurance broking services focused on…
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