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Foreign insurers invade Nigeria through banks

 Patience Saghana
Foreign insurance  companies are sneakingg into the country using Nigerian banks  to sell their products in the country.
A South African based insurer, Sanlam Ltd  recently teamed up with First Bank of Nigeria Plc to sell its insurance products in Nigeria.

Mr Johan van Zyl, Sanlam Managing Director said in an interview that “About 60 per cent of all our potential clients in Nigeria bank with First Bank.. We can get the money in from those clients fairly easily and quickly.”

Sanlam, with operations in 12 African countries and a business in India, is chasing growth after doubling its profit last year even as other insurers reported losses in the wake of the global financial crisis. First Bank is Nigeria’s largest bank by number of customers.

“We have 35 per cent of the arrangement and it’s a simple model where we would roll out 30 to 50 branches this year,” Van Zyl said. With First Bank having more than 400 branches, the CEO said the first year of partnership is akin to “opening a tap and feeling the water. If it works we can do a hell of a lot in the next 18 months to two years.”

Sanlam said  that  it will spend as much as 1.5 billion rand ($197 million) expanding its business in Africa and India and may look for a European insurance partner.

More so, FBN Insurance Brokers, First Banks owned company had also sealed a strategic alliance with Energy Division of HSBC Insurance Brokers. The deal flows from the partnership between HSBC and First Bank in the management of a portion of the country’s foreign reserves.

The agreement involves technology transfers from HSBC to FBN Insurance Brokers while HSBC will leverage the local brokerage company’s clientele base to deliver its risk-specific solutions. Key areas of the alliance include training of the local brokerage firm’s employees at the London office of HSBC.

In an exclusive interview with Vanguard in Lagos, two top executives of the UK-based company, Frank King and Mark Steeves described the partnership as a wonderful opportunity to collaborate with a member of one Nigeria’s largest banks pledging that it would be a mutually rewarding deal.

They said Nigeria’s market offers huge potentials for international players particularly after the reforms in the financial market which cannot be ignored by HSBC. The two directors hinted that all areas of partnership will be explored which will be rewarding for both parties.

The alliance, they said will not be exclusive to the energy business of FBN Insurance but will continue to unfold as more areas are opened to other divisions of HSBC Insurance Brokers in the operations of its Nigerian counterpart.

Steeves said the alliance will help raise the available skill in energy insurance saying that HSBC will transfer skills and training that can be domiciled in the country for the growth of energy insurance in Nigeria.


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.