Competition Heats Up In Insurance As Willis, Marsh Make New Nigeria Acquisitions

Real competition for business and leadership is stepping up in the brokerage arm of the Nigerian insurance industry, as top global brokers and reinsurance-brokers position in the local market, with the acquisition of indigenous companies.
Latest entrants in this segment of the business are Willis Towers Watson, which recently concluded the acquisition of Gras Savoye, a leading French insurance broker, which has a subsidiary registered in Nigeria. With the acquisition, Willis, which is the fourth largest brokerage firm in the world, is fully in Nigeria and gunning for big deals.
At the same time, Marsh, a long time partner of Insurance Brokers of Nigeria (IBN) also acquired a big stake in Femi Johnson and Co, a leading brokerage firm in the Nigerian market. This is following the successful acquisition of Alexander Forbes’ South African insurance broking operations, Alexander Forbes Risk Services and related ancillary operations, as well as Alexander Forbes’ insurance broking operations by Marsh in South Africa.
Analysts who reacted to the development at the weekend, described it as healthy for the Nigerian insurance industry and particularly the brokerage, as it underscores the huge potential that has become attractive to insurers across the world.
They said the development would raise the standard of business; service will improve; innovations will come; there will be investment in technology; financial and technical capacity will grow; there will be ethical practice and corporate governance; and most interestingly, shareholders will get good returns on their investment.
An industry source who preferred not to be named, said Gras Savoye may have taken over some big accounts in the market, including Dangote, MTN and Airtel.
“This is not the time business will be based on friendship, or ‘man know man’, but based on quality of service.”
There are currently over 500 insurance brokers registered in Nigeria that contributed N266 billion premium in 2016 or 70 percent of the total industry production of N380 billion.
Kayode Okunoren, president, Nigerian Council of Registered Insurance Brokers(NCRIB) said, “the coming of these investors into our industry is part of what we are clamouring for. Nigeria needs foreign investment.
“Yes, these companies have been doing business in Nigeria under partnerships and all that, but may be they want to make their footing stronger now.
“But the immediate impact of their coming, I cannot say for now, but maybe we will see that over time. Yes, there will be increased competition because they are going to deploy huge resources, but those of us who have been on ground also will need to step up our game.”
Okunoren added, “we have to let our clients know that we are still able to deliver value to them and that they do not need to leave us, which is part of the marketing that everybody will be faced with, both the new and the old.”
He further said, “As I said, we just have to retool and update ourselves from time to time”.
Registered as Willis Group Holdings plc at the New York Stock Exchange, it is the global risk advisory, re/insurance broking, and human capital and benefits firm that helps clients around the world turn risk into a path for growth.
With roots dating to 1828, Willis Towers Watson has 40,000 employees serving more than 140 territories,
according to Willis, uniting both companies would enhance its value proposition as a multinational risk advisory, re/insurance broking, and human capital and benefits firm, with an extensive and largely wholly-owned international footprint.
Together, the two firms combined would have scale, through a presence in 131 countries, of which 84 would be wholly-owned operations, says Paul Platt, communications director, Willis International, in a statement on the acquisition.
Commenting on the acquisition of the interest in Forbes, Jurie Erwee, CEO of Marsh Africa also said: “We are delighted that our African expansion plans are advancing so well. Nigeria is a very important part of our African strategy. Extensive natural resources, a dynamic consumer market and strong economic development, all make Nigeria an ideal market for us to offer the full spectrum of insurance broking and risk advisory services. We look forward to contributing to the country’s continuing growth through the provision of our expertise.”
Brian Blake, vice chairman of Marsh Africa, added: “Our new team in Nigeria is well placed and resourced to support the country’s development, especially in such major economic sectors as agriculture, infrastructure, power and energy. By drawing on Marsh’s global industry and placement skills, they will be able to enhance the service they offer local companies. Their clients will benefit from the broad range of risk management expertise Marsh Africa already provides companies across the sub-Saharan region.”

Source: http://www.businessdayonline.com/competition-heats-insurance-willis-marsh-make-new-nigeria-acquisitions/