Despite consistently robust headline growth in insurance premiums in Nigeria, the recent performance and immediate outlook is not encouraging, when considered in real terms. Inflation will more than offset nominal premium growth in local currency terms until at least 2018, according to our forecasts. Beyond the next year or two, the prognosis brightens, with the prospect of a return to positive premium growth in both USD and real terms.
Key Updates And Forecasts
In 2016, life premium growth in local currency terms was 12.9%, while we forecast 15.0% in 2017. However, with inflation of 15.6% and 16.1% respectively, this translates into real growth of -2.7% and -1.1%. Positive real growth in premiums should return in 2018, when we foresee a rise in nominal terms of 13.6%, which is higher than our Country Risk team's inflation forecast of 11.8%.