Old Mutual Group Ltd. plans to make at least two acquisitions within the next five years to boost its market share in the West Africa region, where insurance penetration still has significant headroom for growth.

The Group is targeting companies in insurance and complementary business for a takeover in Nigeria. Meanwhile, in Ghana it is looking at acquiring a pension company.

Samuel Ogbu, Chief Executive Officer (CEO) for Old Mutual West Africa, indicated that Old Mutual intends to use the two West African giants as a stepping stone to penetrate the West African region. He expressed his excitement over the progress Nigeria regulators have made so far.

“In Nigeria, I am encouraged by what the regulator is doing. Our aim is to strengthen our position in Nigeria and Ghana to really grow and use those as a basis to penetrate the rest of West Africa over time.”
Samuel Ogbu

According to the head of Old Mutual’s West African operations, the market size is a key consideration for customers choosing insurers in the region.

“This is a market where if you are outside the leading companies, then you really struggle to get attention — not only from the corporate sector but also from the retail sector.”
Samuel Ogbu

In Nigeria, where its operations rank 15th in premium income, the insurer wants to become among the five biggest. With the planned acquisitions, it also wants to crack the top three in Ghana, where it’s now the fifth largest.

Mr Ogbu revealed that, Old Mutual Insurance has contacted quite a lot of parties, but has settled on Nigeria and Ghana.

“We have held talks with several parties and we are likely to make at least two acquisitions.”
Samuel Ogbu

The CEO further averred that the acquisitions will enable Old Mutual to boost its underwriting business in the two West African countries as well as migrate to other financial services in the region.

Interestingly, Nigeria, Africa’s largest economy, has one of the lowest insurance penetrations globally with just 1% of the population having any form of risk cover.

To this end, the Nigerian Insurance Association, as an industry body, is partnering with regulators to enforce compulsory covers for construction work, car accidents and group insurance for workers, to boost insurance usage. Insurers are also being compelled to boost their capital to enable them to compete better.

According to the Ogbu, after the expansion, the West African units of Old Mutual aim to contribute 25% of the group’s return from operations generated outside of South Africa and China by 2030. Old Mutual plans to hire workers, deploy technology and take advantage of bancassurance to increase the number of retail customers.

The insurer, which also hinted about meeting the industry recapitalisation requirements set by the National Insurance Commission (NAICOM), the Nigerian insurance regulatory body, stressed on its plans to drive insurance penetration in the country on the back of digital and technology innovations.

Established in 1845, Johannesburg-based Old Mutual offers general financial services — including underwriting, savings, insurance, banking group, pensions and asset management — in about 17 countries, mainly in Africa and China.