Most investors across the world want to go to countries and economies where there is adequate insurance for life and property, especially now that issues of terrorism and kidnapping have grown in larger scale across the globe.
This is why Nigeria, being one of the frontier markets for investment, must take insurance very seriously by ensuring that there are polices and products to carter for terrorism, kidnapping and ransom, while efforts to improve the security situation continues.
“We expect that our efforts to support the local market develop capacity to ensure terrorism risk, kidnapping and ransom begin to yield result,” Femi Oyetunji, managing director, Continental Reinsurance plc, said.
Oyetunji said though the reinsurer, through a partnership with a UK firm, had packaged a programme for local insurance operators, that area of insurance was yet to pick up as expected.
Meanwhile, investors making enquiries on the Nigerian market are worried about the activities of Boko Haram in the Northern parts of the country, which analysts have noted is a huge impediment to the flow of foreign direct investment.
According to statistics recently released by the Central Bank of Nigeria (CBN) Foreign Direct Investment (FDI) inflows dropped by 19.24 percent from $2.13 billion in the fourth quarter (Q4), 2011 to $1.72 billion in Q1, 2012.
The decline in FDI inflows during the review period, the apex bank noted, were caused by growing level of insecurity occasioned by terrorist activities.
According to analysts, political risk insurance against conflict or breach of contract has become a key factor for investors seeking higher returns in developing markets in Africa, Asia and the Middle East.
They stated that the euro zone economic crisis and low returns in other advanced economies are forcing investors to look for more lucrative places to park their money.
Michel Wormser, chief operating officer, World Bank’s Multilateral Investment Guarantee Agency (MIGA), was quoted to have said that “We are meeting investors that are finding their own markets quite constrained and are looking for new places to maintain their business activity at a higher level.”
Political changes in the Middle East, fewer long-running conflicts in Africa and less tolerance for leaders who cling to power, have also added to the interest, Wormser stated.
MIGA’s mission is to promote foreign direct investment into developing countries by offering political risk guarantees to the private sector.
According to him, demand for guarantees has been especially strong for large infrastructure development projects in countries such as Ivory Coast, Senegal, Kenya, Rwanda, Ghana and Pakistan. “We are seeing Africa as a major growth area for investment. Investors going to Africa today are different from the ones that used to go there, more sensitive to risks, and these new investors are much more demanding of the sort of products we are offering,” Wormser said.
This is why Nigeria, being one of the frontier markets for investment, must take insurance very seriously by ensuring that there are polices and products to carter for terrorism, kidnapping and ransom, while efforts to improve the security situation continues.
“We expect that our efforts to support the local market develop capacity to ensure terrorism risk, kidnapping and ransom begin to yield result,” Femi Oyetunji, managing director, Continental Reinsurance plc, said.
Oyetunji said though the reinsurer, through a partnership with a UK firm, had packaged a programme for local insurance operators, that area of insurance was yet to pick up as expected.
Meanwhile, investors making enquiries on the Nigerian market are worried about the activities of Boko Haram in the Northern parts of the country, which analysts have noted is a huge impediment to the flow of foreign direct investment.
According to statistics recently released by the Central Bank of Nigeria (CBN) Foreign Direct Investment (FDI) inflows dropped by 19.24 percent from $2.13 billion in the fourth quarter (Q4), 2011 to $1.72 billion in Q1, 2012.
The decline in FDI inflows during the review period, the apex bank noted, were caused by growing level of insecurity occasioned by terrorist activities.
According to analysts, political risk insurance against conflict or breach of contract has become a key factor for investors seeking higher returns in developing markets in Africa, Asia and the Middle East.
They stated that the euro zone economic crisis and low returns in other advanced economies are forcing investors to look for more lucrative places to park their money.
Michel Wormser, chief operating officer, World Bank’s Multilateral Investment Guarantee Agency (MIGA), was quoted to have said that “We are meeting investors that are finding their own markets quite constrained and are looking for new places to maintain their business activity at a higher level.”
Political changes in the Middle East, fewer long-running conflicts in Africa and less tolerance for leaders who cling to power, have also added to the interest, Wormser stated.
MIGA’s mission is to promote foreign direct investment into developing countries by offering political risk guarantees to the private sector.
According to him, demand for guarantees has been especially strong for large infrastructure development projects in countries such as Ivory Coast, Senegal, Kenya, Rwanda, Ghana and Pakistan. “We are seeing Africa as a major growth area for investment. Investors going to Africa today are different from the ones that used to go there, more sensitive to risks, and these new investors are much more demanding of the sort of products we are offering,” Wormser said.
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