Continental Reinsurance Plc plans to acquire rivals across Africa over the next three years as the Nigerian firm seeks to expand on the continent, said Chief Executive Officer Femi Oyetunji.
In each of the company’s five African regions, “one subsidiary has been given the responsibility to look for acquisitions,” Oyetunji said in an April 28 interview at the company’s headquarters in Lagos, the Nigerian commercial capital. “A few names have come up in each region and we’re assessing them strategically at the board level.”
Premium income for the insurance and reinsurance industry is improving in Nigeria, Africa’s largest economy and oil producer, as regulators enforce rules requiring companies with at least five workers to provide life coverage. The National Insurance Commission is also making property insurance mandatory in the nation of more than 170 million people.
Continental Reinsurance plans to “raise significant capital” this year through equity sales to enable it to “take advantage of opportunities that abound in Nigeria and Africa,” Oyetunji said.
The fundraising, initially planned for last year, was delayed after Emerging Capital Partners LLC, a Washington-based buyout firm, announced plans to sell its majority stake. The investor “is very close to concluding the exercise and will announce the preferred bidder for its 54 percent stake soon,” Oyetunji said.
The March presidential election has bolstered investor confidence in Nigeria, he said. “With the peaceful conclusion of elections, business optimism has grown and people are going to be investing.”
President Goodluck Jonathan conceded defeat to former military ruler Muhammadu Buhari after last month’s vote. The peaceful succession soothed investor fears in a country with a history of election-related violence.
The reinsurance company, which announced plans this month to open a construction property and engineering risk services unit in South Africa, intends to boost specialist skills in other areas, including actuaries and information technology, to advise and support underwriters, Oyetunji said.
The company’s shares rose 5.6 percent to 0.94 naira by the close in Lagos on Thursday, the biggest advance in two months. That pared its declined this year to 7.8 percent compared with a 0.2 percent gain by the 181-member Nigerian Stock Exchange All Share Index.