Fitch Ratings says in a new report that the Nigerian insurance industry will continue to expand, despite recent economic headwinds and significant structural challenges.

The industry has experienced declining growth rates in recent years, albeit from a high base.

However, a number of leading insurers have maintained strong premium and balance sheet growth over the past three years.

Favourable factors supporting the long term development of the industry include robust demographic fundamentals, investor interest and low insurance penetration.

Fitch expects recent naira weakness to present an opportunity for foreign investors by providing an affordable entry point, while the difficult operating environment may incentivise small under-capitalised insurers to consider a sale.