Nigeria’s substantial oil and gas reserves, its young and growing population and its position as Africa’s largest economy continue to point to significant development potential for its insurance sector. However, Nigeria has failed to deliver on that potential historically due in part to the volatility of growth in the country’s real gross domestic product (GDP), coupled with the sporadic enforcement of mandatory retail insurance lines.

In a new Best’s Market Segment Report, “Nigeria’s Insurance Market Offers Significant Potential Despite Headwinds”, AM Best notes that, due to the COVID-19-driven economic slowdown, the insurance market regulator (National Insurance Commission [NAICOM]) has agreed to further delay its revised plans to strengthen market capitalisation and limit the volume of premium flowing out of the country.

NAICOM has now opted for a staggered approach that requires partial recapitalisation by December 2020, with market participants obliged to meet the full requirements by September 2021. AM Best believes that a material proportion of (re)insurers will find it challenging to raise sufficient additional capital to meet the new standards. It estimates that only one fifth of Nigerian (re)insurers at year-end 2018 had sufficient capital and surplus to cover the new requirements. In addition, more than 10 companies will have to double their reported 2018 year-end capital and surplus figures to meet the requirements.

To access a complimentary copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=301771.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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“I think the county government has, really without too many false starts, risen to the occasion and stuck to our principles,” Page said. “And that’s making decisions based on science, following the advice of public health experts delivering our resources based on need — and doing all that with as much transparency as an urgent situation would allow.”

He said the sports protests were “50% parental frustration and 50% partisan politics in an election year, and probably 50% denial.”

Page chalked up the acrimony in local government to the national political climate. On Tuesday, in the third hour of the council’s weekly marathon videoconference, Councilman Mark Harder, R-7th District, asked Page a question while the county executive’s video was turned off. Page didn’t respond, indicating he wasn’t there, which was Harder’s point.

It was an especially cutting maneuver by Harder, one of the ringleaders of dissent against Page. Just last year, Harder and Page had worked together to ask the prosecuting attorney to kick Stenger out of office for skipping meetings. Page has missed only a few of the council’s weekly meetings since that time.

Page said last week that he had turned his attention on Tuesday to the presidential debate, which he called “a reflection of where we are as a country, how partisan we’ve become and how acrimonious we’ve become.… I expect that we’ll be able to get past the partisan political environment that we’re in and govern responsibly over the next few years.”

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Investment Thesis

Headquartered in Kalispell, Montana, Glacier Bancorp, Inc. (GBCI) is a $14 billion regional bank holding company and parent to Glacier Bank. GBCI provides commercial banking services to communities throughout Montana, Idaho, Utah, Washington, Wyoming, Arizona, and Colorado.

About 5 years ago, GBCI’s management team decided to clean out most problem assets (which took about two years to complete) and instituted a more disciplined credit culture which limited concentrations in oversupplied or higher credit risk areas.

Today, the loan book is very granular and GBCI’s markets may actually benefit from people fleeing cities for more space and a cheaper cost of living as remote work becomes more normal. GBCI has a robust loan loss reserve and very high capital levels, allowing them flexibility to weather any challenges that may arise.

With respect to GBCI relative to community bank peers, GBCI’s earnings should prove more stable due to greater net interest margin (NIM) defense, more consistent loan growth, and lower credit losses. Over its storied history, GBCI has been a preferred acquirer with limited competition from other banks across its Mountain West footprint.

On a longer-term investment horizon, I am fairly neutral on the name. GBCI has historically had a well managed expense base, but revenue headwinds are looming and likely to put downward pressure on profitability. While the current valuation is not overly expensive, I would not be surprised to see the shares stay steady near current levels before working higher in lockstep with peer banks.

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Revenue Outlook

While GBCI has historically held pricing power advantages through the Rocky Mountain States, due to limited competition, overall loan growth has usually lagged national peers. Following historical trends, after backing out the $1.4 billion PPP loans, the entire lending portfolio of $11.5 billion decreased $61.6 million from the