(Bloomberg) -- Standard Bank Group, Africa’s biggest lender, is targeting annuity to expand in Nigeria as an imminent retirement boom presents opportunity to increase life insurance penetration in the continent’s most populous nation.

Stanbic IBTC Holdings Plc, the Nigerian subsidiary, started insurance business this year to further diversify from banking and wealth management by selling annuity to retirees of its pension fund, the biggest in the West African nation. 

With just 1% of the population having any form of risk cover, Africa’s largest economy has one of the lowest insurance penetrations. That is about to change as increasing number of people under a contribution pension scheme that started in 2004 are set to retire and will need annuity.

“Within now and the next five years, there will be a lot of retirees within the pension business who will need annuity,” Akinjide Orimolade, chief executive for Stanbic IBTC Insurance said in an interview. 

The local unit of the Johannesburg-based lender holds 1.9 million pension accounts and controls 20.2% of the industry’s 9.3 million individual retirement savings accounts, according to the Nigerian Pension Commission. It managed 2.3 trillion naira ($5.6 billion) or 37.7% of total contributions received in 2019, according to the industry regulator’s latest annual report on its website.

By taking over the annuity of retirees of Stanbic IBTC Pension Managers, premium income of the insurance arm will rise to 30 billion naira by 2026 from 5 billion naira, which will rank it among the top five life underwriters in the nation.

Read: Old Mutual Plans Acquisitions to Expand in West Africa

“We see ourselves controlling 10% of the market,” Orimolade said. “We’ll develop new products that will help us in up-selling and cross-selling to the customers we have within the organization,” he said. 

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