The nation’s insurance industry players have identified persistent levels of unemployment and poverty as major setbacks to the low insurance penetration in the country.
The industry players who gathered at the 53rd yearly general meeting of the Nigerian Insurers Association (NIA) in Lagos, agreed that until the governments at all levels address the unemployment crisis in the country, the age-long insurance low penetration in Nigeria would never be improved.
A check by Orimix Times at the weekend revealed that the low insurance penetration in the country remains at less than one per cent where over 40 million Small-Scale Enterprises (SMEs) account for about 84 per cent of employment and 50 per cent of Gross Domestic Product GDP), were relying on cash to manage daily risks.
Speaking specifically to the development at the backside of the programme, the Chairman of the NIA, Kunle Ahmed, said the association will continue to collaborate with the National Insurance Commission (NAICOM) and other stakeholders within the financial services sector to promote the business of insurance through the development of innovative products, especially for those financially excluded, and the enforcement of compulsory insurances towards the growth and development of the industry.
A stakeholder who also delivered a paper recently at the Coronation Insurance Plc webinar with the theme: ‘Shared Prosperity through Financial Inclusion – Protecting your business and wallet using insurance’, said, that even large-scale businesses with substantial assets and secure cash flow cannot have cash, sufficient enough to cover their entire risk portfolio.
They also argued that financial recklessness often challenges the ability of Nigeria’s small business sector to drive sustained growth and long-term prosperity.
Also in the same vein, the Managing Director, Coronation Insurance, Olamide Olajolo, said in his paper delivered with the same theme said, in a volatile market where a single event could wipe out a lifetime’s work, insurance played a critical role in both personal and business survival.
“By creating a pool of capital in which the good fortune of the many assured the survival of the few who encountered misfortune, insurance had a critical role to play, primarily by making sure that Nigerians didn’t rely on their savings or assets to cover losses.”
It was incumbent on the industry to change the narrative on insurance, imagining that a N250, 000 cover for example, could secure over N1 billion in risks. What business could set N1 billion aside to cover their risks?
Panellists at the event also observed that the attitude to insurance could be changed in Nigeria by providing practical examples of how simple insurance products could sustain financial inclusion by protecting income and investment.
Panellists were also at pains to demonstrate the value of insurance, especially to businesses. Simple, affordable, products like health and life insurance for business owners, for example, could save a family or a small business owner from being wiped out by the ill health of the breadwinner or single business operator.
