By David Akinmola
Stakeholders in the insurance sector have urged the federal government to reform policies that would promote increased interest in insurance offerings and transform the public’s view of the sector.
These stakeholders gathered at the Business Journal yearly Lecture 2024, with the theme, Repositioning the Insurance Industry to Drive Sustainable Insurance Growth in Nigeria, in Lagos, were concerned about how the contribution of insurance to the economic growth and the future of the market in the country.
Speaking specifically on the development at the workshop, the Chairman, the Nigerian Insurers Association (NIA), Kunle Ahmed, stated that the insurance business in Nigeria will grow if it has the full backing of the law.
According to him, the narrative of the insurance business in the country will change if insurance is made compulsory to all.
He noted that in most jurisdictions where insurance companies buy banks, if one is required to buy insurance and fails to do so, he or she must be punished.
NIA boss regretted that the Nigerian insurance industry over the years has been battling with the challenge of low patronage.
Kunle, who was the Guest of Honour at the event, lamented that such low patronage has continued to impact negatively on the industry’s growth and consequently contribution to the Gross Domestic Product (GDP).
Addressing policyholders, pensioners, and shareholders’ concerns at the event, Ahmed assured that the National Assembly is going through reforms of various insurance laws.
He assured that there are a couple of things they want to include in the law which will in the end ensure that insurance is compulsory, so that Nigerians will take insurance as part of their lives.
In the same vein, the Group Chairman of NEM Insurance Plc, Tope Smart, who also Chaired the lecture, insisted that a lot needs to be done to reposition the insurance sector in Nigeria.
According to him, Nigeria is far behind other countries in the world in terms of insurance penetration and growth. He highlighted factors inhibiting insurance growth in the country including lack of consumer trust, low awareness, and low income among others.
Speaking on the theme of the lecture (Repositioning the Insurance Industry to Drive Sustainable Insurance Growth in Nigeria), Ms.Adetola Adegbayi, the Founder/Chief Executive Officer, Mutual Specialists, stated that Nigeria must first face the reality of the fact that it is a poor country before it can ever begin to find ways to come out of that poverty.
She also described as incorrect, the tendency to say that Nigeria’s economy ‘defies understanding’ because according to her, “every year, the National Bureau of Statistics (NBS) publishes data of the economy and how we’re doing, whether we’re doing well or not. You find that we’re heavily concentrated on agriculture and trade.”
“An insurance perspective, in terms of sustainable economic growth again just like the GDP, you tend to measure the performance of the insurance industry from insurance penetration. Penetration doesn’t help us to measure how insurance is going to grow. Why? Because penetration is just like GDP, it’s looking at absolute, it’s not looking at relatives. What is the absolute? You take the total sum of premiums that have been collected by the insurance industry to weigh the revenue of the nation called Nigeria and then compare the revenue with each other. And out of the revenue of Nigeria, the insurance industry contributed .43 per cent, the danger is that when you look at it, you will see that Nigeria is not improving in terms of insurance”, she regretted.
Proffering solutions on how to reposition the insurance industry, former Managing Director/CEO, Access Pension Fund Custodian Limited, Lolo Idu Okeahialam, gave testimony on how an insurance firm helped to replace her car after an accident.
She however stated that the insurance sector is underperforming even as she emphasised the need for massive awareness creation on television, radio, newspapers, online, and social media.
The sector, she added, must invest heavily in technology, and improve accessibility and range of innovative products.
“There is a need to leverage innovation and be creative. Do more by focusing on little things for more and above all, invest in cyber securities”, she said.
In her contribution, Dr. Adaobi Nwakuche, Managing Director/CEO, Veritas Kapital Assurance Plc, who highlighted the commendable roles insurance played during the #EndSAS Protest, urged Nigerians to embrace insurance as a risk mitigation mechanism.
She noted that there is no good business in the country that does not depend on the financial services sector.
Nwakuche, who was represented by Godwin Agbonanye, Regional Head for Lagos & South at Veritas Kapital Assurance Plc, noted that given the low penetration level of insurance in the country, practitioners need to collaborate to do more in the area of coming up with customer-oriented products.
She urged insurers to invest their premium to ensure adequate support to policyholders in the event of claims.
Insurers, she said, should also look in the areas of agriculture, tourism, oil and gas amongst others to grow their businesses.
