For underwriting firms in the nation’s insurance industry to retain 70 per cent of risks locally, there is a need for the sector to increase the profitability of the insurance business.
This was the suggestion of Dr. Biodun Adedipe, in a paper delivered at a media parley jointly sponsored by Boff & Co Insurance Brokers Limited and B. Adedipe Associates Limited.
In the paper, ‘2021 Review and 2022 Economic Outlook,’ Adedipe, the chief consultant of B. Adedipe Associates Limited, commended the insurance industry particularly for surviving the COVID-19 pandemic but felt there are areas of improvement for the regulators, operators and other stakeholders.
According to him, Nigeria still experiences low insurance penetration.
“If the government and its agencies are responsible, put more firmness into enforcement, then, the industry will contribute its quota maximally to the economic value chain. Of course, when the insurance sector is vibrant, it enables businesses and entrepreneurs to take risks, which is part of the economic growth,” he noted.
The challenges of insurance in Africa, according to him, include a lack of trust. He said the industry has much room for fraud and a lack of appropriate information from policyholders.
On low insurance acceptance in Nigeria, the economist said, there was a need for operators to provide adequate information to the insurance consumers both locally and internationally.
“If someone uses religion as an excuse, can we direct them to takaful? People need to see that insurance is fundamental for growth. Globally, insurance is becoming more crucial and Nigeria cannot be left out,” Adedipe noted.
The Chairman/Chief Executive Officer, Boff & Co Insurance Brokers Limited, Babajide Olatunde-Agbeja, challenged operators to increase financial capacity, regular staff training, investment in information and technology and consistent engagement.