By David Akinmola
Stakeholders in the nation’s insurance industry have said that for the sector to prevail over various economic challenges in 2025, there is a need for major reform to increase its contribution to the country’s gross domestic product.
The industry players who gathered at the 2024 edition of the Business Journal Lecture with the theme: “Repositioning the Insurance Industry to Drive Sustainable Economic Growth in Nigeria,” in Lagos, also urged underwriting firms to reposition the sector as a key driver of sustainable economic growth in the country.
Speaking at the forum, the Managing Director/Chief Executive Officer, Stanbic IBTC Insurance, Akinjide Orimolade, in his Keynote Address on the theme of the event stressed the role of insurance in driving economic sustainability including improving risk management, capital mobilisation, financial stability, employment generation, consumer protection, promotion of trade, and social stability.
Orimolade, represented by Mrs. Temitayo Sogbola, Managing Director/Chief Executive Officer, RiskTech and Advisory, urged players to put their hands together to move the sector to a greater height.
She said sustainable economic growth in the country is essential to address current challenges.
This can only be achievable through innovative solutions, regulatory reforms, and collaborative partnerships, by focusing on increased awareness, product innovation/ diversification, and technology.
According to her, the insurance sector can become a powerful tool for financial inclusion, economic stability, and long-term sustainable economic growth. With the right policies and industry practices, insurance can play a vital role in Nigeria’s journey towards becoming a more resilient, inclusive, and prosperous economy,” the Keynote Speaker said.
Sogbola, therefore, highlighted three pathways through which the sector can contribute to sustainable economic development, such as households, the private sector, and the public sector.
“Households: Savings/Investments, Lower Out-of-pocket expenses for healthcare, Healthcare, and Paying off a borrower’s outstanding debt.
“The Private Sector: Access to Credit, Agriculture Development, and Innovation. “Public Sector: Gross Domestic Product (GDP)/Economic growth, Job creation/employment, reduction of financial loss, Savings, Allocation, Assets and Liabilities Management, Fiscal space in case of natural disasters, Supplement, and exports/imports,” she explained.
She spoke on the internal and external initiatives of the insurance sector in sustainable economic development.
According to her, internal initiatives “are initiatives performed within the organisation impacting employees, internal processes, policies, and procedures. Such initiatives include reducing carbon footprint through various initiatives such as process automation that reduces paper usage and the Introduction of Solar/Gas into the energy mix.
“People and Culture: Improve employee well-being and experience, train the workforce on sustainability-related subjects, and financial education to create awareness.
“Governance: Governance processes that support specific sustainability-led missions and goals and meet sustainability-related reporting standards such as International Financial Reporting Standard (IFRS) S1 and S2.”
On external initiatives, the Keynote Speaker said “These are initiatives performed by the organisation impacting the society and their brand image, to generate revenue. Such initiatives include Product Innovation such as carbon neutral insurance, green bonds, green underwriting, sustainability-linked investment in renewable/ alternative energy projects, and sustainable infrastructure projects.
“Develop culturally sensitive products that resonate with Nigeria’s diverse population, such as the expansion of micro-insurance tailored to informal sector workers.
“Use data analytics to better understand customer behaviour, price risks accurately, and design more responsive products.
“Partnerships with Financial Institutions: Collaborate with banks, fintech, and microfinance institutions to distribute insurance products. For example, bundling insurance with loans or savings accounts can increase penetration.
“Foster an ethical industry culture where customer interests are prioritised to rebuild trust.”
Speaking also at the progromme, on the areas of the Sustainable Development Goals (SDGs) that Insurance companies can positively impact, the Group Chairman, NEM Insurance, Tope Smart, said, insurance operators can have an impact on climate change through their role as investors in companies.
For him, in paying claims, they help promote higher construction standards, insurance companies can support this goal through Motor Insurance by incentivising safe driving habits.
He said underwriting firms can invest in infrastructure projects; Insurance companies can support this goal by expanding and providing Health Insurance to a larger share of the population. Health insurance also helps to reduce out-of-pocket expenses.
“Micro-insurance has significant potential here as it assists families in withstanding economic losses due to illness, property damage, or death of a wage earner.
“Insurance creates financial stability by making economies more resilient. They also offer credit insurance that helps companies grow bigger. Insurers also create employment through their activities.
“Insurance can contribute to this goal via paying claims that ensure the business continuity of companies after a loss, preserving employment, and using pension products to reduce old-age poverty,” he said.
