The national financial inclusion target for the insurance industry development would be a mirage unless the industry’s players collaborate and address the immediate challenges undermining the growth of the industry, experts have said.
The experts who gathered at an Insurance Summit tagged, ‘Inclusive Insurance: Navigating the New Narratives for Sectorial Growth’, organised by the Daily Independent in Lagos, identified a lack of trained and adequate manpower development, financial illiteracy and low trust, among others, are some of the challenges affecting the sectors.
The industry players also recognised low insurance awareness as one of the challenges faced by the operators while stressing the need for the operators to think of innovatively leveraging technology to chart new distribution channels for insurance products and services.
Looking into the progressive performance of the industry in the past few years, the panelists agreed that the progress recorded so far in the industry does not tally with the country’s population of over 200 million, saying that only 1.5 per cent of Nigerian adults are covered by insurance while uninsured Nigerians face risks and require better mechanisms to mitigate risks as an alternative to the informal arrangements currently in use.
Speaking at the programme, the Deputy Director at the National Insurance Commission (NAICOM), Ajibola Bankole, said the insurance industry has sustained its progressive trend of positive market performance, recording a milestone growth of N1 trillion, representing about 27 per cent growth compared to the N790 billion recorded in 2022.
Bankole said despite achievements in the sector, there is still a need to explore other areas of penetration to improve its contribution to the gross domestic product (GDP).
According to him the theme for the summit could not have come at a better time, as it is very pertinent to the current national and institutional growth and development aspirations.
“As we convene today, I am encouraged by the diverse representation from various sectors here present. This underscores the collective commitment to harnessing the full potential of insurance for the country’s growth and development.”
“Insurance inclusion studies also approximate only 1.5 per cent of Nigerian adults are covered by insurance today. Uninsured Nigerians face risks and require better mechanisms to mitigate these risks as an alternative to the informal arrangements currently in use.
“The low insurance penetration in Nigeria is, in part, a consequence of the lack of trust and confidence in insurance companies. A contributor to this perception of the market is the limited knowledge of insurance among the public,” he said.
The representative of the NAICOM maintained that as part of the commission’s financial Inclusion drive, the commission has issued new operating licences to new micro-insurance and Takaful insurance operators revised guidelines on bancassurance and web aggregators and provided a regulatory sandbox to help drive more inclusiveness for insurance.
The Group Chief Executive Officer, Consolidated Hallmark Holdings Plc, Eddie Efekoha, said that since NAICOM came up with an insurance bill in 2003, the public understanding of insurance, particularly among the retail service, has gradually improved while its penetration rate has increased.
Also speaking the Managing Director/Chief Executive Officer, Royal Exchange General Insurance Company Limited, Ebelechukwu Nwachukwu, said the industry has come a long way from a focus on serving the corporate market to focusing, very significantly, on serving the retail market and the other areas of the economy with a particular shift in agriculture insurance.
