The Nigerian insurance industry has been in existence for close to a century, yet, in the past five years, the Gross Written Premium of the industry has hovered between N300 billion and N320 billion, which is evident of the fact that the figures are not growing in the same proportion, if the enormous potential at the disposal of the sector is to be used as benchmark.
With the huge potentials in the industry, coupled with the recent upsurge in policy directions, the National Insurance Commission (NAICOM) has mapped out development strategies that would accommodate about 40.1 million adults in the rural areas that are excluded from any form of financial services across the country.
This point to the fact that there are still many risks that are yet to be insured, hence the need for operators to look for ways to harness all potentials that are lying fallow. If properly harnessed, it would move the industry towards the N16 trillion total asset base target for year 2020, and that alone can drastically improve the growth of the industry in return.
According to the commissioner, NAICOM, Mohammed Kari, insurance practitioners have not been able to flood the market with enough risk covers and this is a major reason researchers described the Nigerian insurance sector as grossly untapped, with less than one per cent of Nigerian housewives having insurance cover, even though the industry had been in existence for close to a century.
Kari said statistics have it that the Nigerian adult population, which consists of people from 18 years and above, is 96.4 million, out of which 59.6 million are living in the rural areas.He explained that among the rural populace, 40.1 million are excluded from any form of financial services, adding that the Nigerian formal sector provides income to only 7.9 million adults, representing 4.2 per cent, whereas 41.6 per cent are excluded from financial services, particularly, insurance.
According to him, this offers a huge opportunity for “the future broker” to provide desirable services to close these existing gaps and enhance the general performance of the industry.He said in the past five years, the Gross Written Premium of the industry has hovered between N300 billion and N320 billion, which is evident of the fact that the figures are not growing in the same proportion, if the enormous potential at the disposal of the sector is to be used as benchmark.
“Nigeria, according to the 2017 world population records, is designated as the seventh most populous country in the world, accounting for 2.6 per cent of the world population. Again, Nigeria is the 21st largest economy of the world in Gross Domestic Product (GDP) terms and the largest economy in Africa”, he noted.
Kari said a cursory overview of the access to financial services in Nigeria indicates that there is a huge deficit in terms of financial inclusion, which insurance is a veritable part, but missing great opportunities.He averred that statistical analysis indicates that Nigeria requires aggressive and strategic developmental efforts towards reaping the benefits of its abundant potentials and that this has become an imperative, rather than an option if ordinary Nigerians who have no access to financial services must be brought to the fold.
“For us at NAICOM, let me re-emphasize our commitment towards driving the Nigeria insurance industry to greater heights by providing strategic and far-reaching regulatory frameworks and market development initiatives in accordance with extant laws and best practices.
“The Commission, specifically introduced Microinsurance, including Takaful products in the country, as an attempt to address the identified existing gaps to aid penetration and reach the segment of the market that was either hitherto unreached or not comfortable with the conventional insurance products.
“The decision to create additional channels for insurance distribution is also in this light. We are equally optimistic that the expanded distribution channels will in no distant time aid the penetration of insurance in Nigeria and subsequently lead to a substantial leap in the contribution of insurance to the nation’s Gross Domestic Product (GDP)”.
The insurance expert said that with the recent climatic changes and the menace of floods, storms and outbreak of diseases to the country’s agricultural produce and livestock, NAICOM is poised to improve its regulatory and supervisory framework to cater for Index Based Agricultural Insurance (IBAI) Products.
He however, said that beyond creating the enabling legal and regulatory environment for insurance business to thrive in the economy, the prospects and sustainability of the industry heavily depends on the ability of operators to develop the right products that suit the needs of the identified market, efficiently and effectively distribute their products to the various target markets, create adequate awareness to realise delivery of services and expectations of the target customers.
“Against this background, I urge you to exploit the opportunities provided by this forum to get the necessary strategy for efficient and effective service delivery that shall herald the next level of business opportunities for the ‘Future Broker,” he added.
.Culled from Enterprise Television
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