Less than one per cent of Nigerians voluntarily subscribe to life insurance due to a general apathy for the business by the government and the citizens.
According to the National Insurance Commission and the Nigerian Insurers Association, less than one per cent of Nigerians have taken life insurance cover.
The Director-General, NIA, Mr. Sunday Thomas, expressed worry that Nigeria was among the least countries in terms of insurance contribution to the Gross Domestic Product at 0.72 per cent.
“The country’s diagnostic study says less than one per cent of the adult population in Nigeria has access to a voluntary insurance policy,” he said.
The Nigerian insurance sector, he said, was grossly untapped because it had not yet appealed to the informal sector, which constituted over 80 per cent of the population.
Thomas noted that it was common knowledge that insurance culture was very low among people in the informal sector, adding that it would take deliberate efforts to win the confidence of this sector.
“For the NIA, the obvious way forward is through closer interaction with this sector, intensive capacity building and greater expertise in micro insurance, providing unique micro insurance services, development of people-friendly products, and improved innovative distributive system,” he said.
Thomas explained that micro insurance was targeted at the informal sector and the low-income earners.
He said it was a veritable tool for mitigating losses from unexpected accidents and disasters, adding that the low-income earners were invariably exposed to innumerable risks.
According to the director-general, micro insurance works on the phenomenon of risk transfer mechanism characterised by low premiums and low coverage limits.
He pointed out that the NAICOM had set out the framework, road map, and market and regulatory strategic directions for the operation of micro insurance in Nigeria.
The Commissioner for Insurance, Mr. Mohammed Kari, said the government’s general attitude to insurance had to improve.
“There is low patronage of insurance by government and its agencies and lack of effort to protect public assets. Even when it does, the funding is haphazard,” he noted.
According to him, it is common knowledge that the ability of the government to replace damaged or lost assets is not as sound as it used to be; as such, insurance is the best alternative to having no protection at all.
“Employees, especially our gallant members of the armed forces fighting insurgents, need to have the comfort of insurance protection as they carry out their duties,” he said.
The commissioner said there was an apparent lack of insurance expertise in the civil service, which was making the government not to be properly guided internally as it ventured to deal with the industry.
Kari said the position of insurance practitioners was virtually non-existent in the civil service’s scheme of service, for the few insurance professionals in the service were not placed properly to play their role.
The commissioner also said the industry had been yearning for a review of the insurance laws in the country, adding that a bill had been drafted and submitted to the Ministry of Finance with the full involvement of all stakeholders.
He, however, noted that almost five years later, nothing had been heard of the bill.