Worried by low insurance penetration in Nigeria, stakeholders have canvassed radical policies that will help raise operational profile of underwriting business in the country.
Besides, they stressed that the attitude of the government to the growth and development of insurance must take new form, as they observed that the governments have not accorded insurance business the right position it deserves in their strategic plans as the most favoured risk transfer mechanism.
The Chairman/International Consultant Global Intellectual Consult Limited, Professor Mike Ikupolati, in an interview with The Guardian on ways of deepening penetration in a population of 170 million people, regretted that insurance penetration in Nigeria is extremely low, such that even in Africa, we are rated behind countries such as South Africa, Ghana, Angola, Kenya. For instance, insurance penetration in Nigeria in 2012 (0.7%); Angola (1.1%); Kenya (3.1%); South Africa (14.2%).
He said that from the available facts, it has become imperative that Nigeria as the giant of Africa must take some radical decisions and policies to improve insurance penetration.
According to him, we need leaders who are visionary, knowledgeable in insurance and who appreciate the roles insurance can play in the socio-economic development of our nation and who can champion the course of insurance in Nigeria. He insisted that the Federal Government must accord insurance the right position it deserves in her strategic plans to create an egalitarian society for Nigeria. There should be an insurance professional in the presidency to advise the President on policies that will affect insurance and pension sectors in Nigeria because this is a critical sector the government and its agencies must not ignore. This is in addition to the role of the regulator.
He said “The regulatory body, NAICOM, must join hands with the industry to create public awareness for the importance of insurance in Nigeria and research on modalities for effective regulatory framework that will not create unnecessary business interruptions in the practice of insurance in Nigeria”
Prof Ikupolati said “The insurance industry in Nigeria should set up a high-powered national committee on insurance penetration in Nigeria as a way forward. This committee should include representatives from NAICOM, NIA, NCRIB, CIIN, ARIAN, the Police etc. and this national committee should operate via a local government subcommittees in all local government areas of Nigeria. The local government subcommittees will identify the insurance needs at the local levels and inform the national committee who will recommend appropriate insurance policies to meet such needs. NAICOM will then establish or expand their insurance public complaint bureau to operate in all local government areas of Nigeria to handle any conflicts at that levels.”
“A risk-based approach to insurance regulation as it is in the United Kingdom should be adopted in Nigeria so that the regulator will only concentrate on areas of an insurance company operations that are susceptible to risks and thus minimize business interruptions and enhance insurance penetration in Nigeria. Also, the risk-based approach will allow individual company grow their capital according to the volume of the businesses rather than have uniform capitalization where smaller operators have excess capital without avenue for appropriate investment or adequate return on investments of such excess funds.” he said.
He said “There must be a change of attitude to insurance by the government. The public and insurance practitioners themselves so that the culture of insurance can be built in all facet of our life endeavours in Nigeria. When you have positive attitude to insurance, I have a positive attitude to insurance, insurance will penetrate all segments of our society in Nigeria. Besides, we must remember that a well developed and evolved insurance sector is what is needed for economic development of Nigeria now even than ever before. Insurance can easily provide the required long-term funds for infrastructure development and simultaneously strengthens the risk taking ability of other industrial sectors of the economy, so that together we can build a virile economy for our nation”.
The Commissioner for Insurance, Mohammed Kari, speaking on the role of the regulator in deepening penetration said beyond providing leadership and a sane regulatory environment for insurance entities to operate, the commission has continually introduced market developmental programmes and initiatives aimed at increasing penetration and assisting insurance institutions enhance their premium revenue generation and, by so doing increase the industry contributions to the nation’s Gross Domestic Product (GDP).
According to him, in 2009, the commission launched the Market Development and restructuring Initiatives (MDRI) programme. This is a medium term industry development plan designed by the commission with focus on the enforcement of compulsory insurance products, increase insurance awareness, reduction in incidences of fake insurance\reinsurances and increase agency reform.
This initiative was successfully launched in the six geo-political zones and Abuja. The commission also followed up with massive awareness campaign, roadshows and seminars in all the zones of the country. These efforts were geared towards making the insurance institutions richer and better. The question remins whether the insurance companies have been able to take maximum advantage of this window to grow their businesses.
The NAICOM boss said in 2013, the commission introduced and launched he micro-insurance and takaful under the financial inclusion programme to promote rural insurance, drive penetration increase premium portfolios of insurance entities and generate employment to the teaming youth.
In his remarks, Group Managing Director, Mutual Benefits Assurance Plc, Dr Akin Ogunbiyi, said that the compulsory insurance are actually for the benefit of the masses of our people. He explained that under the market development and restructuring initiative (MDRI), the commission expects the industry to generate at least N1 trillion premium income, you see somebody is challenging the industry to let you know the expectations expected from the industry..
He said “If the commission says under the project, the industry must generate N1 trillion premium, you can see somebody is challenging the industry to take action. But we have not been able to come up with products and services that meet the needs of 150 million Nigerians.
“Really if we want to increase insurance penetration in this country, we should look at the products and services that the common man can benefit to meet his needs, create value for them and make it affordable. The industry must rise up to the challenge of coming up with new products and services, we need to meet these needs.
He said the commission has the means to support the industry to ensure that Nigerians comply with these laws, but the entire industry must rise to take up his opportunity. It is not one insurance company that can do it, all of us must come together to take advantage of this opportunity. If we do that, he said, we will not only achieve N1 trillion premium but generate N3 trillion income because we have 150 million Nigerians to cater for.