The insurance industry, will achieve a market asset base of N16 trillion and premium income of N6 trillion by the year 2020, the Director General of Nigerian Insurers Association (NIA), Mr. Sunday Thomas has said.
NIA is the Umbrella body of insurance underwriters in the country.
Thomas, who made the disclosure at the Access Bank’s Insurance Forum, Wednesday, however said for this to be achieved, the industry operators, must shun the current trend of unhealthy competition among them. He said the unhealthy competition has seen many of the underwriters charging premium rate that is as low as one percent while others charge at 0.85 percent rate instead of the standard rate.
He said if the industry operators were playing according to rules, in terms of premium charges, the industry would have in the past three years (2013) hit the above margin.
Currently, insurance industry ‘s premium income hovers around N312 billion while industry total asset base stands at about N715billion, according to industry estimates.
The NIA DG, said to meet the set target, the industry operators, must show vested interest in promoting retail insurance market segment, place interest of their customers at the centre of their business plan and strategy, as well as review and tailor their products to suit the present day customers.
He condemned the current trend whereby industry operators, focus much attention on corporate business while neglecting retail business, adding, cost of purchasing the corporate businesses impoverishes the industry.
He argued that among the operators that chase the corporate businesses, none of them retains the corporate accounts for good five years without losing such account to competitors despite how jealously he guides it.
He said on the contrary, the retail businesses are less expensive and could be retained for many years at little or no cost.
Thomas, also enjoined the insuring public to see insurance from the positive perspective, a shift from their already held opinion that insurers do not pay claims .
He said this negative perception of the industry by the public, inhibits the growth of the industry in addition to the activities of fake insurance operators.
The need to grow the industry’s premium income through the deepening of insurance penetration among Nigerians compelled the immediate past commissioner for Insurance Mr. Fola Daniel to launch the industry’s Market Development and Restructuring Initiative (MDRI) in 2009.
This is a medium term plan with the objective of transforming the industry from the premium income margin of below N300billion then to a trillion market in its first phase which lasted between 2009 to 2012.
This, the industry failed to achieve, though a lot of windows of opportunities have been created by the ex commissioner who set 2017 as ripe time to achieve the goal.
But Thomas is said that given the existing huge untapped opportunities in the country especially with the huge population and renovation and reconstruction projects going on in the north eastern part of the country occasioned by wanton destruction of lives and properties in the region by the dreaded Boko Haram insurgents, insurance would by 2020 generate premium in excess of N6 trillion if the operators will be awake to tap these opportunities in the next four years.