Insurance Sub-sector suffers worst Financial Exclusion in Nigeria

Ebere Nwoji

 

The insurance industry has been fingered as one of the arms of the finance sub-sector of the economy that has suffered the worst effect of financial exclusion problem.
This was disclosed recently by financial analysts in African Independent Television (AIT) programme monitored by THISDAY Newspapers.

According to the analysts, greater number of Nigerians in both urban and rural parts of the country, live their lives and go about their businesses without having anything to do or caring to have anything to do with insurance.

The analysts said most of these are well learned yet they cared less about insurance.
The analysts said these are the target of the Central Bank of Nigeria (CBN) in its financial inclusion strategy.

This, they noted is also a sign of poor savings habit among Nigerians and explains the long gap between Nigerians and financial institutions like banks when it comes to credit grants.

According to them, Nigerians into micro, small and medium scale businesses find it difficult getting loan because the finance institutions are looking at their money generating and savings habit as they encouraged Nigerians to imbibe good savings habit to enable them grow tiger businesses through loans granted by banks.
They also encouraged them to buy insurance services to help mitigate against risks.

The experts also attributed people’s apathy to insurance to poor awareness creation by insurance operators.

These observations are coming on the heels of similar observation and comment on poor insurance awareness and poor publicity campaigns among insurance industry operators by the Minister of Finance Kemi Adeosun, who at the recent insurance conference held in Abuja, disclosed that out of the 57 insurance companies in the country, less than 23 advertise their products while others often leave the public in the dark concerning their products and insurance industry at large.

The minister identified low awareness as one of the factors responsible for the under-performance of insurance sector.

“The companies put in less than 20 adverts on television, less than 10 adverts on radio and less than 10 adverts on social media.
“Other factors include poor distribution channels and unethical practices among operators,” she said.
Adeosun said that her ministry was working vigorously with the National Insurance Commission NAICOM to cover this gap and ensure that the industry begins to perform optimally.

Law Union Pays N762m Claims in Half-year 2016

Law Union & Rock Insurance Plc, said it has paid a total of N762million claims to her customers in the first six months of this year.
This represents 11 percent increase in the quantum of claims paid by the company in the corresponding period in 2015.

The company said this was part of its efforts to keep faith with all stakeholders. It also said this commitment was in line with its strategic direction which focuses on customer satisfaction.
Commenting on the company’s commitment in this direction, the Managing Director, Jide Orimolade said the company believes that Nigerians need insurance most now more than ever.

He gave a breakdown of the paid claims saying the company paid the sum of N271, 287,135 on Motor insurance, which is the highest among the claims paid within the period and accounted for 35.5% of the total claims paid within the period under review.

According to him, this was followed by claims from fire on which the company paid N227,242,749.
Orimolade said this experience underscored the need for people to consider taking insurance cover especially against motor and fire risks.

He highlighted other businesses where claims were paid as General Accident, Marine& Aviation, Bond and Credit, Engineering and Oil & Gas and Energy insurances.
He said despite the down turn in the economy, the company recorded a positive growth in its Assets and Gross Premium Written within the same period.

The company’s assets, he added, grew by 3.51% from N8,273,420,000 to N8,996,290, 000 while Gross Premium Written of N2.37billion was recorded by the company with a growth of 2.6% compared with second quarter of 2015.

“In 2015, a sum of N1.64billion was paid as claim- which confirms our sincere commitment to our policyholders said Mr. Orimolade, informing that his company had lined up various strategic initiatives to accelerate claims processing.

Orimolade, while encouraging Nigerians to take up insurance covers narrated that the company through her continuous product innovation program had developed products which are tailored to the need of the public and cut across all classes of Nigerians raging from low to high income earners. According to him, two new products of the Company–“Home Guard and I-Care” had just been released into the market and can be assessed through any of the company’s agency network and its website to ease the accessibility.

He reiterated the company’s resolute commitment to stand by all her esteemed customers in this period of economic downturn through prompt response to their needs and urged new customers of the company to partner with the company especially with its promise of efficient service delivery.

 

Source: Thisday