Vice President Yemi Osinbajo at the weekend expressed concerns over the several risks associated with investment in the insurance sector, and the need for government and stakeholders to tackle the challenges that have nearly crippled the industry.
The challenges, according to him, include lack of adherence to insurance practice which makes it difficult for government to achieve its objectives for the sector.
Prof Osinbajo who disclosed this at the investiture of Mrs. Bola Onigbogi as the 20th President of the National Council of Registered Insurance Brokers (NCRIB) in Abuja, asked the council to partner with the Federal Government to face the challenges that have crippled the industry.
He emphasized the importance of insurance as he said it is vital for the development of the economy which is why the government would do all it could, including working with the new leadership of the NCRIB to address the challenges facing the sector.
In her own address, Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said that there was a need for operators to reinvent how it sold insurance products to the public.
She called on the operators to create a new initiative so as to reposition the industry, as she stressed that innovative products were needed to help businesses succeed and in turn achieve economic growth.
Ahmed further made known that the present administration was taking steps to take the economy out of the current challenges and would require the support of the insurance industry.
According to a report by Coronation Research, Nigeria’s insurance industry has not shared in the growth experienced by other sectors as it has hardly grown in real terms over the past 10 years.
The industry suffers from poor returns on equity. Yet, its smallness is its opportunity. If it were to grow to the level reached by countries with similar GDP per capita, it might grow by a factor of 10 times in real terms in eight-to-10 years. The technological infrastructure and data necessary for expansion are largely available.
As stated in the report, Nigeria’s insurance penetration, at 0.31 per cent, is less than one-tenth of that of India (with similar GDP per capita) which suggests significant untapped potential. The business opportunity exists because of Nigeria’s very low bases in insurance penetration and insurance density.
