The maiden Insurance Summit of The Independent Newspaper was for the tabloid another dimension to chart new growth narratives for the insurance market. It was a Wednesday, 17th April 2024 to remember with the theme “Inclusive Insurance: Navigating The New Narratives For Sectoral Growth” held at Lagos Oriental Hotel, Victoria Island, Lagos.
The rainbow coalition event from the point of attendees identified low insurance awareness, education and penetration as the bane of the sector and canvassed strong need for the operators to be innovative by leveraging technology to chart new distribution channels for insurance products and services.
With a snap shot of performance of the insurance industry in the past few years, panelists noted that the progress so far made does not align with the country’s population of over 200million people, with only 1.5per cent of all Nigerian adults covered by insurance while uninsured Nigerians have daily life and endeavour risks unattached to any insurance company.
Plain talking panelists who were mostly insurance operators admitted the prevalence inadequate manpower development, financial illiteracy and trust issue as challenges the sector must address to be competitive.
In his keynote address, Olorundare Sunday Thomas, the Commissioner for Insurance, National Insurance Commission (NAICOM) represented by Ajibola Bankole, Deputy Director at NAICOM, noted the progressive trend of the sector occasioned by positive market performance at the close of 2023.
According to the CFI, the Nigerian Insurance industry has sustained its progressive trend recording a milestone N1.003tr gross premium income, representing about 27 per cent growth compared to the N790bn recorded in 2022. He however said this should not be seen as the end of story because Nigeria’s insurance sector is still largely underexplored, with the industry’s penetration at less than one per cent of gross domestic product (GDP).
He spread the performance sheet to let operators know that there are more miles to cover, he said there is a burden to do more because insurance inclusion studies approximate only 1.5% of all Nigerian adults covered by insurance today. A contributor to this perception of the market he noted is the limited knowledge of insurance amongst the public
Besides, he said the data from the studies also compels the Commission to act more to improve insurance embrace by creating enabling regulatory environment, streamlining regulations, encouraging innovation, and promotion of fair pricing practices for inclusive products. NAICOM he said, wants insurance companies to embrace this shift by: leveraging technology, developing inclusive products, investing in alternative distribution channels and prioritizing customer education. “Let us also prioritize education and awareness campaigns to empower individuals with the knowledge they need to make informed decisions about risk management and financial protection,” said Mr Thomas.
The Commissioner maintained that as part of the NAICOM’s Financial Inclusion drive, the Commission has issued new operating licenses to new Micro insurance and Takaful Insurance operators and revised Guidelines on Bancassurance, Web aggregators and provided a Regulatory Sandbox to help drive more inclusiveness for insurance.
With a chopper view of the industry he said, “The landscape of insurance is evolving rapidly, presenting us with both challenges and opportunities. From climate change-induced risks to emerging digital disruptions, our resilience and adaptability will be tested.”
Eddie Efekoha, Group Chief Executive Officer, Consolidated Hallmark Holdings Plc, the chairman of the occasion noted that since the National Insurance Commission came up with an insurance bill in 2003, the public understanding of insurance, particularly among the retail service, has gradually improved while its penetration rate has increased though marginally.
Pointing to route that should be taken Efekoha said, “It is vital for the insurance industry to consistently create insurance awareness, with private sector, individually and through joint initiatives to underscore the importance of the insurance industry. Among other things we must do within the industry value chain, attention is needed in sustaining of products, and services, as well as strategies to ensure increased penetration rate.”
However, he acknowledged the fact that the sector has witnessed growth away from what it used to be and placing an uptick for the market he cleared, “we are ahead of the banking industry, when I say we are ahead, it is because our capital is increasing on daily basis because we are trying to index it and link it to the risks in life. It’s a function of what you do that determines what you get.”
Ebelechukwu Nwachukwu, Managing Director/Chief Executive Officer, Royal Exchange General Insurance Company Limited, who spoke on the theme paper believes that the industry has evolved in the past 10 years.
According to her, the industry has come a long way from a focus to serve the corporate market to focusing on serving the retail market and the other side of the economy with particular shift to agriculture insurance. “What we do is to create awareness to make people know that they do not need to have a lot of money before they do insurance.” Despite the hole in the industry awareness campaign she said the market has done a lot in creating awareness on the role of insurance in protecting businesses and people’s assets.
On the way out, she called on the insurance industry to collaborate with regulators, the banking sector, entertainment industry as well as agriculture and other sectors to drive insurance sector to the place of part of life and businesses. “We have to send a message that insurance is a culture and culture is insurance. Insurance is a tool that every Nigerian must consider the subject matter as more of inclusive insurance. The insurance sector is including all other sectors and will continue to do so,” she submitted.
Ayodele Adio, Lead Strategist at Avalon Media Group and panelist at the event called for a deliberate policy action by the insurance operators to ensure strategic marketing and campaign that would reposition the industry for its desired growth.
Featured picture, L-R: Eddie Efekoha, Chairman of occasion and Group Chief Executive Officer, Consolidated Hallmark Holdings Plc; CSP Ishola Olaitan, Divisional Police Officer, Lion Building/representative of Lagos Commissioner of Police; Yetunde Ilori, Director General, Nigerian Insurers Association, and Ebelechukwu Nwachukwu, Managing Director/CEO, Royal Exchange General Insurance Company during the maiden Independent Insurance Summit 2024, held in Lagos on Wednesday.
