Insurance industry on aggressive 10-year inclusive roadmap

The nation’s insurance industry has set for itself a 10-years inclusive road map, expected to position the sector as major player in the financial services industry contributing meaningfully to Nigeria’s GDP.

According to the National Insurance Commission (NAICOM), the road map seeks to establish, develop and maintain a fair, safe, stable and inclusive insurance market for the protection of beneficiaries of insurance contracts, competitive returns to investors and optimal contribution to Nigeria’s economic development.

George Onekhena , deputy commissioner, Finance and Administration at NAICOM making a presentation at the recently concluded National Insurance Conference (NIC) organized by the Insurance Industry Consultative Council (IICC) held in Abuja said Nigeria has an abysmally low insurance penetration when compared to its peers and other benchmarks jurisdictions.

He said therefore that with necessary and sufficient interventions, the current level of insurance penetration of 0.5 percent can be substantially improved upon.

According to him, the vision of the road which will be launched soon is to be an innovative insurance market in Africa noted for high level of capacity, transparency, efficiency, stability and inclusiveness supporting the economic growth agenda of the country and attaining optimal rate of insurance penetration at all times.

“The strategy therefore is to create an optimal regulatory environment devoid of burden, yet facilitating growth of the industry through deployment of relevant industry infrastructure and standards and facilitation of competitiveness, inclusion, operational efficiency and profitability of insurance institution.”

Part of the strategy he said include enhancing insurance acceptance and patronage through undiluted compliance with laws and regulation, product and service innovation and prompt claims settlement.

Others include riding on the opportunities in increased insurance acceptance, technology enablement and government initiatives to enhance contribution of insurance to Nigerian economy.

Onekhena also noted that there are issues to be confronted, which include that insurance is sold not bought, stating of the need for someone sufficiently informed and motivated to convince the buyer on the need for an intangible product.

According to him, the level of poverty is a potent restraining factor in the push for financial inclusion. Tangible needs Vs intangible ones.

“Insurance institutions may not consider rural and the low income segments financially worthwhile; even if they did they may not find the resources to invest in such ventures. This is more so in the face of impending transition to risk based supervision.”

“There may be need to promote inclusive insurance until it acquires scale, putting stress on financial resources of insurance institutions, otherwise in the light of the above the target set for financial inclusion could be over ambitious.”

He however recommends that the industry needs to pay attention to and invest in inclusive insurance markets because of its promise for the future and Government expectations thereof.

“Given a world of increasing complexity and uncertainty, all stakeholders should be open to innovative solutions and productive collaborations”

“As the industry is service oriented, the importance of deploying qualified and value adding employees are very high. This should be deliberately managed, while efforts should be geared towards watching out for insurance fraud, Onekhena stated.