Insurers target $100bn in 2 years as hunt for unreached gathers pace
Insurance companies in Nigeria are in a hot chase for the unreached as the industry plans to gross $100 billion between two to five years.
Insurance currently contributes less than one percent to Nigeria’s gross domestic product (GDP), meaning the sector shares less than $4.2 billion in the country’s $420 billion economy.
If the sector penetrates the unreached population in Nigeria and grosses $100 billion, it will be contributing 24 per cent to Nigeria’s GDP.
“One of the ways we are penetrating is through Takaful insurance, whereby contributors share risks rather than transfer them,” said Wan Zamri , MD, Noor Insurance, represented by Rasheed Olatunde, at the stakeholders’ forum of the Lagos Chamber of Commerce and Industry (LCCI) Insurance Group tagged ‘Reaching the Unreached’.
“It is a Sharia-compliant insurance, which disagrees with gambling, alcohol and says everything must be open. One of the reasons for low penetration is religious bias and we have achieved something with Takaful in this area,” Zamri said, adding that there were over 300 Takaful firms.
He stated that conventional insurance grew by five per cent whereas Takaful grew by over 20 per cent.
Nike Akande, president of LCCI, said there was a need to improve the dismally low insurance penetration in Nigeria.
Akande said lack of trust, religious and cultural bias as well as low awareness of available insurance products were key factors affecting insurance penetration in Nigeria, adding that there was still little available information of potential customers existing in the country.
“There is a general poor attitude to insurance by Nigerians. The scanty or even absence of insurance in local governments contributes to low penetration,” she said, stressing the need to intensify insurance education in the country while introducing it at the secondary school level.
Fatai Adegbenro, executive secretary, Nigerian Council of Registered Insurance Brokers (NCRIB), said the industry had been sleeping over the years because key players failed to show the public that insurance was not elitist.
“We have to find a way of giving the public something they can get back immediately,” Adegbenro said.
According to Hakeem Dickson, director-general and chief executive officer of Lagos State Safety Commission, his agency would soon make it mandatory for all buildings and vehicles to be insured to save the lives of Lagosians.
“With this compulsory insurance coming, landlords must insure their tenants and companies will insure their staff. This will help to expand the industry. You can live longer if you take insurance as part of your life,” Dickson said.
Gboyega Olanbiwoninu, chairman of LCCI Insurance Group, commended the Lagos State Government for its resolve to increase insurance penetration, stressing that this would certainly raise the stakes in the industry.
ODINAKA ANUDU