By Etuka Sunday
Commissioner for Insurance, Mohammed Kari has said that a cursory overviewon the access to financial services in Nigeria indicates that there is a huge deficit in terms of financial inclusion to which insurance is a veritable part.
Kari who spoke at the Chief Executive Officers’ Retreat of the Nigerian Council of Registered Insurance Brokers (NCRIB) in Uyo, the AkwaIbom State Capital said, in the past five years, the Gross Written Premium of the industry has hovered between N300bn – N320bn. What this signifies is that the figures are not growing in the same proportion if the enormous potential at the disposal of the sector is to be used as benchmark.
He said, “Nigeria, according to the 2017 world population records, is designated as the seventh most populous country in the world accounting for 2.6% of the world population; this translates into Nigeria being the world’s most populous black nation. Again, Nigeria is the 21st largest economy of the world in Gross Domestic Product (GDP) terms and the largest economy in Africa.
“However, a cursory overview on the access to financial services in Nigeria indicates that there is a huge deficit in terms of financial inclusion to which insurance is a veritable part. Statistical analysis indicates that Nigeria requires aggressive and strategic developmental efforts towards reaping the benefits of her abundant potentials. This has become an imperative rather than an option if ordinary Nigerians who have no access to financial services must be brought to the fold”, he said.
The Insurance boss said, “haven taken due cognizance of these indices, NAICOM over the years had taken steps to create the legal framework and enabling environment for insurance business to thrive in Nigeria. Thus, the Commission had evolved several market development initiatives and platform to upscale insurance awareness and access, channels of distribution, product development to guarantee a stronger and viable insurance sector in Nigeria. The Commission expects the industry operators particularly, Brokers and Underwriters to continuously take advantage of these initiatives to grow not just their respective business but the industry.
“To address identified gaps existing in the regulation and supervision of Nigerian Insurance sector, NAICOM would continually issue new and supplementary guidelines to plug such gaps. To this end and to supplement the tweakings in the distribution channels, we would very soon expose specifics drafts of guidelines directed to each sector of the industry. When the Brokers’ is released, you would see our idea for “the Future Broker”. This, we believe, would complement the excellent effort of this retreat. We are sure there would be in it, prescriptions of the appropriate medication needed to cure some of the illnesses inhibiting today’s broker. This would speed up the realisation of “the Future Broker”
“It is crucial for all stakeholders in the industry to begin to evolve strategies for exploiting the retail end of the market. It is no gainsaying the future of the industry will depend more on retail rather than corporate businesses”, he said.
Kari said, according to statistical reports, the Nigerian adult population which consists of people from 18 years and above is 96.4 million, out of which 59.6 million are living in the rural areas. Among this rural populace, 40.1 million are excluded from any form of financial services. Additionally, the Nigerian formal sector provides income to only 7.9 million adults, representing 4.2%, whereas 41.6% are excluded from financial services, including insurance. This offers a huge opportunity for “the future broker” to provide desirable services to close these existing gaps and enhance the general performance of the industry.
He said, “For us at the National Insurance Commission (NAICOM), let me re-emphasize our commitment towards driving the Nigeria insurance industry to greater heights by providing strategic and far reaching regulatory frameworks and market development initiatives in accordance with extant laws and best practices.
“The Commission specifically introduced Microinsurance, including Takaful products in the Country as an attempt to address the identified existing gaps to aid penetration and as well as reach the segment of the market that was either hitherto unreached or not comfortable with the conventional insurance products.
“The decision to create additional channels for insurance distribution is also in this light. We are equally optimistic that the expanded distribution channels will in no distant time aid the penetration of insurance in Nigeria and subsequently lead to a substantial leap in the contribution of insurance to the nation’s Gross Domestic Product (GDP).
“With the recent climatic changes and the menace of floods, storms and outbreak of diseases to our Agricultural produce and livestock, NAICOM is poised to improve its regulatory and supervisory framework to cater for Index Based Agricultural Insurance (IBAI) Products. We believe these are other areas where “the future insurance broker” could also take advantage.
“In conclusion, let me re-emphasize that beyond creating the enabling legal and regulatory environment for insurance business to thrive in our economy, the prospects and sustainability of the industry heavily depends on the ability of operators to develop the right products that suit the needs of the identified market, efficiently and effectively distribute their products to the various target markets, create adequate awareness to realize delivery of services and meeting expectations of the target customers”, he said.