There are new and exponential growth prospects for Nigeria’s insurance industry as mobile telephony networks display the potential to rev up the sector.
Fola Daniel, Nigeria’s commissioner for insurance, said yesterday that 100,000 new insurance facility sales were being accomplished on the MTN network alone.
“We are beginning to see impact of MTN deployment towards selling insurance in Nigeria and this will bring a huge market for us. We are currently recording 100,000 new sales monthly on that network, and if we have four other service providers doing the same, we can have rapid growth. So deploying IT and telephony to sell insurance is the wise thing to do now,” Daniel said on the sidelines of the ongoing African Insurance Organisation (AIO) Conference and General Assembly in Kigali, Rwanda.
FBN Life Assurance Limited had earlier announced in Lagos that it had signed a new deal with mobile telephony network Airtel that would take insurance to the mass market.
This groundbreaking feat reinforces the National Insurance Commission’s (NAICOM) market development and restructuring initiative targeted at deepening insurance penetration, particularly to the grassroots, in a simple, convenient and affordable platform.
The product ‘Padi4life’ is a life protection plan available to registered Airtel subscribers upon payment of a daily premium of N20. It provides all Airtel subscribers the opportunity to take daily insurance cover for as low as N20 for permanent disability or death, providing benefit of N500,000 for one Airtel line and N1 million for two lines.
To enroll for the insurance service, Airtel subscribers just require to text LIFE to 45433 on their phones and follow the prompts they receive.
“With this product, FBN Life is the first insurance company in Nigeria to embark on this innovative and revolutionary method of selling life insurance protection, having been supported strongly by its ownership strength of FBN Holdings plc and the Sanlam Group of South Africa, whose combined wealth of experience and expansive network place the company at an advantage to lead on consumer-friendly and affordable insurance products,” Val Ojumah, managing director, FBN, said at the media unveiling of the product.
“We are pursuing strategic opportunities in partnership with other financial service businesses and mobile network operators, on key initiatives to increase penetration and distribution of our products. It is one thing I as person will continue to remember, particularly that it is going to take care of the poor and less-privileged in our society who otherwise would not have thought of insurance,” he added.
Deepack Srivastava, COO and executive director, Airtel, said, “It is not about network now, but about products that create value and improve the lives of our customers.”
Speaking further at the ongoing Kigali conference, Daniel said, “Not only will this deepen penetration to the mass of uninsured populace in Nigeria; it will reduce operational cost of insurance companies and make them more profitable.”
The commissioner said the theme of the conference ‘Insurance in Africa: The Importance, Research and Development’ was apt and the way to go if Nigeria and Africa as a whole must make reasonable impact in the global insurance size and economies in the continent.
Citing the successes achieved by Ghana’s insurance market, which grew its contribution to the country’s GDP by 8 percent in five years of adopting technology and telephony insurance for product distribution, he said Nigeria could also do it.
According to Daniel, apart from reaching people faster, the administrative cost on the companies would be very small, adding, “One of the issues among companies in Nigeria today is the high cost of doing business, above average and one of the highest in Africa. So, if we find a means of selling more of our products without incurring much cost, it will be better for us.”
On regulations, Daniel said the commission would continue to improve on its rating, looking at other authorities in Europe and America as a standard.
“The IMF gave an evaluation on our regulatory capacity in 2012 and we got an average score, which is okay. But we are not satisfied because we should be above average, but at least an evaluation has been done and we know our weak points and our strength, so, we are looking at the gaps and doing everything to block the gaps,” he concluded.
Modestus Anaesoronye
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