Mutual benefit Assurance Plc. has called for the development of the informal sector of the industry and stronger regulations from the regulatory body to unlock untapped potentials in the industry.
Akin Ogunbiyi, group chairman, Mutual Benefits Assurance Plc disclosed this while addressing questions on trust index and why the insurance industry is not meeting up with other sectors at a breakfast meeting recently hosted in Lagos to mark his 60th birthday.
He added that overregulation in the industry as people said is only on a capital basis, noting the need for the sector to have strong regulation as CBN regulates banks to push the sector forward.
“We would have done better in the insurance industry if there was strong regulation,” he added.
According to the Chairman, Insurance is almost a hundred-year old now but it is still at infancy. “Insurance penetration in Nigeria today is still under 0.25 and I have heard them quote 0.25 in the last 10 and 20 years, even since I came into the industry.
“Insurance has focused majorly on corporate insurance and there hasn’t been any attempt whatsoever to penetrate with the informal sector. If really insurance is to develop, I will tell you, it is the informal sector where every transaction that happens in Nigeria today, is ratio one to nine, that is one percent for the formal sector and nine percent in the informal sector, and these informal sectors were not captured in any statistics in any way,” Ogunbiyi said.
He said, “If you look at their big players, where do you find them, you find them in cities. I have companies that their marketing strategy is only working on a regional basis. The top flight insurance companies don’t have branches everywhere; they have in Lagos, Abuja, Kaduna and Port Harcourt. Nobody has ever taken time to develop the informal sector till I came into the sector.”
On the side of regulation, Ogunbiyi stated the need for a very powerful regulation, adding that some companies have been on the brink for so long but the boldness to sanitise the industry was not there.
“If you look at the companies disrupting the market today, it is still those big players like Leadway, NEM, AIICO and others. These are the big time insurance that time and they dictate for NAICOM. When you have the regulated dictating for the regulator it’s a major issue. So we always have these challenges. All the insurance companies that went their own volition died a natural death not because NAICOM was involved. If NAICOM was trying to do what they were supposed to do, they would have taken their license. They allow them to die a natural death because there is no boldness on the part of NAICOM to do the right thing. If today insurance is going to develop, I think NAICOM will have a role.”