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Covid-19: Stakeholders seek strategies to deepen financial inclusion in insurance, pensions

Stakeholders in insurance and pension industries have deliberated on measures and strategies to deepen financial inclusion amidst challenges post Covid-19 pandemic era.

They said that Covid-19 has created some challenges and disruptions that require creativity and innovation from service providers including insurers and pension managers to explore growth opportunities opened to the sectors.

These were some of the outcomes at the 2021 Conference of the National Association of Insurance and Pension Correspondents held in Lagos.

Folashade Onanuga, former director-general, Lagos State Pension Commission (LASPEC), while delivering the theme paper ‘COVID-19 Impact on Financial Inclusion: Opportunities for Insurance & Pension Sectors’ said while the pandemic has caused severe disruptions, opportunities have also been created to grow customer base.

She said this is on account of the obvious fact that there is no real social security arrangement by government in the event of sudden and unexpected events, and so citizens need to make plans by themselves for wellness both in business and family life.

According to her, “Economic shocks like sudden loss of job, illness or death can send people living just above the poverty line into abject poverty. So whether one is in the formal or informal sector, there is the need to have a safety net. “The sudden and unforeseen calamities created by the pandemic has highlighted the need to plan for unforeseen circumstances and even early retirement.”

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To take advantage of these opportunities, she said, the pensions and insurance industries must remain committed to the inclusive growth of the Nigerian economy, creating opportunities for lower income groups to be part of the broader financial system.

Feyisayo Soyewo, chairman of the event and executive chairman, Prestige Insurance Brokers Ltd on his own remarks said that COVID-19 pandemic has helped corporate institutions to retool their operational strategies, leading to higher profitability and easier ways of doing things virtually and getting results.

Soyewo said that it was heart-warming that many individuals and operators have taken the whole pandemic experience as an opportunity for a paradigm shift in all undertakings.

“The theme of the conference cannot be more apt than now, when the entire world is just heaving a sigh of relieve from the ruinous impact of the pandemic.

“It makes little news that the pandemic disrupted the usual work culture and affected every facet of human endeavours ever experienced in recent history” Soyewo said.

According to him, the financial services sector of which the insurance and pensions are critical players also had their fair share of the impact of the pandemic.

“We must all come to terms with the fact that change is the only permanent thing in life and those who are resistant to change would be changed by change ultimately, ” the broker said.

Folashade Onanuga further noted that, “Financial inclusion is achieved when adult Nigerians have access to affordable financial products and services that meet their needs. Financial inclusion can only be achieved when financial transaction processes and documentations are transparent, simplified and seen as meeting needs of the people and at the same time being beneficial to the financial services sector.”

“Speaking of insurance, opportunities exist to increase insurance penetration and the customer base, both in the retail and corporate segments of the market if the right moves are made. Insurance penetration has remained at an average of 0.4 percent of GDP driven largely by a general lack of understanding and awareness of the benefits of insurance products, specifically amongst low-income Nigerians. We need to build trust. The Banking Sector has managed to bridge this gap to an extent.

For pension sector, according to LASPEC boss, “inclusive growth in pensions must recognize the peculiarity of the population segment being addressed, adding that this recognition must have an impact on how products are designed and how lower income segments of the population interact with pension funds. If you consider what happens in developed economies, there are different kinds of plans to meet different needs.”

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