The nation’s insurance industry is betting on partnerships and technology to unlock market penetration in Africa’s most populous country Nigeria.
Market penetration is paltry 0.4 percent according to industry statistics and remains a major concern for players and stakeholders in the industry.
For most foreign insurers in the Nigerian market, the attraction they say is the country’s low market penetration amidst a large population.
Nigeria is in excess of 200 million with demography favouring the large middle class and youth population, which analysts have said means growth potential for service providers like insurance.
When Sanlam, Africa’s largest non-banking financial services company birthed formerly in Nigeria last week, its admiration and interest in the market were because of the country’s low penetration.
Sanlam Pan Africa (SPA) Life Insurance Cluster CEO Robert Dommisse highlighted Sanlam’s commitment to Nigeria and the importance of the West African market to Sanlam.
He said that Sanlam will leverage partnerships with MTN, which is a South African brand to deepen penetration, leveraging on its over 35 million-customer base to get insurance across to many in Nigeria, he said.
“Nigeria has always been one of the most important markets for the Sanlam Group because the country is such a key economy on the African continent. It has always been imperative that Sanlam has a strong presence and operation in Nigeria. We have a good business in the Nigerian market, and we are going to continually invest and grow the operation. It is important for us that we do so under the Sanlam brand so that the existing and potential customers know that they will be getting the full support of the promises we make in the market, Dommisse said.
“We’re very excited about the introduction of the Sanlam brand in Nigeria and we believe it’s a great moment in time for us to step forward to show our brand across an array of touch points and have our diverse stakeholders interact positively with the brand in the Nigeria market,” Dommisse added.
He said the company have to get to more people, and so must find ways to reach them.
The nation’s insurance industry in 2021 financial has accumulated total assets of N2.139 trillion according to by the National Insurance Commission (NAICOM).
Experts say that Nigeria’s insurance penetration will see a quantum leap if the country can intensify financial inclusion education and improve access to credit.
According to them financial education is key to achieving strong inclusion across all levels of the population.
Others are increased access to credit, enforcement of compulsory insurances, regulation and an improved macro-economic environment.
Joshua Ogbeifun of Leadway Assurance said low penetration is a major challenge facing the industry and underscores why stakeholders must play their role to increase the uptake of insurance across the population.
Ogbeifun while stating that insurance penetration in Nigeria at 0.3 per cent shows that we are lagging behind, noted that something needs to be done collectively.
Ogbeifun who called on the government to ensure changes in the nation’s macro-economic conditions to encourage job creation and increased employment also urged the government at all levels to provide adequate credit facility that promotes private business operation and entrepreneurship in order to empower the people financially.
“If there is access to credit, people can acquire assets, people can take loans and invest, and all of these will be insured to protect against loss”
NAICOM said the industry’s unaudited report shows a gross premium income (GPI) N630.362 billion at the end of 2021, as against N514 billion (audited) in 2020, indicating 22 percent increase.
From the business generated in the review year, insurance companies paid N238.050 billion as claims to policyholders that had losses during the year, as well as on matured benefits in the case of the life business.