Operators in the nation’s insurance industry have said the enforcement of compulsory policies, strengthening regulation and collaboration of operators will help to drive growth of the sector and its contribution to the economy.
They said this at the BusinessDay Insuring Prosperity Conference held on Tuesday in Lagos.
According to them, insurance remains a key factor in a nation’s development, considering the role it plays in the provision of capital, protection against financial losses, promotion of economic growth, and preservation of the economy.
Olusegun Omosehin, chairman of the Nigerian Insurers Association (NIA), in his keynote remarks, said enforcement of insurance policies made mandatory by law for individuals and business organisations will encourage and protect investors, as well as ensure sustained economic growth.
Omsehin, who is also the MD/CEO of Old Mutual Nigeria Life, said regulatory authorities should put in place policies to enforce transparent and efficient management of funds by insurers, while the industry operators need to constantly work hand in hand to ensure a healthy mutual beneficial self-regulation.
He said over the past five years, the Nigerian insurance industry has experienced notable growth, positioning itself in a healthier state than in 2017, as total assets rose by 20 percent to reach N2.7 trillion in the second quarter of 2023 from N1.1 trillion in 2017.
“As of December 2022, the Gross Premium Income of the industry was N726 billion, a growth of 15.1 percent year-on-year, reflecting a remarkable performance compared to the real GDP growth of 3.1 percent over the same period,” he said.
He said that N255 billion gross claims were paid in 2022 across various risk categories, sectors, and economic segments, up from N224 billion in 2020, and these he noted provides financial security, which encourages both individuals and entities to pursue investment and entrepreneurial ventures.
“This ensures continuity of business ventures and risk-taking,” he said.
At a panel session themed ‘Economic Impact of Insurance’, Apampa Moruf, managing director/CEO of NSIA Insurance Limited noted that insurance is a crucial factor in enabling sectors to overcome obstacles hindering growth and productivity.
“Insurance is the right buffer for challenges on both the micro and macro levels,” Moruf said.
He highlighted the insurance’s ability to provide a safety net for challenges at both micro and macro levels.
“On the micro level, there are 17 million SMEs, most of whom are banked. Banks can provide cover for these SMEs, with insurance as the catalyst for economic growth,” he said.
Regarding technological advancements, Moruf emphasised the importance of adopting technology to enhance operational efficiency and access new markets profits.
Chibueze Johnson, chief risk officer at Unitrust Insurance Co. Ltd, said insurance drives economic growth, particularly when there is high penetration in terms of premiums, positively impacting GDP.
Johnson highlighted the role of insurance in de-risking small businesses and its positive impact on the economy.
He flagged the prevalent issue of underinsurance among Nigerians, which he said could leave individuals vulnerable in the event of a loss.
“A lot of people like to under-insure. In terms of rental claims, what you will get may not be able to bring you back to your previous status in a likely event of a loss if one is underinsured,” Johnson said.
Abimbola Tiamiyu, registrar/CEO of the Chartered Insurance Institute of Nigeria, while speaking during the second panel session themed ‘Sustainable Development Goals in Insurance’, emphasised the importance of selecting specific SDGs for company focus and prioritisation.
Regarding eradicating poverty, she proposed considering climate action beyond insurance and integrating it into the company’s operations. She queried what products could be developed to address these SDGs and associated issues.
“This necessitates establishing a dedicated research and development team to assess its impact on the organisation and the environment. These findings would facilitate tailored solutions rather than generic ones. Addressing data gaps involves leveraging global data and adapting it to local contexts,” Tiamiyu said.
Ademayowa Adeduro, managing director/CEO of Tangerine General Insurance, said insurance plays a pivotal role in achieving the Sustainable Development Goals (SDGs).
He added that with the 2030 SDGs deadline approaching, there is urgency in assessing our progress. “For instance, driving 15 million people out of poverty could significantly boost insurance revenues, highlighting the interplay between societal advancement and financial growth.”
He added that insurance exposes and manages associated risks, but the extent of public awareness and the effectiveness of these products in serving broader purposes beyond profits remain critical.
He said SDGs-related products of insurance include education policies, loss of employment policies and agaric insurance products.
Rashedat Adebisi, chief client officer of AXA Mansard Insurance, said insurance is adding a lot of value without it being mentioned because people don’t see insurance in action.
“If they see insurance in action. they will tend to buy in. There is still a need for awareness to ensure that people know how we add value. Looking at all economic situations, there is a need to work with the government and other stakeholders.”
Gboyega Olanbiwoninu, chairman of Insurance Group of the Lagos Chamber of Commerce and Industry, said insurance companies pay a lot of claims, adding that insurance companies helped a lot of businesses to bounce back after the #EndSARS protest.
“During EndSARS, there was seamless economic recovery because of insurance; so there’s a need for more awareness. The more important one is government enforcement. All over the globe, what you see is that government involvement is right up there, and it’s limiting Nigeria’s growth,” he said during the third panel session themed ‘Risk Management and Business Stability for National Development and Risk Mitigation’,
“Once the government is not in the driver’s seat, we may not be able to achieve the desired results.”
Jimalex Orjiako, divisional director at Consolidated Hallmark Insurance, said: “I sell peace of mind, not insurance. Our problem is not that people aren’t aware, but they are aware of it in the negative. People need to understand that you get what you pay for. There is this Nigerian mentality of doing less to get more.
“It is not sufficient that when something happens, people rally round and give you money. That money can actually be used for investment but that culture keeps us all in a circle.
“To encourage more people to come into insurance, a practitioner should not look for a reason not to pay claims; instead, he should look for reasons to pay claims.”
