With increased sensitisation on the benefits of insurance on the rise, there are strong indications that more people are now insuring their assets and lives, a development that is expected to increase insurance industry bottom-line.
The rise in insurance subscription, especially, life cover, could be connected to the increasing waves of insecurity, kidnapping and social vices in the country.
NATIONAL ECONOMY learnt that insurance premium growth in the last few years has been consistent with more private companies now procuring group life covers for their employees. Although, insurance penetration in states are not encouraging, the increased awareness by insurance industry regulator , underwriters and relevant stakeholders are gradually changing this dynamics.
In the last three years, the insurance industry recorded a gross premium income of N1.6trillion between 2019 and 2021 financial year, NATIONAL ECONOMY learnt.
In the 2021 financial year, however, about 56 registered life and non-life insurance companies posted a gross premium income of about N620billion.
This was a major growth when compared to N508 billion gross premium income the industry posted in the 2020 financial year, translating to N112billion increase within the period under review. It however recorded N471.8 billion Gross Premium income in 2019.
The industry has an ambitious target of meeting N1 trillion annual premium income target in the next few years, and experts believe this is a step forward in this regards
Experts expect the industry to grow faster in the next couple of years, owing to the realisation of the need to procure insurance.
The business growth projection is leveraged on several initiatives being carried out by insurance industry regulators and operators to deepen insurance penetration in the country.
For instance, insurance industry is planning life insurance packages that will be suitable and affordable for Nollywood practitioners in the country.
The entertainment industry has been notorious for crowdfunding for their ailing colleagues which is gradually bringing disrepute to the industry.
The president, Nigerian Council of Registered Insurance Brokers(NCRIB), Barrister Rotimi Edu, promised that, insurance industry, through the brokerage fraternity, will support the entertainment industry by coming up with products that will be suitable for practitioners.
“The broking fraternity shared in your concerns and we will come with products that will specifically address the need of the Nollywood practitioners. This, we will do, through partnership with stakeholders in entertainment industry to itemize what the industry really needs and carve products that will address these needs with the aid of insurance operators,” he pointed out.
This move followed calls by former president of Actors Guild of Nigeria(AGN), Mr. Segun Arinze, on behalf of the entertainment industry, on the needs to have special insurance packages that address challenges of the industry.
Before now, the practice in Nollywood has been to crowdfund for ailing actors and actresses which in most cases take longer time to realise, thereby, putting the life of the ailing practitioners at risks, and in some instance, the person might die before the full funding needed for treatment is realised.
To put an end to this, Arinze has, at different insurance fora advocated the insurance industry to come up with insurance products that will address, especially, the health challenges of Nollywood practitioners, promising that, such initiative would be supported by his colleagues.
With more Small and Medium Enterprises(SMEs) procuring insurance to secure their shops and lives respectively, following the realisation of the benefits of insurance, executive director, Technical, Coronation Life Assurance Ltd, Adebowale Adesona, urged entrepreneurs to see insurance as the only viable risk management tool.
For huge leap in the volume insurance business in the sector, country manager, Wordplay, Louis Alozie, had said Nigeria need to leverage on the experience of other markets that had developed successful SME insurance ecosystems where government coordinated policy and legislation in tandem with the insurance industry and large and small businesses.
While some of this involved compulsory insurance, he said, costs were minimal as it was so widespread, adding that, “embedded insurance, included in the price of products purchased, for example, provided a painless method to spread the use of insurance and address trust deficits.”
Vice president, Lagos Chamber of Commerce and Industry(LCCI), Gbenga Ismail,stated that, Nigeria had lost 2 million SMEs to the COVID-19 pandemic, adding that, most new SMEs struggled to achieve scale quickly enough to realise the opportunities for which they were created.
Despite 90 per cent of SMEs currently not paying tax, he said, SMEs represented a huge potential to drive economic inclusion, broaden prosperity and power the future growth of the Nigerian economy.
To this end, Ismail argued that it was critical to provide SMEs with the support to ensure survival in the first critical years, noting that. insurance represented a key financial cushion to manage shocks and build financial resilience in the first years of SME growth.
“With only 0.5 per cent of Nigerian SMEs insured, compare with 54 per cent globally, the country should focus squarely on developing an insurance environment more accommodating of and appealing to SMEs,” he advised.
However, insurance penetration across states of the federation left little to be desired.
The continuous neglect of group life insurance cover by governors in the 32 states of the federation has left about 1.1 million civil servants in the affected states with a bleak future.
Each of the 32 defaulting states, according to investigation, has an average 40,000 workers, and when multiplied by the 32 states evading group life cover, translates to 1.08 million workers whose future are not secured by their employers.
To this end, findings show that the families of any deceased civil servant in the 32 states are left to their own fate, as they are not entitled to death benefits claims meant to sustain the bereaved after the death of their loved ones.
This, experts said, must improve, to ensure that insurance business is profitable and ensure shareholders get good returns on investment.
