Nigeria’s Insurance Sector Targets 40 Million Financially Excluded  Rural Adults

 

Yemisi Izuora 

The Nigerian insurance industry is developing strategies to accommodate about 40.1 million adult population in the rural areas that are excluded from any form of financial services.

The Commissioner for insurance, Mohammed Kari who gave the indication, at Nigeria Council of Registered Insurance Brokers, NCRIB forum, said that 

statistics reports, that the Nigerian adult population which consists of people from 18 years and above is 96.4 million, out of which 59.6 million are living in the rural areas. 

Among this rural populace, 40.1 million are excluded from any form of financial services, he said adding that the Nigerian formal sector provides income to only 7.9 million adults, representing 4.2 per cent whereas 41.6 per cent are excluded from financial services, including insurance. 

This he observed offers a huge opportunity for “the future broker” to provide desirable services to close these existing gaps and enhance the general performance of the industry. 

He said that in the past five years, the Gross Written Premium of the industry has hovered between N300bn – N320 billion an implication that the figures are not growing in the same proportion if the enormous potential at the disposal of the sector is to be used as benchmark.

Nigeria, according to the 2017 world population records, is designated as the seventh most populous country in the world accounting for 2.6 per cent of the world population; this translates into Nigeria being the world’s most populous black nation. Again, Nigeria is the 21st largest economy of the world in Gross Domestic Product (GDP) terms and the largest economy in Africa. 

Kari said that a cursory overview on the access to financial services in Nigeria indicates that there is a huge deficit in terms of financial inclusion to which insurance is a veritable part. 

He said that statistical analysis indicates that Nigeria requires aggressive and strategic developmental efforts towards reaping the benefits of her abundant potentials, and this has become an imperative rather than an option if ordinary Nigerians who have no access to financial services must be brought to the fold.  

“For us at the National Insurance Commission (NAICOM), let me re-emphasize our commitment towards driving the Nigeria insurance industry to greater heights by providing strategic and far reaching regulatory frameworks and market development initiatives in accordance with extant laws and best practices.  

The Commission specifically introduced Microinsurance, including Takaful  products in the Country as an attempt to address the identified existing gaps to aid penetration and as well as reach the segment of the market that was either hitherto unreached or not comfortable with the conventional insurance products. 

The decision to create additional channels for insurance distribution is also in this light. We are equally optimistic that the expanded distribution channels will in no distant time aid the penetration of insurance in Nigeria and subsequently lead to a substantial leap in the contribution of insurance to the nation’s Gross Domestic Product (GDP)”, he said.

Kari further states that with the recent climatic changes and the menace of floods, storms and outbreak of diseases to the country’s Agricultural produce and livestock, NAICOM is poised to improve its regulatory and supervisory framework to cater for Index Based Agricultural Insurance (IBAI) Products., saying, “We believe these are other areas where “the future insurance broker” could also take advantage”.

He said that beyond creating the enabling legal and regulatory environment for insurance business to thrive in the economy, the prospects and sustainability of the industry heavily depends on the ability of operators to develop the right products that suit the needs of the identified market, efficiently and effectively distribute their products to the various target markets, create adequate awareness to realize delivery of services and meeting expectations of the target customers. 

“For the “Future Broker” in particular, it is imperative to note that the prospects for achieving your important objectives will be more than ever before, enhanced by technology and harmonization of global best practices. To continue to remain relevant in the insurance value-chain in Nigeria, the “Future Broker” must be prepared to change its old toga for a new one that is innovative and technology driven. You must evolve new ways of accessing prospective insurance consumers while at the same time keeping and maintaining existing consumers, ensuring their protection and satisfaction. This is a proven way to guarantee repeat businesses.

Against this background, I urge you to exploit the opportunities provided by this forum to get the necessary strategy for efficient and effective service delivery that shall herald the next level of business opportunities for the “Future Broker”. 

I once again congratulate the leadership of the NCRIB for its initiatives and commitments towards entrenching a solid foundation for not only the insurance broking segment of the industry to thrive but the entire insurance sector of the Nigerian economy.  The Commission indeed, strongly believes that it is high time the various players collectively explored the untapped potential of the Nigerian insurance industry for a better economy”, the Commissioner concluded.

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