The Minister of Finance, Budget and Planning, Mrs. Zainab Ahmed, has challenged operators in the insurance sector to develop new innovative products based on data and customer preferences and introduction of new channels of distribution beyond the traditional channels to reach new segments of the market.
The Minister said this has become necessary as current Insurance Penetration, a measure of the contribution of Insurance to the Gross Domestic Product (GDP) of 0.88 for 2021 is very low.
This she observed indicates a low Insurance sector development contribution to the National Economy.
Speaking at the commissioning ceremony of a new developed Portal by the National Insurance Commission, NAICOM, in Abuja on Friday, Ahmed, observed however that there are abounding opportunities for growth in the market.
“There is also a need for cooperation with other agencies of government to enforce compulsory insurances in the country.
“Stakeholders in the industry must consciously and intentionally spread the reach of insurance from the major cities and few states to other regions of the country especially the rural areas. Low penetration in the retail end of the market must also be addressed through vigorous drive of inclusive Insurance like micro insurance and takaful.”
She said, “In addition, deliberate attention must be given to the low insurance literacy and education in the country. Strategies must be put in place for insurance education, awareness and enlightenment. Massive sensitization must be done on both traditional and new media on the benefits of Insurance. I want to advice that insurance education should be introduced in the education curriculum from Primary to Tertiary Schools.”
The Minister encouraged the industry to adopt new and disruptive technologies like mobile technology, cloud computing, Artificial intelligence, Blockchain, Data Analytics and Internet of things in driving and supporting its business.
“On this premise, I commend the Commission for being in the forefront of this and for incepting initiatives in this direction including Guidelines for Web Aggregators and Regulatory Sandbox, introduction of BIMA Lab Insurtech Accelerator Program. “However, I believe there is a need for Regulatory framework for Insurtech companies to guide and supervise their operation without inhibiting their innovation. The Commission should look into this.
“I believe with the commissioning of the NAICOM Portal today, the long overdue digital transformation of the insurance industry has begun with the attendant effect of increased penetration, reduction in the numbers of fake insurances, efficient service delivery and improving public trust in Insurance.”