Low disposable income has been identified as major reason for lack of insurance adoption in Nigeria.
A survey outcome from the Enhancing Financial Innovation and Access (EFInA) 2020, on Access to Financial Services in Nigeria, further blamed ignorance of the benefits of insurance, priority consideration and lack of target-oriented products and services to suit their specific needs as why the figure is soaring.
The report showed that only 2 per cent of adult Nigerians are insured and have any form of insurance, while 18 million are outside insurance cover.
EFInA’s data which put Nigeria’s adult population at 106 million (18 years and above), disclosed that 103 million are outside the insurance adoption as only 2 per cent or 2 million adults were insured as of 2020. “Only 2 per cent of Nigerian adults are insured, but 18 million uninsured adults say they would be interested in microinsurance.
Out of the 40 per cent insurance inclusion target set by the Central Bank of Nigeria (CBN) for 2020, only 2 per cent was achieved as the target fell short by 38 per cent,” Ashley Immanuel, CEO of EFInA, said.
The survey showed that access to basic financial services like a savings account, credit and insurance means that a country is financially included.
It said that Nigeria recorded a 64.1 per cent financial inclusion rate in 2020, representing a 35.9 per cent or 38.1 million adults, an increase from the 36.6 million in 2018 that were excluded.
“A higher exclusion rate in Nigeria could lead to a poorer population as lack of access to credit and insurance puts them at an economic disadvantage.”
Good news about the survey is that the 18 million uninsured have shown interest in microinsurance which presents more opportunities for micro underwriters to expand their customer base and generally boost insurance penetration level in the country.