Babington-Ashaye Urges Insurers to Leverage Market Opportunities for Growth

Ebere Nwoji

A former President of the Chartered Insurance Institute of Nigeria (CIIN) and Managing Director, Risk Analyst Insurance Brokers, Funmi Babington -Ashaye, has charged insurance operators to leverage on opportunities in emerging markets to improve their fortunes and enhance the industry’s growth.

Babington-Ashaye, made the call while speaking on “Emerging Markets and Opportunities in the Insurance Industry,” at the 2021 Mid-year Workshop organised by the Lagos Area Committee of the Nigerian Council of Registered Insurance Brokers (NCRIB).

Ashaye, who delivered her presentation virtually defined emerging market as a market that has some characteristics of a developed market, but does not fully meet its standards.

According to her, an emerging market economy is considered to be progressing towards becoming a developed market.

She said emerging markets comprise of developing nations which are becoming more engaged with markets as they grow; transiting from low per capita income, but with insignificant industrial activities towards a modern and industrial economy.

According to her, in such markets, insurers capitalise on increased wealth in the middle class, a low rate of penetration of insurance products and services, and even government support to introduce insurance products to people in rural areas.

She expressed optimism that the current growth momentum is expected to continue as more distribution channels are being explored with increased use of information technology tools for back-end operations as well as for sales services to reach out to the customers.

Ashaye, called on the underwriters and brokers to take advantage of emerging markets opportunities by focusing on key drivers such as financial services, customer segmentation, consumer needs, technology, business models, and transformational changes.

“A few are making the transformational changes needed to drive demand for their products and services. As brokers and insurers, the need for us to focus on technology, reviewing our business models and making transformational changes cannot be over-emphasised,” she said.

She identified key growth drivers in emerging markets as financial inclusion and affordability, financial product, under-penetration, operational efficiency through technology and consumer trust, noting that many emerging markets countries have taken significant steps in recent years to increase financial inclusion.

“Politically commitment towards financial inclusion (and insurance in particular) will remain high for many emerging markets with governments creating more opportunities through policy initiatives.

“Affordability is also critical to insurance market growth and this is a serious problem in Nigeria especially with the rate of inflation and insecurity in Nigeria which have impaired the purchasing power of the people.

“Millions of people are uninsured or underinsured against death or serious illness resulting in protection gap and this is particularly sizeable in life insurance.

“Huge ‘protection gap’ exists in relation to private health insurance where out-of-pocket-expenditure in emerging markets as a percentage of total health, expenditure is a multiple of world averages.

“Detailed estimates of these gaps have consistently risen overtime and are often now regarded as underestimations,” she explained.

Earlier in her address, the President of NCRIB, Mrs. Bola Onigbogi, described brokers as strategic stakeholders in the insurance value chain.

She said the council was making great strides in its activities.