The Managing Director of NEM Insurance Plc, Mr. Tope Smart, has said that insurance industry operators, need to do a lot more on increasing the level of awareness of Nigerians on insurance as well as on building public confidence on the industry.
Smart, who stated this at a media briefing in Lagos said the awareness problem is so high in Nigeria that even the well educated citizens have no knowledge of what insurance can do for them.
He said: “We still need to do a lot more in terms of awareness. Awareness is not about illiteracy. People who are even literate including the professors still don’t know the benefit of insurance. So, we still have a lot to do in that area by trying to let people realise what they can derive from insurance. For instance, somebody who has spent about 5million to acquire a car will not want to pay 300, 000 naira or 200, 000 to buy insurance and protect his investment in that car. He will tell you he does not believe in that. He will rather get third party insurance which is the minimum requirement by the law.” According to him, because of this, insurance industry’s contribution to GDP has been very insignificant.
Smart however said the industry’s contribution to the GDP, seems so low because pension, which is part of insurance industry was taken away from the industry.
“If you look at other market globally, pension is part of the insurance industry and if you add what they are doing now, it would have added to the contribution of the insurance industry. So we would have done more and our contribution to the GDP would have been more significant,” he stated.
He said another problem of the industry is government’s attitude, pointing out that the government needs to believe in the industry and contribute to its development.
According to Smart, if you look at what obtains in other parts of the world where there are compulsory insurance and government creates an enabling environment where it ensures that people comply, they enforce the laws. He noted that in Nigeria, enforcement is the problem and without enforcement, premiums are lost to fake insurance.
“Don’t be surprised that a lot of people still carry fake insurance certificate of non-existing companies like Lion of Africa, victory, ACEN, vigilant insurance, etc. and it is because there is no enforcement and nobody bothers to look at that area. So, you will discover that a lot of money is being lost and until government comes in to actually enforce these laws, we will continue to lose money.’’
He cited example of group life insurance, saying that government has tried to an extent by saying that Nigerians must have group life certificate to do a lot of things Business wise.
He observed that currently, the government is enforcing this through PENCOM.
In the past two years, the chartered Insurance Institute of Nigeria(CIIN) has been distributing insurance text books to secondary school children in the country in order to create insurance awareness among them at their early life stage.
The 2015 Miss Insurance, Miss Adaeze Okeke said awareness creation on insurance especially micro insurance awareness among market men and women is her project during her tenure.
Okeke, who is a staff of Linkage Assurance Plc, explained that she chose to focus on insurance awareness creation and micro insurance promotion because many Nigerians are excluded from insurance service delivery mainly due to too much concentration of insurance marketing activities on urban areas.