By Ebere Nwoji
Economists, financial analysts and investors in the insurance sector, have berated the sector regulator, the National Insurance Commission (NAICOM) for what they described asÂ its inability to put up policies and programmes that will boost the growth of the sector.
The analysts, who expressedÂ worriesÂ over the sectorâ€™s stagnated growth, noted that whileÂ growth in various sectors of the economy, are in tandem with population rise across African region, the insurance sectorâ€™s growth across the region, falls below that ofÂ population growth in most countries in the region.
They pointed out that the growth in the insurance sector, does not match that of Nigeriaâ€™s huge population.
The analysts, who spoke at the 10th anniversary lecture organised by Consolidated Hall Mark Insurance in Lagos, thereafter brainstormed on what to do to raise the share of insurance market and diversify the Nigerian market in particular from its present dependence on corporate clients to retail market.
According to the experts, Nigerian insurers and the regulatorÂ shouldÂ seek ways to make people demand for their products.
They noted that insurance is much more developed in the western world, than in developing countries such as Nigeria, in particular, when placed side by side with other countries that have much lower population.
Benchmarking Nigerian insurance sector with her neighbors in terms of contribution to the Gross Domestic Product ( GDP), the analysts observed that in terms of penetration, a country such as Indonesia records 1.4 per cent insurance penetration while Russia records 3.5 per cent. Also, India records 3.3 per cent, South Africa 14.4 percent whereas Nigeria has 0.4 per cent penetration.
Against this backdrop, an Executive Director at AMCON, one of the discussants at the lecture, Mr. Kola Ayeye saidÂ that the insurance industry in Nigeria needs serious intervention by the regulator to bringÂ about total restructuring in the system.
According to him, the banking sector, ten years back was in similar fragmented state the insurance industry is now, until the regulator saw the need for intervention that stablised the industry and reduced the number of banks in the country from 89 to 21Â strong banks.
He said the insurance sector, needs similar intervention which can only come through action of the regulator.
According to him, the huge opportunities in the insurance sector can only be harnessed when the regulator intervenes in the present state of the sector.
“The insurance sector should ask this question; are there fundamental things to be done to benefit from the existing opportunities in the industry. If the necessary intervention is effected; the industry will cease to be fragmented, it will be much bigger, much functional and effective”,Â he stated.