NIA Boss Bemoan Low Insurance Penetration
Stories by Ebere Nwoji
The recently elected Chairman of Nigeria Insurers Association(NIA), Mr. Tope Smart, has decried the low position of insurance industry among other sub-sectors in the Nigerian financial services sector.
Smart, who stated this at his recent investiture as chairman of NIA, vowed to raise the bar of the industry through a five-point agenda he outlined.
“The Nigerian insurance industry is a key component and an important member of the Nigerian financial services sector. Insurance, as we all know is the bedrock of any economy. In Nigeria, it is rather sad to note that not all have embraced this concept.
“This is why the penetration rate still remains about 0.5 per cent as against some other African countries such as Kenya and South Africa with penetration levels of 2.9 per cent and 14 per cent respectively,” he stated.
According to Smart, it is also notable that only one per cent of our population hold any form of insurance policy. The reason for lack of interest in insurance may be as a result of lack of knowledge about the benefits of insurance.
He said this is so despite the all important classes of insurance.
He highlighted importance of insurance to economic growth as offering protection to firms and organisations, promoting entrepreneurial attitude, encouraging investment innovation and vitality of the market, offering relief and by so doing reduces pressure on government among others.
He said despite the lingering apathy for insurance by the Nigerian populace, driven largely by ignorance, on one hand and cultural and religious beliefs on the other hand, the industry remains resilient.
He said in 2016, the industry’s gross premium income stood at N316billion as against N252billion premium income in 2012, an increase of 25 per cent.
According to him, the growth is significant in Life insurance segment particularly in annuities.
He said also, to be noted is that Nigerian insurance industry continues to record increased claims payment. In 2016, total claims paid by operators amounted to N113billion as against N73billion paid in , 2015.
He said despite the above achievements, as an industry, insurance is not where it supposed to be.
“Our image has been battered and more often than not, we have been made to play a second fiddle to some other professions. I say enough is enough, to this treatment. It is in the light of the above that I have adopted a theme – NIA First, Insurance First.
He said specifically, during his two-year tenure, his administration would be focusing on a five -point agenda, collectively referred to as 5Ps.
“These five points agenda will give the direction of my service to the association for the next two years by the grace of God,” he said.
He highlighted the agenda as protection of interest of member companies, proper positioning of the insurance industry, improving the standard of professionalism in the industry, putting in place a befitting edifice for NIA, as well as deepen insurance penetration in the country.
Smart, who is also the Group Managing Director, NEM Insurance Plc, noted the problem of low level of insurance penetration, particularly when compared with other markets in Africa and said it must be improved upon.
“Presently, for a population size of about 200 million, industry penetration is less than 0 .5 per cent. You will all agree with me that this is not good enough. We must collectively work together to increase the penetration level. In this regard, NIA will work with all arms of the industry such as brokers, CIIN and NAICOM to achieve this,” he insisted.