By Ebere Nwoji
With total gross premium of N315 billion as at third quarter of 2018, which is below the targeted N1 trillion premium, the insurance industry is said to have underperformed in the outgoing year.
The abysmal performance was accompanied by increased claims which rose by 30 per cent, from N110 billion in 2017, to N143 billion.
Owing to this backdrop, key industry operators have challenged the National Insurance Commission (NAICOM) to raise its regulatory powers against errant operators and fish out those whose activities have continued to erode trust and confidence in the sector.
NAICOM was also advised to employ the “name and shame,” strategy against operators who often shirk payment of genuine claims to build public confidence in the sector and promote financial inclusion.
The experts said this at the maiden insurance workshop organised by the National Association of Insurance and Pension Correspondents (NAIPCO), held in Lagos.
Chairman Nigeria Insurers Association (NIA), Mr Tope Smart, who is also Managing Director NEM Insurance Plc, noted that in buying insurance, people are buying promise, saying promise must be kept always.
Smart said this was why the NIA, which is the umbrella body of insurance underwriters is currently putting structures in place to build confidence among Nigerians.
Also, the President Chartered Insurance Institute of Nigeria (CIIN) and Managing Director Consolidated Hallmark Insurance Plc, Mr Eddie Efekoha, noted that industry operators, have traded to their limit as far as corporate business was concerned insisting that what they needed was to develop the retail segment of insurance business,
“As an industry, we have traded to the limit, as far as corporate insurance is concerned, all corporate bodies are buying insurance but there is hard nut at the ray base which is retail.
“Nobody will dispute that progress has not been made in this direction and insurers’ presence has not been felt at the micro or retail level.
“People have been licenced to trade in all areas but have not done a lot . The missing link is build up to the publicity,” he noted.
He urged insurers to sit up to the task of building confidence in their operations through robust capital.
According to him, in the insurance market today, the consumers are detecting capital for operators adding that some of them have said that N9 billion is the minimum capital adequate for the industry.
He urged operators to ensure that they shore up their capital, noting that insurance buyers especially multinationals and large corporates have some categories of businesses that select underwriters through capital base.
Earlier in his keynote address, the Commissioner for Insurance, Alhaji Mohammed Kari, represented by the Deputy Commissioner for Insurance Technical, Sunday Thomas, noted that it had become a common saying that insurance is underperforming in Nigeria, with dismal percentages and unflattering comparisons trotted out to reinforce this position.
He said while one may not disagree that the industry was performing less than optimal potential, the insurance industry has not been static.
“All our indices have grown steadily though at a slow pace over the past few years.
“The gross premium as at the third quarter was N315 billion, a 22 per cent increase over the N258 billion for 2017 in the same period. The Gross claim figure for third quarter 2018 was N143 billion, a 30 per cent increase over the N110 billion reported for the same period in 2017.
“We anticipate the final figures for 2018 to be significant indeed”, he stated.
According to Kari, the outlook may not be as rosy “as we all would have liked, but NAICOM sees the silver lining and is fully committed to making the most of it.”
“We have set for ourselves a clear, unambiguous task: to improve the aggregate numbers by enabling individual operators to optimally serve a much larger customer pool with a more varied basket of products.
“The end game for us is to increase the insurance uptake ratio among the Nigerian populace and we have a number of initiatives in place towards achieving this”.
He said financial inclusion was one of the tools NAICOM envisaged to help improve market penetration.
He said the initiative was premised on the fact that getting the mass of the financially excluded to embrace insurance would have a positive impact.
Accordingly, insurance companies were urged to have a buy-in into its micro-insurance initiatives.
He added that the Takaful market was still grossly under accessed by the public, noting that there was therefore the need for aggressive promotion in aid of financial inclusion.
“In addition, efforts are being made to expand the distribution channels for insurance products because the traditional channels are becoming too restrictive and sub-optimal.
“Whereas Bancassurance has received the most attention, there are other initiatives to reach out to the public,” Kari stated.