AIICO Insurance Laments Low Insurance Penetration in Nigeria

Ebere Nwoji

AIICO Insurance Plc has lamented low insurance penetration in the country, advocating increased digital sales of insurance products and services to close the huge gap.

According to the company, Nigeria with over 200 million people has insurance penetration rate of 0.5 percent.

Speaking at the annual training for members of Nigerian Association of Insurance and Pension Editors (NAIPE) by AIICO Insurance in Lagos, AIICO stated that the major mechanism in closing low penetration gap was digital sales of insurance products.

The Chief Digital & Innovation Officer (CDIO) of AIICO Insurance, Mr Olusanjo Shodimu while speaking at the training, noted that   insurance should be sold through channels that were ubiquitous and accessible to prospects.

Shodimu said: “Nigeria, which is the largest African economy with a GDP of 440 billion USD (2021) and the most populous African country with over 200 million people only has insurance penetration rate of 0.5 per cent.

“The major mechanism in closing this gap is digital sales of insurance products. Insurance should be sold through channels that are ubiquitous and accessible to prospects. The adult population is either on social media or surfing the web and they use their mobile phones to perform these activities.”

He listed challenges affecting insurance distribution to include trust, stating that people did not believe in insurance and the need for it except for the statutory ones imposed by the government.

Another challenge according to him is awareness due to lack of understanding and appreciation of the importance/benefits of insurance. 

He said accessibility was also a challenge adding that the requirements for obtaining insurance policies were too many and challenging.

Another challenge, he stated, was complexity adding that insurance policies could  be complex, with legal jargon and intricate terms and conditions. This complexity he said could deter potential customers from purchasing insurance.