Insurance Penetration: Operators, Regulators, Government, Others Tasked On Collaboration
Mr Tunde Hassan-Odukale, MD/CEO, Leadway Assurance
Insurance operators, regulators, governments and other stakeholders have been urged to work together in the interest of all and the growth of the industry.
Speaking on the topic “Driving Insurance Penetration in Nigeria” at Leadway Assurance 2022 Journalism Training organized virtually for members of the National Association of Insurance and Pension Correspondents (NAIPCO) today, Mr. Joshua Ogbeifun, emphasized the need for insurance operators, regulators, intermediaries, government, and other stakeholders to work together to deepen insurance penetration.
Ogbeifun while explaining the meaning of insurance penetration, Nigeria’s penetration in comparison to other African and global markets, drivers of insurance penetration and the role of journalists in helping to drive the penetration, described partnership as one of the factors that would help in driving insurance penetration in Nigeria.
He said insurance penetration is the ratio of the value of insurance premium of a country in a particular year divided by the Gross Domestic Product (GDP) of that country, adding that it shows how the citizens of the country embrace insurance as a risk management tool.
According to him, a country with low insurance penetration shows that people of that country do not take insurance as a risk management tool, noting that lesser growth in the insurance industry also means lesser growth for the country because they will not be able to maximize the value of insurance as the backbone of the financial sector.
“From available data, insurance penetration is low in most of the African countries aside South Africa where we see high penetration, every other African country especially the West African countries are experiencing low penetration.
“Globally, reports showed that in 2020, insurance penetration to GDP was about 7.3 per cent. Insurance penetration is thriving in the United Kingdom with 11 per cent, the United States of America with 7 per cent and South Africa with about 13 per cent,” Ogbeigun stated.
He stated that what drives insurance penetration in these countries include population, financial literacy, regulators’ assistance, adding that in terms of economy, they have strong purchasing power with enough disposable income to buy insurance.
In Africa, according to Ogbeifun, insurance penetration in the Francophone (French-speaking) countries is 1.2 per cent, while the Anglophone African countries like Nigeria is 0.3 per cent.
“With insurance penetration in Nigeria at 0.3 per cent, it shows that we are lagging behind and something needs to be done collectively.
“Insurance penetration in South Africa is about 12.4 per cent, Kenya 2.83 per cent. What drive insurance penetration in South Africa is the Life segment of their business, unlike Nigeria whereby due to some factors around religious and cultural values, people don’t really take insurance seriously.
“Nigeria as a supposed giant of Africa, we should not be at 0.3 per cent. As a nation and as the insurance industry, as government, intermediaries even as players in the market and as stakeholders, we should think on how to drive insurance penetration for Nigeria,” Ogbeifun added.
Ogbeifun mentioned some of the external factors that drive insurance penetration to include the education level of the citizens, credit system, regulation and macro-economic conditions.
While advocating for simplification and personalizing insurance products and services to meet the yearnings of the insuring public, he charged the regulators to put an adequate regulatory framework in place.
Ogbeifun expressed worrisome that a situation where there are about 12 million cars on the road in Nigeria but only about 3 million have valid insurance policies is not the best for the industry and the nation at large.
Ogbeifun who called on the government to ensure changes in the nation’s macro-economic conditions to encourage job creation and increased employment also urged the government at all levels to provide adequate credit facility that promotes private business operation and entrepreneurship in order to empower the people financially.
What should be done internally to drive insurance penetration, according to him, is increasing access through digital and wider distribution, targeting unique customer segments and needs and leveraging the power of partnership.
Ogbeifun who enjoined insurers to work in collaboration with government, regulators and other stakeholders to help shape and reform policies, also emphasized the need for the players to demystify insurance.
For journalists as purveyors of information, he appealed to them to help with the education of the public on the value and benefits of insurance as well as engage the regulators, government, intermediaries and other stakeholders in the industry to play their roles well.
In his response, the Chairman of NAIPCO and Publisher, Inspen online, Mr. Chuks Udo Okonta, thanked the management of Leadway Assurance for the training which he said has helped NAIPCO members to be well informed on the happenings in the industry, just as he promised NAIPCO members commitment to the growth of Leadway Assurance and the nation’s insurance industry at large.
Mr. Okonta who used the occasion to call on other insurance companies to emulate what Leadway is doing noted that regular training and seminar for insurance and pension journalists will improve their knowledge of the industry and the workings of insurance as well as enriches the content of their reports.
Earlier in her opening remarks, the moderator of the webinar, Mrs. Aishat Belo-Garuba explained the morale behind Leadway Journalism Training for Insurance and Pension Journalists.
She said the training provides Leadway with a veritable platform to interact with journalists while intimating them on the activities of the company in particular and that of the industry generally.
Aishat who described NAIPCO members as ‘fantastic’ partners, also thanked them for making time to attend the training and appealed to them to use their various platforms and mediums to tell Leadway Assurance stories as well as spreading the news of the value and benefits of insurance and pension.
Other topics treated at the webinar include: Accessing Your Pension Funds taken by Mosumola-Moyo Balogun; Universal Health Coverage: Challenges and Recommendations by Dr. Temitope Falaiye and Understanding Wills and Trusteeship by Gbolahan Oluyemi.
