Insurance Penetration: Stakeholders Seek Government Pronouncements
Mr. Segun Bankole
The Deputy General Manager, Sales and Corporate Communications, Sovereign Trust Insurance Plc, Mr. Segun Bankole, has called on the government to make some pronouncements that will help the insurance industry in Nigeria to grow beyond what it is today.
In the same vein, the Chairman Emeritus, Independent Shareholders Association of Nigeria (ISAN), Chief Sunny Nwosu, advocated for a free market where players would be allowed to take decisions on their own volition without being restricted to certain things, thereby enhancing the growth of insurance industry in Nigeria.
The duo said these while speaking in a separate interview with The Revealer Online recently.
“There should be unified rates for insurance products. I have been in the industry for fourteen years and the insurance industry in Nigeria has not been able to grow its gross premium written to one trillion and I don’t think this is a very good development for the industry.
“One of those things that have not made it happened is the fact that there is so much cutting down of the rate of insurance products. Rates are coming down but claims is growing.
“Let Nigerian government make some pronouncements that will help insurance industry in Nigeria to grow beyond what it is today,” Mr. Bankole said.
According to Chief Nwosu, “What we want is for government to free the industry and people to take the decision on their own volitions instead of being restricted to certain things.
“For me, I have been advocating a private-sector driven economy and that is what I believe. I do not believe in government restrictions at all. It is a known fact that the Nigerian economy is one of the biggest economies in Africa. So definitely, am quite sure that a strong insurance industry will impact our economy and what is more important is just to ensure that people understand the benefits of the insurance sector thereby making the sector contribute significantly to the nation’s Gross Domestic Product (GDP).
“Presently, the percentage contribution of the insurance industry to the nation’s GDP is abysmally low, without any encouraging sign for improvement because we have so many classes of people that defraud the insurance sector.
“Take for instance, if you have what they called the Third Party Policy, which, of course, some people are selling at N7,500 and you can get it for N2,000 from others in the same industry whether fake or not but police allow those people to go showing such policies, then we have a long way to go to improve the economy.
It is the same thing that makes insurance stock to be so low in the capital market and is also affecting the growth of insurance companies. Insurance stock is the least priced stock in the Capital Market as low as 20 kobo. The penetration with respect to insurance, we have not been able to achieve what we are supposed to achieve in terms of raising the premium to one trillion many years.
The players are trying, they are all working very hard, they are spending a lot of money in educating the people on the importance of insurance and they need for them to embrace it as a risk mitigation mechanism. So, some of these things take time before it can materialize but I believe God helping us and all things being equal, we will get there. What we need is the understanding of all stakeholders to work as a team for the success of the industry.
