A news analysis by Lucy Nwachukwu, News Agency of Nigeria (NAN)
Insurance plays an important role in the development of every nation’s economy.
This is mostly common especially in countries where the insurance market is allowed to thrive and is given all the support necessary to excel by government and people of that nation.
An efficient insurance market is essential to achieving integration into the global economy and sustainable economic growth of a nation.
The term insurance is not new to many Nigerians as they have insurance cover for life and their properties and they often have to get insurance cover on their vehicles before hitting the roads.
Nigeria has huge insurance potential with a population of over 180 million and well capitalised economy but in spite of these, the insurance industry remains largely untapped.
According to reports, there are many challenges facing the industry in Nigeria among which are product distribution and its channels, inadequate policies and poor implementation, poverty, the lack of trust , ignorance and other factors.
The government and regulators in Nigeria’s insurance industry have done a lot and are still making efforts towards increasing insurance penetration in the country though it is common knowledge that the level of insurance patronage is still abysmal.
This fact can be ascertained by the number of people in the country that have one form of insurance policy or the other, and the contribution of the sector to the country’s GDP, which is less than one per cent.
Many Nigerians are still ignorant of the benefits of insurance and this to a large extent has led to low penetration in the country.
A cross section of Nigerians in the Federal Capital Territory (FCT) told the
News Agency of Nigeria (NAN) that they never had any form of insurance policy.
While some of the FCT residents said they do not believe in insurance, others expressed skepticism over payment of claims by insurance companies, as others said their non-patronage was just by choice.
Mr Godwin Agule, a civil servant living in Abuja said he thought insurance cover was only for vehicle owners as he never knew of any other form of insurance policy.
Agule, who claimed to be a born again Christian, said “there is no need for me to get a life insurance as God is my protector and I shall not die except God permits it.”
Mr Sule Ibrahim, also a civil servant living in Abuja, expressed same view about insurance, saying “as a Muslim, I do not believe in any form of insurance, thus, I did not apply for any.”
Miss Grace Kamah, a business lady, decried what she described as “insincerity of most insurance companies in the country, especially on claims settlement.”
Kamah said many insurance companies were only out to collect premium from unsuspecting clients “but when it was time to pay claims, such companies would just disappear.”
She added that the unwilling attitude of the companies to pay claims when due discouraged people from taking up any form of insurance policies.
She however urged government and regulatory authourities to evolve measures to penalise companies that do not settle claims to clients when required.
However, an insurance expert, Mr Paul Ibe, said poverty and ignorance hindered insurance penetration in the country.
According to him, the prevalent level of poverty in the country makes people to prioritise their needs, hence striking insurance cover out of their list.
He said improved living conditions would make people to buy insurance policies because they would be interested in their prosperity.
Ibe, who explained that insurance was key to security of lives and propert, however emphasised that “people needed to be educated about its importance.
“There is need to sensitise people about the benefits of insurance cover to individuals and for the country’s economic growth.”
He stressed the need for synergy among operators and stakeholders in the insurance sector, noting that collaboration by insurance companies
would promote its growth.
Mr Mohammed Kari, The Commissioner for Insurance, National Insurance Commission (NAICOM), had earlier said that low insurance penetration continued to be an issue in the Nigerian Insurance Market.
He said that the commission had however embarked on several measures to help increase insurance penetration in the country.
Some of the measures taken by the regulatory body to foster insurance penetration in the country, he added, included the introduction of distribution channels, Takaful insurance, micro insurance, compulsory insurance and ensuring payment of claims by companies.
Kari said insurance supervisors the world over were charged with the responsibility of safeguarding policy holders and fostering supervisory framework that would contribute to public confidence in a competitive financial system.
He said, “NAICOM is guided by these responsibilities in all its actions butwe are alarmed by the incessant complains of failures of insurance companies to settle genuine and discharged claims to policy holders.
“This sad failure include the companies’ inability to settle inter-company balances which have risen to anunacceptable levels where we are now required to withdraw the self-regulation option given operators to total enforcement of the law.
“We have already received requests from claimants to apply the company’s statutory deposit to settled discharged claim as stated in law and the process has already commenced.
“And as punitive measure, we agreed to publicise any company whose deposit is so applied and coupled with that to have the Chief Executive of such company discharged.
“For intermediaries that hold back clients’ and companies’ money or collude to steal or corruptly operate such actions being criminal, would be forwarded to the appropriate law enforcement agencies.”
Kari added that the commission recently met with the EFCC and both agencies agreed to establish a joint task-force to among other things ensure corruption was weeded out of the insurance sector for good.
According to the commissioner, insurance growth forecast in recent times remains uncertain due to continuing global tensions and fragilities.
He said measures were taken to ensure stability in the sector, which would subsequently create an influx of foreign investment in the country, thus increase the sector’s contribution to the GDP.
**If used, please credit the writer as well as News Agency of Nigeria (NAN)