Chuks Udo Okonta
The inability of the insurance industry to provide long term fund for the public to acquire properties, contributes to the poor developement of the mortgage sector, Managing Director Riskguard-Africa Nigeria Limited Yemi Soladoye, has said.
He told Inspen that mortgage sector cannot develop without a well developed insurance market, because it is only in insurance that the public can get funds of long term gestation, adding that once long term funds are unavailable, there can't be mortgage.
He noted that insurance industry has a weakness in understanding the competing collaborating influence of insurance and other financial services operators.
He said: "Mortgage cannot develop without a well developed insurance market, because it is only in insurance that you can get funds of long term gestation and once you don’t have that, you don’t have mortgage.
"We have houses all over Lagos and other cities, but nobody is buying them or renting them because the insurance aspect of it is lacking. The mortgage sector has not seen the need or the importance of insurance in its activities, the insurance people instead of seeing the banking sector as collaborators, five years and below they saw bankers has competitors. whereas we can get a lot from bank assurance which is a collaboration between insurance and banking sector."
He expressed misgivings over the choice by insurers to adopt or restrict themselves to the traditional distribution, neglecting all available collaborative opportunities that would have enhance the industry's profitability.
He said the industry's supply channel is presently insufficient, stressing that the insufficient supply channel is also very weak in depth and breadth.
"The supply we had was only to the government sector. All other areas were not really expanding. The moment Shoprite was coming to Nigeria, insurers must have been ready to collaborate with it. Megaplaza and many of such are there, but no collaboration was made with them," he added.
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