Why insurance penetration is low – Akah

From left: Deputy Director Authorisation and Policy National Insurance Commission (NAICOM), Akah Leo; Commissioner for Finance Edo State, John Enegbedion; President Chartered Insurance Institute of Nigeria (CIIN) Bola Temowo and Deputy Lady Isioma Chukwuma at the event.

Chuks Udo Okonta

The Deputy Director Authorization and Policy National Insurance Commission (NAICOM) Akah

Leo, has identified some reasons why insurance penetration in the country has remained low, in spite efforts by stakeholders over the years to grow the sector.

Akah told Inspen on the sideline of the just concluded Annual Education Seminar organised by the Chartered Insurance Institute of Nigeria (CIIN), that one of the reasons for the poor penetration is that people do not trust insurance providers.

He noted that the industry is not growing as expected because communities often make use of informal forms of insurance rather than using the services of formalinsurers.

He also identified quality of service; cost of insurance product; poor claims settlement;

low awareness and poor enlightenment of the benefits of insurance and inadequate
access to insurance are setbacks.

He said in spite, there are 577 brokers currently operating in Nigeria, and controlling  about 70 per cent of total premium income generation, over 80 per cent of the them are based in South Western part of the country and they focus mainly on corporate end of the market.

Akah said for the industry to achieve the trillion Naira Premium Income target and increase its contribution into the nation’s Gross Domestic Product (GDP), the operators must be prepared to work with the regulator in utilising all opportunities created by the Commission and also comply with the guidelines issued by the Commission on Microinsurance and Takaful insurances.

He also called on NAICOM to issue new guidelines on selling insurance products through e-channels and through telecos; and urged the industry operators to support corporate agency.

He also asked insurance companies to move from selling insurance to marketing an essential financial product; intermediaries to become trusted financial advisors for the clients and trusted business associates for the insurance companies, adding that an integrated mix of the channels of distribution is highly recommended for the benefits of e-channels and traditional channels to be maximized.