‘Sanctions ll boost sales of compulsory insurance’

‘Sanctions ll boost sales of compulsory insurance’

Unless people are penalised for not acquiring compulsory insurances operators would continue to find it difficult to sell the products, former Chairman Nigerian Insurers Association and Managing Director LASACO Assurance Plc Olusola Ladipo-Ajayi, has said.

He told Inspen that until there is enforcement people would not readily buy insurance, adding that the industry’s Market Development and Restructuring Initiative (MDRI) have not gone as far as operators expected. He noted that this was because; there are teething problems such as the training of agents and others.

He said: “The problem with Nigeria is that we need law enforcement to sell insurance at this point in time given our level of development. Until there is enforcement people would not readily buy insurance. If you look at the Pension Act, as widely publicise as it is, how many Nigerians employers have taken the group life scheme apart from the federal government and a few states. How many states have enacted their Pension Act? The thing is a kind of social change and there is need for more enforcement.”

He noted that the only area of success that has been remarkable is where insurance companies work with enforcement agents in some states to enforce certain aspect of the law. He said it is worrisome that most Nigerians do not know that there is a law that expects them to insure their properties.

“We would not get there over night, MDRI is a very good initiative meant to deepen the industry. We have to train agents, keep them by paying allowance pending when they are able to produce. But one wonders how long we would be able to keep them.

“If it gets to a position when people are penalised for not providing the insurances they took for their losses, it would become easier for insurers to sell their products. Now, if you go to an average Nigerian and tell him to insure his house because there is law for such, he would ask you where does the law exist? Most Nigerians do not even know about the law.”

He noted that aside the failure of enforcement, operators’ attitude to business has contributed largely to the poor development of the industry.

“Insurance industry is its own worst enemy, because competition has driven down prices and the price has continued to go down into unprofitable level. So it is difficult to grow the industry. We are running ourselves below profitable level due to pressure in the competitive market that is why we cannot grow beyond what we are doing at present,” he said.