Chiamaka Ajeamo, [email protected]
The year 2020 has continued to attract several expectations from stakeholders in every sector of the economy.
In the insurance sub-sector, the story is not different.
Already, operators are enthusiastic that the year will herald much potential for the market as they tagged the year, a year of business portfolio expansion.
Operators hinged their optimisms on two reasons; the ongoing recapitalisation which will certainly provide their companies with financial strength to perform better and retain businesses previously that they were unfit to due to low capital base and the early passage of the budget for the year.
Also, with the industry regulator’s decision to extend the recapitalisation deadline from June 2020 to December 31, 2020, insurers are positive they will fully recapitalise before the deadline.
Some of the experts and major stakeholders in the industry who spoke with Daily Sun chronicled their expectations for the industry in the new year while also beaming search lights on major issues that need to be addressed.
According to the Executive Director, Technical and Operations, Law Union and Rock Insurance Plc, Mr. Supo Sogelola, the insurance industry is expanding than it shrinking this year.
Sogelola noted that players in the industry will reduce but businesses will grow because people will start exploring blue ocean areas of businesses rather than waiting for broking businesses all through as they always do.
“Until the recapitalisation was extended, we saw the exercise as defining which organization will still be in business and the one that will be out. The initial thought was that there was going to be shrinking in the industry but now that it has been extended, I know that many firms will still be in operations but by mid year, it will be clear which companies are in and which will be out.”
Notwithstanding, experts and stakeholders in the insurance sector, have affirmed that more solid work needs to be done by both operators and regulator of the industry so as to move forward this 2020.
These experts are of the view that there are crucial measures that need to be taken by the federal government and operators for the industry to make giant strides and contribute meaningfully to the Gross Domestic Product (GDP).
In an interview with Daily Sun, Mr Ekerete Gam-Ikon, an Insurance Expert, said that there are three critical actions that the government needs to take urgently not only to save the insurance industry in Nigeria but also enable it contribute meaningfully to its broad economic agenda.
Gam-Ikon, posited that the government should revisit the insurance content of the Financial System Strategy ( FSS) 2020 Agenda to enable it contribute meaningfully to the economy by raising the bar from its 0.3 per cent contribution to the GDP.
He said, “Our insurance sub-sector is highly fragmented and needs to be consolidated as you have in other climes. Health Insurance, Pensions and Property and Liability Insurance should be connected.
“Government should not perceive insurance on the basis of revenue generation rather it should be seen as the instrument for loss prevention and remedy to damages. This continues to be the concern of both foreign and local investors as they always require a strong insurance sub-sector to justify their investments.”
He added that the federal government should announce leaders in substantive capacity into the National Insurance Commission (NAICOM) with a single mandate to restructure and reposition it as the protector of our national wealth and the several risks exposed to Nigerians should be their focus working with insurance companies.
“Setting up a Presidential Committee to review the state of the insurance sub-sector and determine why its contribution to the GDP has remained at 0.3% despite the growth of the economy.
“Demand the Presidential Committee to develop a new strategic plan based on a digital agenda that will democratize insurance and make it available for the active low income earners,” he said.
On his part, the former President, Chartered Institute of Bankers of Nigeria (CIBN), Professor, Segun Ajibola, said that education on insurance is abysmally low in Nigeria thus, there is urgent need for the government to set up machineries for mass education on the various classes of insurance.
He added that next to education should be enforcement of insurance laws in the country while NAICOM as the regulator should do more in instilling ethics and professionalism in the industry as well as fast tracking more and encouraging more consolidations to make the sector tough.
He concluded by charging insurers exude much integrity in dealing with Nigerians this year.
He said, “All operators and stakeholders in the insurance sub-sector should do all within their power to promote the integrity of the business this year and beyond the decade because most people still see insurance as a form of extortion. Some see insurance companies as licensed robbers because they alleged they have never succeeded in making any claims from insurance.
“When obligations are honoured in sincere and seamless manner as we seen in advanced countries, people will on their own embrace insurance but when they pay premiums and cannot get their benefits when the need arises they will shun insurance. So, all operators should improve their integrity in business”.
Public Affairs Analyst and Public Relations Consultant, Mr. Ambrose Igboke, noting his hopes said that he expects the industry to capture more Nigerians into the insurance circle and this can be achieved when the sector shows more integrity.
He pointed out that one of the key areas’ insurers should focus on is housing issuance via mortatge.
“The sector needs to evolve a new strategy to sell the sector which currently enjoys high level of distrust among Nigerians. The success is when many Nigerians are captured in the insurance system. Our insurance companies, just like the banks, are too lazy; always waiting for easy money.
“Insurance companies should begin to invest in serious mortgage. A real mortgage should not have less than 15 years payback period. Whatever obstacles towards an implementation of proper mortgage should be sorted out.
“It is high time the insurance sector in Nigeria began to own banks just as it is obtainable in the West. What are Nigeria’s insurance companies doing with the huge deposits of premiums paid by their customers? Banks own insurance companies in Nigeria; this aberration is only peculiar to us,” Igboke voiced.
For Dr Uzoma Ofurum, former Manager, Marketing, Anchor Insurance, the insurance sector will make great success in 2020 when both the regulator and operators adopt the use of modern technology to provide end-to-end customers experience.
According to Ofurum, industry will thrive tremendously when compulsory insurance are enforced to the latter and this can be achieved by working with relevant arms of the government.
He advised operators to scale up on advertisement both in the traditional media and social media to enlighten Nigerians on the relevance of taking up insurance policies.
“The values insurance brings to our society need to be reinforced more through engagement that can only be achieved through advertisements, Public Relations and of course through words of mouths, as well as prompt claims settlement,” he said.