The insurance sector is an expanding economic sector in Nigeria.
One of the most durable and rapidly expanding economic sectors in Nigeria is the insurance sector. The industry has made significant contributions to the real GDP sustainability of the economy as well as offering relief (mainly) to policyholders who were the victims of various unlucky accidents. When other economic sectors began to falter, the sector stood up to previous downturns in the economy and the consequences of the global COVID-19 pandemic. The market also demonstrated its unstoppable ability to retain clients, which is an indication of solid financial stability and load capacity.
For those involved in the industry, 2022 stood out as a year of mixed fortunes, marked by glaringly negative economic indicators such as: a national debt burden of over N42 trillion with its ballooning debt servicing, low productivity, 60% youth unemployment and underemployment, an epileptic power sector, hyper-inflation and exchange rate fluctuations, decaying infrastructure, unprecedented corruption and insurgency, approximately 133 million Nigerians living in extreme poverty, and other unpleasant things. According to a breakdown of the information obtained by National Economy from the National Insurance Commission (NAICOM), the insurance industry generated N514.6 billion in gross premium income (GPI) in 2020 and N616.6 billion in the 2021 fiscal year (a 20% increase).
Economy shouldn’t sink before it hands over to the next administration.
The sector generated N532.7 billion GPI in the third quarter of 2022, an increase of roughly 15% Year on Year (YoY) from the second quarter, according to NAICOM’s quarterly report, while observers wait for the industry’s overall GPI for 2022. With this, NAICOM has voiced hope for 2023, stating that the industry is expanding and that this expansion must be sustained to create a robust insurance sector that is able to increase its contribution to the country’s GDP. However, all players must adhere to laws exactly.
As 2023 approaches, stakeholders in the sector have pleaded with the Buhari-led administration to prevent the economy from slipping into an irreversible coma before it is handed over to the following administration in the second quarter of the year. Speaking with Basil Olusegun Bankole of Sovereign Trust Insurance, the DGM for Corporate Communications & Investor Relations, he praised NAICOM for its recent upward review of third Party motor insurance and pleaded with the regulator to guarantee strong policy enforcement.
Issuing policies and directives without a good force would harm efforts.
It would not only jeopardize the efforts but also give everything a childish appearance, in his opinion, to issue policies, regulations, and directives without a corresponding force of enforcement. How well has enforcement gone so far? The new third Party motor insurance to N15,000 and the 5% refund is a step in the right direction. Implementation has always been a difficulty. The DGM also demanded that the Professional Health Indemnity insurance Coverage be critically examined because it has been noted that many hospitals, physicians, and other healthcare providers do not take it seriously.
Bankole suggested that any contractor seeking a contract from the public or private sector should be required to produce the majority of mandatory insurance products, such as those under the Market Development Restructuring Initiative (MDRI), which includes third party, professional health indemnity, and others. He urged the federal government to make sure that all of its Ministries, Departments and Agencies (MDAs) obtain insurance as and when required, both for their physical properties and for their lives as they are supposed to do, noting that the time of creating extraordinary budgets when unlucky events occur should have passed.
Vital for insurance companies to collaborate with the Police Force.
Heirs Insurance placed a high premium on working constructively with all market participants to ensure customer satisfaction. One example is coordinating with banks to access “BVN” data while onboarding insurance customers, among other things. In an interview with Mr. Wasiu Amao of Heirs Life Insurance, he stated that it was crucial for insurance firms to work with the Nigerian Police Force to establish a data bank for the issue and storage of police reports on traffic cases and other accidental deaths across the country.
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