Experts who converged at the 2023 edition of the Insurance Stakeholders’ Consultative Forum, themed, “Rethinking Insurance as a Critical Economic Growth Strategy” organised by the Lagos Chamber of Commerce and Industry (LCCI) have urged the government, businesses and individuals to embrace insurance as a hedge against risk.

They also said the major challenges of the sector could be attributed to poor knowledge of the advantages of accepting insurance products to mitigate risks.

They were concerned that only 5,000 public buildings have so far been insured across the country, which is very insignificant compared to several public buildings in the country.

Speaking at the Forum, the President of LCCI, Dr Michael Olawale-Cole, said the Nigerian insurance industry, despite its huge potential, is still at its infancy stage and far behind its African peers, judging by key growth indicators.

He said that the insurance industry plays a substantial role in the Nigerian economy through several transmission points, including mobilising domestic savings, facilitating the conversion of accumulated capital into productive investments, minimising risks, fostering financial stability and stimulating trade.

He complained that the huge expansion seen in the financial services sector over the last decade has not been replicated in the insurance industry.
Citing the global insurance market report, Olawale-Cole, said the insurance penetration rate in Nigeria is 0.5 per cent while that of South Africa 12.2 per cent.

Kenya is 2.9 per cent while Ghana with 1.2 per cent, he said, making Nigeria one of the least countries in Africa with the lowest insurance penetration.

“Without doubt, the insurance sector has a potential for development due to various alterations in the regulatory framework, necessitating future modifications in the operational practices,” he said.

He said the future of the sector hinges on the extent and speed of digital transformation since it has the potential to enable the industry participants to secure a significant market share.

The Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Sunday Thomas, stressed the need to educate the public on the need for insurance.

Thomas, who attributed the need for insurance to the development of the economy, said the sector is very important for the government, businesses, the economy and individuals.

“When you are talking about preserving existing assets, insurance comes to the fore; on the relationship with the outer world and sustaining confidence in foreign direct investment (FDI), it comes to the limelight. It has become important that without insurance, planning cannot be sustained,” he said.

Speaking also at the programme, the Chairman of the Insurance Group of the LCCI, Gboyega Olanbiwoninu, urged insurance operators to rethink, re-engineer and remodel the way insurance products are marketed to Nigerians.