Less than one per cent of Nigerians voluntarily subscribe to life insurance due to a general apathy for the business. The National Insurance Commission (NAICOM) and the Nigerian Insurers Association, (NIA) say that less than one per cent of Nigerians have taken life insurance cover.
The Director-General, NIA, Mr. Sunday Thomas, worried that Nigeria was among the least countries in terms of insurance contribution to the Gross Domestic Product at 0.72 per cent.“The country’s diagnostic study says less than one per cent of the adult population in Nigeria has access to a voluntary insurance policy,” he said.
The Nigerian insurance sector, he said, was grossly untapped because it had not yet appealed to the informal sector, which constitutes over 80 per cent of the population, adding that it would take deliberate efforts to win the confidence of this sector.“For the NIA, the obvious way forward is through closer interaction with this sector, intensive capacity building and greater expertise in micro insurance, providing unique micro insurance services, development of people-friendly products, and improved innovative distributive system,” he said.
He explained that micro insurance was targeted at the informal sector and the low-income earners. It was a veritable tool for mitigating losses from unexpected accidents and disasters, he said, adding that the low-income earners were invariably exposed to innumerable risks. According to him, micro insurance works on the phenomenon of risk transfer mechanism characterised by low premiums and low coverage limits. The director general of the NIA pointed out that NAICOM had set out the framework, road map, as well as market and regulatory directions for the operation of micro insurance in Nigeria.
The Commissioner for Insurance, Mr. Mohammed Kari, said government’s general attitude to insurance had to improve. “There is low patronage of insurance by government and its agencies and lack of effort to protect public assets. Even when it does, the funding is haphazard,” he noted. According to him, government’s commitment to replace damaged or lost assets has waned, therefore, insurance is the best alternative to having no protection at all.“Employees, especially our gallant members of the armed forces fighting insurgents, need to have the comfort of insurance protection as they carry out their duties,” he said.
Kari said there was lack of insurance expertise in the civil service. This, he noted, has made the government not to be properly guided internally as it ventured to deal with the industry. He said the position of insurance practitioners was virtually non-existent in the civil service’s scheme of service because the few insurance professionals in the service were not placed properly to play their role.
He said the sector has been yearning for a review of its laws in the country, adding that a bill had been drafted and submitted to the Ministry of Finance with the full involvement of all stakeholders. He, however, noted that almost five years later, nothing had been heard of the bill.
By Pita Ochai