Some experts criticized the low penetration rate of insurance in the country and called on industry stakeholders to adapt products to different regions to increase their protection.
They spoke at a symposium organized by UNILAG Actuarial Science and Insurance class of ’89 to honor Prof. Kunle Aduloju in Lagos with the theme, ‘Developing insurance and financial inclusion: Developing insurance products for the informal sector’.
When presenting material on this theme, Dr Biodun Adedipe from B. Adedipe Associates Consult Ltd said, there was already a ready market for insurance players and they only needed to develop products suitable for the identified risks.
He said, “We saw a 40 percent shift (in 2020) and we’ve only done three percent in three years. It shows that the insurance penetration gap in Nigeria is still very large. When viewed from the other side, the country with the highest insurance penetration in the world is Thailand by 15 percent.
“South Africa is a leader in Africa. When you look at these countries and put them next to Nigeria, obviously, we still have a long way to go. One way to quickly bridge that gap is to take out insurance for two groups of people; the low-income group at the bottom of the pyramid and what is now universally referred to as the emerging middle-income group who have never participated in insurance before.”
He added, “There is a lot of work for insurance companies to do in developing a product that fits that market segment on one hand and that means you look at the needs geographically.”
Head of Actuarial Science and Insurance Department, Prof. Hamadu Dallah, regretted the inability of academics over the years to identify the factors causing low insurance penetration in Nigeria.
Aduloju, also told insurance companies that they need to increase production development by region.
He said, “Insurance penetration is below one percent. There are many contributing factors, there are financial literacy, low literacy levels, low level of awareness and then simplicity of insurance policies. We have to prepare it in such a way that they (potential customers) understand that they need it.”
Chairperson of the event, Mrs Yetunde Ilori, a university alumnus and director general of the Nigerian Insurers Association, said Nigeria’s insurance industry could increase its growth threshold by placing a premium on increasing the development of financial inclusion products that could meet the wishes of insurance consumers.