Insurance professionals have identified growth opportunities in the Nigerian insurance market and how the sector could impact on the overall economy if these opportunities are unlocked.
This they said range from favourable demography supported by emerging middle class, rising unban population as well as growing infrastructure , which are capable of leapfrogging the sectors growth where it can make meaningful contribution to the GDP.
The professionals who gathered in Abeokuta, Ogun State at the 2015 Insurance Professional Forum organised by Chartered Insurance Institute of Nigeria (CIIN) harped on the need to bring professionalism in every aspect of the industry operation to build consumer confidence.
Speaking on the theme “The Nigerian Business Environment: Implications for the Insurance Industry”, Isioma Chukwuma, president, CIIN said the drive to reposition the insurance industry and to reinforce the integrity of the profession can only be achieved by both individual and collective commitments to the ideals of ethical and professional best practices.
She said the CIIN is re-launching the Code of Ethics for insurance professionals and this is aimed at maintaining and developing professional competence and setting out the values that describe obligations as insurers.
On disciplinary procedures as contained in the Institute’s enabling Law, Chukwuma observed that this is to awaken members and encourage them to report cases of professional misconduct to the Institute.
“We must all play our roles to put an end to professional misconduct amongst members. This is the new direction for us as it is with all other professions.”
Wole Oshin, group managing director, Custodian & Allied plc speaking on “Opportunities and Returns in the Nigerian Business Environment” said the Nigeria’s insurance industry will remain largely driven by the country’s rich demography given the population of 170 million at an estimated growth rate of 2.54 percent per year, a median age of 17.9 years, rising urban population and emerging middle-class, as well as rising literacy level.
Oshin noted that the industry is sitting on the position of strength having witnessed regulatory dive that has improved confidence on the industry; improved industry performance, increased awareness of consumer protection initiatives; emergence of alternative distribution channels e.g. Telco’s, Car Shops, Travel Agencies etc. as well as presence of foreign players in the market.
Ganiyu Musa, group managing director, Cornerstone Insurance plc said Insurance penetration in Nigeria hovers around 0.5 percent in 2008 to 0.3 percent in 2014 (post rebasing); lower than the African average of 2.8 percent (2014). “These point to the potential for growth inherent in the industry with emphasis on the need for new penetration strategies to explore them”.
Musa speaking on the topic “Success Factors for Market Expansion and Penetration Strategies” said the industry have the capacity to generate N1 trillion in three years supported by EFInA (2014) report that says 14.3 million adult population in Nigeria would like to have insurance products.
He noted that what it requires is market discipline, innovation, public awareness on products and claims settlement.
On short to medium term strategies towards deepening penetration, he said pricing and market conduct is critical.
“Operators must maintain price discipline to deal with rate-cutting issues, while there will be need for greater collaboration between underwriters and brokers.
He was of the opinion that operators must imbibe the habit of self-regulation, adding that it will help build the image and perception of the insuring public about insurance. Industry professionals must come out with innovative products that have human face and customer oriented, adding that changing the names of old products to new ones will not help to deepen insurance penetration in the country, Musa said.
According to him, increase in micro-insurance penetration in new segments such as Agriculture can go a long way to boost the industry penetration in the grassroot, while noting that introduction of Takaful insurance (Islamic-compliant insurance) to rural parts of the country will further deepen insurance penetration in the country.
Earlier, the Commissioner for Insurance, Mohammed Kari said the changing Nigerian business environment offers insurance industry the opportunity to re-adjust its governance, portfolio management, operational structures and leverage on regulatory direction of the NAICOM.
Kari stated that the industry certainly cannot achieve the success it craves especially from the deliverables of the Summit and the Conference recently held, in an atmosphere of distrust, chaos, unprofessionalism and suspense without unity of purpose.
“In consequence of the effect of uncontrollable changes in the macro-economic environments affecting our businesses, organizations and entities either passively or negatively, we are therefore implored to map-out adaptive strategies and identify the opportunities inherent in the “Change”.
As far as Innovation is concerned we need to improve the content and quality of our services. In addition to our quest for innovation, changes in Companies business model must be exploited. The earlier we realized that the music has changed and thus the need to adjust our dancing steps, the better for us all, Kari stated.