Nigerian insurance companies have been urged to provide political violence insurance cover considering the series of bomb blasts and loss of properties to political upheavals the nation has witnessed since the return to democratic rule in 1999.
The analysts at Nairametrics said it is only through innovative products that insurance companies can generate reasonable upswing in premium income that will attract investors to its shares.
By offering products that meet the needs of the populace, the analysts at Ugodre Obi-Chukwu-led Nairametrics said insurers in Africa largest economy will be able to increase coverage so as to deepen penetration and boost premium income.
Political violence insurance is an insurance policy in the special-insurance-product category, covering both terrorism and business disruption.
While pointing out that the premium chargeable could be low since the chances of such an event occurring are low, the analysts believed that the insurers would benefited from such products.
As the insurance industry is part of the Nigerian financial sector given its classification in the last GDP rebasing exercise, the insurance operators were advised to embrace continuous products developments like their counterparts in Europe, Asia and the United States.
Rather than limit themselves to only compulsory third party motor insurance to generate their premium income, the insurers was advised to give favourable to other classes of insurance capable of satisfying the needs of the people.
In view of the fact that insurers have been generating over 90 percent of their premium income from third party insurance, the analysts said this explains their abysmal profit margins, less than one percent contribution to the economy and recurring losses.
The share price of most of the insurance firms quoted on the Nigerian Stock Exchange has remained stagnant at 50 kobo in the past three to four years.