PwC Reveals Reason for Nigeria’s Low Insurance Rate
PriceWaterHouseCoopers (PwC) has revealed that poor public participation, monitoring and enforcement of mandatory policies are factors responsible for Nigeria’s low insurance rate of 0.4 percent.
The organization celebrated her 10th year Anniversary and a public lecture, organized by Consolidated Hallmark Insurance (HCI) was held in honor of the organization.
Speaking at the lecture, the Chief Economist and Strategist of the organization, Dr. Andrew Nevin, affirmed the absence of innovative products and distribution channels, coupled with complex, lengthy policy and claims process in the industry. He further stated that Nigeria’s insurance penetration rate of 0.4 percent is relatively low to that of other countries of similar high population like South Africa with 14.4 percent, India at 3.3 percent, Brazil at 5.1, Namibia at 7.4 percent, Russia at 3.1 percent, Indonesia at 1.4 percent and Kenya at 2.9 percent. He further warned that this low level of Nigeria’s penetration is bound to further deteriorate except insurers begin to proffer solutions to varying customer needs with new innovations, build reliable relationships, enhance interactions and form good networks. He went on to proffer strategies that would harness potentials and encourage interdependent relationships as means of insurance penetration rate in Nigeria.
The strategies include customizing insurance solutions, removal of large, entrenched bureaucracies and offering seamless customer experience, use of technologies and services to increase access to information that can empower consumer decisions and partnerships between intermediaries, service providers and reinsurers.
The commissioner for insurance, National Insurance Commission (NAICOM), Mr. Mohammed Kari, in his opening remarks earlier congratulated the company’s management, board and stakeholders for the landmark saying “what we are celebrating today is that of many businesses combining to become one, in this case Consolidated, Hallmark and General Insurance”. “It is general knowledge that many businesses that started up new or through combinations have life span of three to five years”, he continued. He stated, ‘’Consolidated Hallmark Insurance has not only passed through the injury periods, but is waxing stronger and better 10 years after. The board and management of the company need to be commended for the success and progress so far.”
However, he maintained that whilst the company celebrated her success, it should bear in mind that it’s increase would be accompanied by higher expectations, adherence to corporate governance, and sustainability of growth among others. Therefore, he advised that strong corporate governance structure be put in place by the board to guide the company’s future activities.
According to him, this is imperative to the transitioning from compliance based to principle based (risk based) capital and supervision in the insurance industry.
He lamented that the problem of has led major players in the industry to poor performance and regulatory concerns, which posed systematic risk to stakeholders.
In response to the lecture, Mr. Obinna Ekezie, Chairman, Custodian and Allied Insurance, (CHI) stressed the importance of lectures of this form in combating the challenges that have hindered development of the economy. “Insurance is a tool, which absorbs risks from individuals and corporates while at the same time helping to underpin stability and stimulate economic growth. Insurance is, therefore, more relevant today than ever before.” This he stated to portray the key role the sector has to play in offering practical solutions to the challenges.
Source: The Nation