Experts have charged local insurance firms to increase capacity to retain more risks locally, thereby, increasing the profitability of insurance industry in the country.
Speaking at a media parley jointly sponsored by Boff & Co Insurance Brokers Limited and B. Adedipe Associates Limited for insurance journalists in Yaba, Lagos, they agreed that the industry has improved its capacity over time, but that, a lot of insurance businesses in the country are still insured offshore.
They equally identified operators and regulators cooperation, sustained and constant stakeholders’ engagement , among others, as critical to the growth and development of the Nigerian insurance industry.
The chairman/chief executive officer of Boff & Co Insurance Brokers Limited, Chief Babajide Olatunde-Agbeja, called for increased capacity, regular staff training, investment in information and technology and regular engagement with stakeholders to grow the sector.
“There is the need for increased capacity in the Nigerian insurance industry. When Boff an Co started special risk 25 years ago, we were insuring about 70 per cent of our portfolio abroad. But overtime, it reduced from 70 per cent to about 20 per cent and in the last six months, we had problems of finding excess capacity to insure abroad. As at today, the businesses we did in the last three months were 100% placed in Nigeria,” he pointed out.
Stating that the capacity is growing but that operators needed to back it up with technical know-how, training and retraining of staff, they implored stakeholders to keep pace with the trend of events globally because insurance business is an international business.
On the need for recapitalisation of the industry, he said, those who went to court to stop the earlier insurance recapitalisation exercise were doing a lot of disservice to insurance industry.
“Although the industry is doing well, we only need to be better. We need to be sincere, be professional, and ensure that capacity increases continuously. The economy is opened, investors are coming in to investing in life and general businesses and special risks, because they have seen things we cannot see and we need to work more on our technical know-how because that’s still lacking,” Chief Agbaje added.
Earlier in his presentation titled, ‘2021 Review and 2022 Economic Outlook,’ the chief consultant of B. Adedipe Associates Limited, Dr. Biodun Adedipe, applauded insurance industry but felt there are areas of improvement.
“Nigeria still experience insurance low penetration and why? So, what next can the government do? Government also needs also to be responsible to its insurance obligations. It needs to promptly pay premium; there is also a need for flexibility and enforcement of necessary laws.
“If the government and its agencies are responsible, put more firmness into enforcement, then, what we have today will change and the industry will create more value. And of course when insurance sector is vibrant, it enables businesses and entrepreneurs to take risks which is part of the economic growth,” he stressed.
The challenges of insurance in Africa, according to him, include lack of trust as the industry is driven by fraud and lack of appropriate information to policyholders.
On low insurance penetration in Nigeria, the economist said, there is need for operators to provide adequate information to policyholders and prospective insurance customers and clients
“If someone says because of religion, can we point them to the direction of takaful. People need to see that insurance is fundamental and important for growth. Globally insurance is becoming more important and Nigeria cannot be left out from this trend,” Dr. Adedipe stated.