‘Insurance industry contributes less than one per cent to GDP’

…Stakeholders seek measures to deepen sector’s growth

The Lagos Chamber of Commerce and Industry (LCCI) has lamented over the nation’s underperforming insurance sector, noting that despite the vital role insurance play in the growth and development of an economy, its contribution to the Gross Domestic Product (GDP) is still less than one per cent.

Indeed, the chamber stated that a strong and competitive insurance industry is an imperative for any nation’s economic development and growth.

The president, LCCI, Dr. Nike Akande, explained that less than one per cent of Nigerians have life assurance policies, adding that the industry’s density still stands at 0.225 per cent with a near-zero informal sector penetration in the country.

Akande during the formal inauguration of the chamber’s insurance sector group, said the formation of the group is timely considering the challenges hindering the growth of the sector, pointing out that the group is expected to play a strategic role in advancing possibilities in the sector through market innovation, better technology, improved business strategies, micro insurance and informal sector opportunities.

She added that other strategic roles would involve increased awareness, investment, value creation and employment generation, urging its members to take advantage of the opportunity to promote the growth of the insurance sector to enhance the prosperity of their individual businesses.

“Your voice should be loud enough to influence the policy, regulation and legal framework for a conducive business environment in the sector. I implore you to take advantage of advocacy and media platforms in the chamber to dialogue with the government and regulatory agencies as and when necessary,” she advised.

According to her, the insurance sector represents the backbone of risk management systems, ensuring financial security, serves as an important component in the financial intermediation chain and offers a ready source of long-term capital for private and public sector projects, but stressed that sector in Nigeria is still below average.

Also speaking at the event, the chairman of the insurance group of the chamber, Gboyega Olanbiwoninu, said the chamber’s decision to inaugurate the group is apt and timely, especially now that there is increasing concern for the expansion of channels through which the premium place of insurance to national economic development could be ventilated.

He stated that it has remained a concern that in spite of the huge potentials inherent in the Nigerian insurance industry, the recognition and acceptance accorded the industry is abysmally low.

He said as at July 2015, insurance penetration in Nigeria stood at 0.6 per cent compared to neighbouring African countries like South Africa, Namibia and Kenya which recorded 15.4 per cent, 7.7 per cent and 3.4 per cent respectively, stressing on the need to reverse the trend.

He commended the efforts of key stakeholders including National Insurance Commission (NAICOM), Nigerian Insurance Association (NIA) and Nigerian Council of Registered Insurance Brokers (NCRIB) for various marketing campaign and strategic initiatives deployed towards increasing insurance awareness and penetration in Nigeria.

He said the insurance group of the chamber is positioned to adding value to the industry through strategic partnership and active collaboration with other 22 sectoral groups of the chamber with over 2000 members.