Experts urge insurers, pension players on economic growth
Experts across the insurance and pension industries have been advised to explore opportunities created by the COVID-19 pandemic to grow the two sectors and contribute maximally to the national economy.
Former Director-General, Lagos State Pension Commission (LASPEC), Folashade Onanuga, at the 2021 NAIPCO National Conference, tagged ‘COVID-19 Impact on Financial Inclusion: Opportunities for Insurance and Pension Sectors’ in Lagos, charged operators on product creativity, innovation, and service delivery through information technology channels, by focusing on the need of Nigerians for financial capacity.
Onanuga said the pandemic has triggered severe disruptions while giving companies opportunities to grow their customer base.
She said, need to make plans for themselves for wellness as there is no sufficient response from the government.
She said: “Economic shocks like a sudden loss of job, illness or death can send people living just above the poverty line into poverty. So, whether one is in the formal or informal sector, there is a need to have a safety net. The sudden and unforeseen mishap created by the pandemic has stressed the need to plan for unforeseen circumstances and even early retirement.”
To take advantage of the new opportunities, she said, the pensions and insurance industries must remain committed to the inclusive growth of the Nigerian economy, creating opportunities for lower-income groups to be part of the broader financial system.
She explained that “financial inclusion is achieved when both youths and adult Nigerians have access to affordable financial products and services that meet their needs. Financial inclusion can only also be achieved when financial transaction processes and documentations are transparent, simplified and seen as meeting the needs of the people and at the same time being beneficial to the financial services sector.
“Insurance penetration has remained at an average of 0.4% of GDP driven largely by a general lack of understanding and awareness of the benefits of insurance products, specifically amongst low-income Nigerians.”
She said, there is a need to build trust in the sector, as the banking sector has managed to bridge the same gap to an extent.
“Attempts have been made to improve the performance of the insurance industry through regulatory efforts and legislation – new capitalisation requirements have been announced and reviews of several key laws are being discussed to bring them up to current realities,” she stated.
To improve access to insurance and make products and services inclusive, there is a role for stakeholders to play.