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Insurance experts link sector’s low awareness to poor MSMEs engagement

By Bankole Orimisan
18 November 2022   |   3:49 am
Experts in the insurance industry have attributed low insurance penetration in the country to poorly-tailored products for Micro, Small and Medium Enterprises..

Micro, Small and Medium Enterprises (MSMEs)

•Urge operators to provide tailored products

Experts in the insurance industry have attributed low insurance penetration in the country to poorly-tailored products for Micro, Small and Medium Enterprises (MSMEs), therefore, urging underwriting companies to provide the sector with needed solutions.

The industry players stated this in Benin City, Edo State, at the just-concluded Chartered Insurance Institute of Nigeria (CIIN), Education Seminar tagged: “Insurance Solutions for MSMEs: Accessing New Opportunities for Penetration.”

The president/chairman of the Council, Edwin Igbiti, said the MSME sector is a key pillar and contributor to the nation’s Gross Domestic Product (GDP).

According to him, “the sector plays strategic roles in poverty alleviation and inclusive growth through innovative and improved productivity, but unfortunately, they are highly vulnerable to risks. MSMEs in Nigeria accounts for 96 per cent of business activities, contribute 50 per cent of the national GDP and provide over 48 per cent of the employment opportunities in the country, according to the United Nations Industrial Development Organisation (UNIDO).

“Despite the critical position of MSMEs in the socio-economic development of Nigeria, the insurance sector recognises that they face various hurdles that negatively affect their sustained growth, including limited to no access to funding, business training, formal credit, infrastructure deficit and more. This is where insurance comes in to assist in indemnifying the risks identified in this market.”

Igbiti stressed the major risk that is bedeviling the nation and MSMEs inclusive, among others is the flooding menace. The current flooding has caused major havoc and the death of lives. He, however, sympathised with the victims across the country and believe that insurance companies will play their expected roles in ameliorating the effect of the losses and damages promptly, as I know they are currently warming up to process huge claims from recent floods that ravaged some states.”

He, therefore, urged underwriters to resonate the benefits of insurance to Nigerians.

Similarly, the Managing Director/Chief Executive Officer, AIICO Insurance Plc, Babatunde Fajemirokun, affirmed that MSMEs are the driving faction needed to improve the economy and boost insurance penetration.

“Rethinking the role of MSMEs is crucial to the penetration of insurance in Nigeria. The sector is the missing link in expanding the frontiers of the insurance market. The market should be relied on to boost the adoption level of insurance even as marketing, advertising, and branding should be invested more in the insurance industry.”

Also speaking, the Head of Financial Services, SCIB Nigeria & Company Limited, Peter Offiong, noted that products and services of insurance fail because they do not meet the specific needs of the MSMEs and other consumers.

He added that operators must start to produce products and services that relate to what people think and do daily. “The issue with MSMEs is in product development because they are in different categories, hence consumer education should be intensified and they should learn to trust us to deliver their needs.”

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