Insurance industry stakeholders have urged the National Insurance Commission (NAICOM) to drive the financial inclusion of many Nigerians as a way of increasing insurance penetration across the country.

The insurance experts, who spoke with The Guardian in Lagos, observed financial inclusion as a driver of economic growth and development of which insurance plays a vital role in ensuring that people do not become poor after suffering mishaps to their source of livelihood.

Insurance, they said, would return the insured to the financial position he/she was in before the occurrence of an insured risk. Speaking on the development in the sector, former Chief Executive Officer, FSL Insurance Brokers Limited, Alfred Daudu, while stressing the challenges of the industry to achieve financial inclusion, said, the number of those financially excluded in Nigeria is over 50 per cent of the 99 million adult population, therefore, the number of those who should access insurance of any kind is drastically reduced.

The populace’s inability to save due to double-digit inflation in the economy, according to Daudu, is a serious challenge as most families don’t have enough to take care of their basic needs let alone save or take up insurance policies.

He also pointed out that poor insurance awareness accounted for why most Nigerians have a limited knowledge level on the need to take up insurance coverage, which affected their perception of insurance.

He, however, advised the new leadership of the commission, to initiate a new media campaign to educate the public on the benefits of insurance.

He added that such campaigns will enrich the knowledge level of both rural and urban populace on the need for an insurance policy. He said efforts must be put in place to create jobs for the teeming youth. More jobs, no doubt, will increase financial access. This is because the reduction in formal employment will lead to a reduction in disposable income and savings. This will ultimately affect insurance,” he pointed out.

While calling on Nigerians to embrace insurance as a key risk mitigation mechanism, he added that insurance is equally key to sustainable financial inclusion as there is no future without insurance.

Also speaking on the development in a paper delivered by the Director, Inspectorate of NAICOM, Ajibola Bankole, at the maiden Independent Newspaper Insurance Summit tagged: Inclusive Insurance: Navigating The New Narratives For Sectoral Growth” recently in Lagos, said insurance inclusion Studies approximated that only 1.5 per cent – 1.63 million, of all Nigerian adults put at 108.78 million are covered by insurance.

According to him, the population of Nigeria was 228,047,006 as of April 19, 2024, based on Worldometer elaboration of the latest United Nations data 1.The population of Nigerians aged between 18-64 years – adult, was 108.78 million.

Nigeria’s 2023 population is estimated at 223,804,632 people at mid-year. Nigeria’s population is equivalent to 2.78 per cent of the total world population.

Bankole noted that uninsured Nigerians face risks and require better mechanisms to mitigate these risks as an alternative to the informal arrangements currently in use. The low insurance penetration in Nigeria, he said is in part, a consequence of the lack of trust and confidence in insurance companies. He also pointed out that the perception of the market is the limited knowledge of insurance amongst the public.

According to him, this new narrative demands a multi-pronged approach around Product Innovation, Distribution Channels leveraging technology and partnerships and financial literacy by investing in financial literacy campaigns that educate Nigerians about the benefits of insurance and empower them to make informed choices.

Speaking also on how the sector can increase insurance penetration, a professional insurance broker, Adegun Ogunyelu, said that there is a need for creativity in the offering of services by insurance companies to grow the insurance industry.

To him, “it is common knowledge that Insurance penetration is nowhere near where it should be in the country. As practitioners, we can also acknowledge that companies are doing all that they can within the tenets of the law to reach out to customers to create a sustained demand for insurance products. The question is, are our best efforts enough? What more can we do to improve our lot?”

Insurance operators, he said, are being tasked to reorganise their operations and focus on promoting value. This, he noted, would, in turn, increase the number of persons who embrace insurance, turning them into ambassadors no matter in what sector they actively function.

To him, financial inclusion is a major facilitator of the growth of the Insurance industry, adding that, “even the smallest molecule of our operations should be clear and concise to our target audience and our messages should reach them where ever they are. Only then can we truly retain top-of-mind awareness and agree that we have taken a significant step in what we collectively desire to achieve, an Insurance industry that is a significant contributor in terms of numbers to the economic growth.”

He charged underwriters to increase the tempo of their campaigns for insurance awareness and professionalism to get more people to stand up and take notice and for more Nigerians to embrace insurance as a profession and as a service offering.

A policyholder of one of the insurance companies, Joseph Ademola, said the need for insurance companies to be flexible and innovative in their product offering.

“For instance, any request that is slightly not in line with their usual coverage is usually rejected. Some customers make complaints such as; ‘I wanted to pay a higher premium for them (insurers) to not just insure my fleet comprehensively but also cover some lost revenue when any vehicle is going through the claims process.”