THE New Partnership for Africa's Development (NEPAD) has expressed worry over the low penetration of the insurance industry, despite current reforms and innovation from National Insurance Commission (NAICOM) and operators, therefore stressing efforts to use the industry to strengthen the nation's economy.
The Chairman, NEPAD Business Group Nigeria (NBGN), Chief Chris Ezeh explained that the industry's performance still remains below potential as only 800,000 of the nation's adult population have insurance policies.
Ezeh during the public lecture on the insurance industry in Lagos, stressed that the low penetration can be attributed to many factors which are peculiar to nature of the operating environment such as, limited public awareness, the prescriptive orientation of the Insurance Act 2003 and lack of confidence on the insurance operators by the insuring and non insuring public amongst others.
"With the country population of over 150 million size, the huge potential of insurance in Nigeria is far from being fully maximized. The insurance sector has the key to the transformation of the entire economy as it presents vast opportunities for the citizens, the industry, the financial service sector, and the economy," he said.
According to him, insurance industries anywhere in the world are tools for wealth creation maintaining that there will be no real growth or development unless the insurance industry is strong, reliable and plays its major role as major mover of the economy.
In his words, "Nigeria would attain rapid and sustained economic growth if it deepens its insurance penetration whereby more members of the population buy one or more of the available insurance products."
He added that the public lecture would not have come at a better time that the President's administration is making all efforts to transform all the sectors of the nation's economy stressing that NBGN strongly believe s that proper focus and development of the insurance industry and its huge potential is critical to the achievement of the President's transformation agenda.
Also speaking at the event, the Special Adviser to the President on NEPAD, Ambassador Fidelia Njeze said the public lecture is apt and captures the aspiration of NEPAD Nigeria for the insurance industry in the country pointing out that the industry plays a critical role of risk sharing or risk spreading.
Njeze who was represented by the Director, Admin and Finance, in the Presidency, Mazi Okey Nzem said the industry is a major source of medium to long term investment funds which are usually deployed to fund developmental initiatives such as infrastructure, capacity building and the likes.
He stated that in advanced societies, pension and insurance institutions are major players in both the money and capital markets where they deploy their investible funds to promote economic ventures in critical sectors of the economy.
"I am aware of the very poor image which the insurance industry in Nigeria had unwittingly attracted to itself. This has negatively affected the patronage base of insurance companies. While this is being addressed by the regulators, I call on the players to emulate their counterparts in developed economies and play their role in wealth creation and sustainable economic development," he said.