Nigeria's insurance penetration of 0.4 percent has been described as one of the lowest in Africa.
Editorial Board Member of Nation Newspaper, Mr. Sanya Oni, stated this while speaking on the topic, "The role of media in deepening insurance penetration," at a Joint industry media retreat for insurance correspondents in Ijebu-Ode.
Oni said that the nation's insurance penetration of 0.4 percent figure makes its insurance sector a non-starter compared with South Africa with 16.9 percent and Kenya with 2.9 percent penetration respectively.
He said, "Compared with South Africa's 16.9 percent and Kenya's 2.9 percent, Nigeria's insurance penetration, variously put at between 0.3 to 0.4 percent makes the insurance sector a non-starter. Even worse is that only one percent of the Nigerian population holds any form of insurance policy. Considering that the industry which started in 1921 is actually older than those of China, India and Malaysia, we must worry given the vast advances in insurance practices in those climes, why things have remained in the current sorry state."
According to him, things are not what they ought to be, adding, "First, we see the rules of industry and codes of self regulation increasingly set aside. The most obvious one in this regard is rate cutting. The result is the unhealthy price competition which ensures that less than 50 percent of their expected earning actually comes into the coffers despite the enormous risk borne by the insurance companies.
"Before now, we knew of the roles of Offices Committee in setting industry wide premiums. Once upon a time, the offices committee which every insurance company as members of NIA belong, and its self regulatory mechanism, has been slowly and steadily eroded. In other words, the rules and conventions attenuating has long been jettisoned. Fire for instance which used to be charged at 0.2 percent minimum is currently 0.08 percent. How does the industry survive given that the cost environment is actually spiralling upwards not going down?"
Oni noted that the situation of the Nigeria's insurance penetration is worrisome and as such requires urgent attention for a better tomorrow.