Experts in the insurance industry have called on the government to create stronger regulatory policies and enforce existing ones to stimulate growth in the industry.
Despite the economic challenges, stakeholders are hopeful of huge growth opportunities this year.
Though, according to a few industry experts, looking at how the sector closed last year, it is expected that the issues and discussions that dominated last year would continue.
Yet, formulation and implementation of insurance policies, effective communication system, technology, innovative products, and services, as well as strategic partnerships, top the priorities of stakeholders in 2021.
The Managing Director at Law Union & Rock Insurance Plc, Adeduro Ademayowa, said the capital project in the 2021 budget, estimated at N3.85 trillion roughly about 30 per cent of the budget, is expected to generate economic activities. If all projects are insured, he said, they are capable of generating roughly N50 billion to N80 billion for the insurance industry.
Ademayowa said the events trailing the suspension of the recapitalisation of the industry were not unusual looking into history.
“NAICOM meant well for the industry, therefore the suspension isn’t a setback. The industry will rally to support the initiative to give insurance a good footing,” he said.
According to him, the expectations are not many but most have to do with operators rather than the regulator.
“We need to collaborate more to make the industry attractive to young ones and investors. Over competition is making us lose the essence of business,” he said.
The Executive Secretary, the Nigerian Council of Registered Insurance Brokers (NCRIB), Fatai Adegbenro, said more businesses and contracts are expected because of capital projects in the budget, which will require insurance policies.
“We are optimistic about a better business year. If things work as planned and the new insurance act is implemented, it will be a better year for the industry.
“The regulator is dedicated to growing the industry, and the #EndSARS protest was a blessing in disguise for the industry because it revealed the relevance of insurance to the government and Nigerians,” he said.
According to him, the industry is doing a lot to boost national economic development but very little of its relevance is known, especially given the prevalent trust deficit in the relationship between the industry and Nigerians.
He added that, in dealing with trust issues, communication is a key ingredient for success.
He said the industry needs to communicate effectively with the public, including existing and potential policyholders.
He said: “It is most surprising that the industry has continued to seemingly take communication for granted as compared to other financial services providers in this digital age. Effective communication entails an exchange of information and data between parties. Incidentally, policyholders have increased their correspondences to the industry regulator and operators but have not received as many responses. Do you know that Nigeria sits 8th position from the bottom among African countries in terms of insurance penetration? This is unacceptable and a critical reason to emphasise communication as a strategic step to see the adoption of insurance go up.
“New products, collaborations, and partnerships necessary to enhance insurance awareness and deepen penetration could not be given due attention last year due to the many challenges faced by operators. These are the areas we expect more positive actions from operators in 2021.”