An insurance technocrat and economic experts have challenged local insurance firms to increase their capacity in order to retain good percentage of risks locally in the country.
Essentially, according to them, this would not only strengthen management and technical capability, but also increase the profitability of insurance companies operating in the market.
Besides, although they agreed that the industry has improved on its capacity overtime, they solicited for regular strengthening of the market as a lot of insurance businesses in the country are still being insured offshore.
Speaking at a media parley jointly sponsored by Boff & Company Insurance Brokers Limited and B. Adedipe Associates Limited for insurance journalists in Lagos, equally identified and advocated on the need for operators and regulators co-operation , sustained and constant stakeholders engagement, among others, was critical to the growth and development of the Nigerian insurance industry.
For instance, Chairman/Chief Executive Officer, Boff & Co Insurance Brokers Limited, Chief Babajide Olatunde-Agbeja, called for increased capacity, sustainable staff training, investment in information technology and regular engagement with industry stakeholders to reduce potential areas of conflict to grow the sector.
According to him, “there is the need for increased capacity in the Nigerian insurance industry. When Boff and Co started special risk business 25 years ago, we were doing about 70 per cent of our portfolio abroad, overtime, it reduced from 70 per cent to about 20 per cent and in the last six months, we had problems of finding excess capacity to insure abroad. I am proud to tell you that, as of today, the businesses we did in the last three months were 100 per cent placed in Nigeria.
“The capacity is growing but we need to back it up with technical know-how, training and retraining of staff. Insurance industry should keep pace with the trend of events globally because insurance business is an international business.”
On the need for recapitalisation of the industry, he said that those who went to court to stop the earlier insurance recapitalisation exercise were doing a lot of disservice to the insurance industry.
“Although the industry is doing well, we only need to do better. We need to be sincere, be professional and ensure that capacity increases continuously.”
“The economy is opened, investors are coming in to investing in life , general business and special risks, because they have seen potential things we are not seeing, we need to work more on our technical know-how because that’s still lacking,” Chief Agbaje added.
Earlier in his presentation titled “2021 review and 2022 economic outlook,” the chief consultant, B. Adedipe Associates Limited, Dr. Biodun Adedipe, applauded the development in the insurance industry but felt there are areas that calls for improvement.
He said “Nigeria still experience insurance low penetration and why? So what next can the government do? Government needs to be responsible to its insurance obligations. It needs to promptly pay premium; there is also a need for flexibility and enforcement of necessary insurance laws.
“If the government and its agencies are responsible, put more firmness into enforcement, then what we have today will change and the industry will create more values. And, of course, when insurance sector is vibrant, it enables businesses and entrepreneurs to take risks which is part of the economic growth”, he said.
According to him, “The challenges of insurance in Africa, include lack of trust, as the industry is driven by fraud and lack of appropriate information to policyholders.”
On low insurance penetration in Nigeria, the economist said, there is need for operators to provide adequate information to policyholders and prospective insurance customers and clients.
“If someone says because of religion, can we point them to the direction of Takaful. People need to see that insurance is fundamental and important for growth. Globally, insurance is becoming more important and Nigeria cannot be left out from this trend,” Dr. Adedipe stated.
In his opening remarks, the Chairman, National Association of Insurance and Pension Correspondents (NAIPCO), Chuks Udo Okonta, explained that the rationale behind the NAIPCO media parley with Boff and Company Insurance Brokers Limited and B. Adedipe Associates Limited was put in place so that NAIPCO members as purveyors of information would meet with experts to review 2021 economic outcome and examine the 2022 economic outlook so that they would be able to inform the public appropriately.
To him, “every information you give us, we are going to digest it before putting it out to the public.”
He appealed to the management of the two organisations to sustain the programme so that all stakeholders would derive maximum benefits.