The large concentration of insurance companies and their branch operations in major cities across the country and an almost complete absence in the rural areas are exposing consumers to the risk of fake certificates, BusinessDay investigations show.
This same development has been linked to the low penetration of insurance in Nigeria, particularly in the rural areas, where over 60 percent of the uninsured public dwells, while the sector’s contribution to GDP is still less than 1 percent.
Analysts who spoke to BusinessDay last night said a typical Nigerian motorist in the rural areas, who wants to get a motor insurance policy will pay to any available source when there is no insurance company office within reach.
“It is difficult to imagine what a rural dweller who wants to buy insurance for his motor-bike for instance, would do when there is no presence (branch office) of any insurance company in his locality,” one of the analysts said.
In this case, not only has the insurance company lost premium, the consumer has no protection and the image of the insurance industry is further
dented, Julius Abiodun, an insurance broker said.
Mohammed Kari, commissioner for Insurance, said if the insurance industry means to enhance its contribution to the nation’s GDP, then it would need to reappraise its operational strategy.
“Availability and access to insurance services are so fundamental to increasing insurance awareness and activities, particularly at the grass roots,” Kari said.
Data from the National Insurance Commission (NAICOM) shows that 57 underwriting companies registered in the country have a total of 853 branch offices, with Lagos leading with 153 followed by Rivers and the Federal Capital Territory (FCT) each with 62 branches. Yobe has the least, with two branches, Kebbi and Zamfara have three branches each.
About six states have less than five branches of insurance offices located in their respective states.
A source at NAICOM said it is obvious that there is inadequate presence of insurance companies in some states of the country, and that no wonder then, that people patronise fake insurers since “the desirable is not available, and then what is available becomes desirable.
Akin Ogunbiyi, group managing director, Mutual Benefits Assurance plc, said the growth of the insurance industry lies with developing opportunities in the retail sector.
According to Ogunbiyi, the greatest problem of the insurance industry is focusing on elitist service and the corporate world, which has not impacted the lives of average Nigerians and the economy in general.
Ogunbiyi said with over 72 insurance products and 80 branch networks in the country, Mutual Benefits is poised to meet the needs of the retail customers at the micro level.
“The company was ready to ensure that insurance reach all the majority of Nigerians who are not covered by the conventional insurance.”
Sunday Thomas, director general, Nigerian Insurers Association (NIA) said insurance must be taken to the larger populace who cannot afford the conventional insurance, stating that this is why the NIA through its officers Committee was working on promoting micro insurance among the informal sector.
“What we need do as operators, is to come up with affordable products that meet the needs of this group of Nigerians, and also devise innovative approaches to distribute the products, Thomas said.
