Micro insurance, a key element to driving insurance penetration in Nigeria will work if players in the industry consider price, access and simplicity in designing the products.
According to experts, simplification of premium payment pattern from annual to daily, monthly or quarterly as obtainable in some developed nations of the world would drive acceptance and uptake.
These were highlights from expert’s discussion at the Alumnus of Insurance and Actuarial Science Students (Set 89) of University of Lagos symposium to celebrate one of their classmates, Kunle Aduloju, who was recently elevated to the post of a professor.
Delivering the theme paper entitled “Insurance and Financial Inclusion: Developing Insurance Products For The Informal Sector, Abiodun Adedipe, chief consult, Adedipe and Associates, said there was need for insurance and microinsurance product developers to develop products that meet the needs of the people.
According Adedipe, the essentials in developing a microinsurance product include affordability: the premium can be financed by available cash flows; accessibility: convenient and low stress locations and processes; appropriateness: responds to priority needs with relevant benefits and few exclusion; simplicity: easy to understand and use; responsiveness: timely and reliable response to shocks and helpful answers to client queries and enquiries.
He said microinsurance serves as a tool for social development, financial inclusion and economic development.
Adedipe said financial inclusion is better situated within the context of the informal sector which constitutes 52 per cent of the country’s GDP while 99 per cent of registered businesses in Nigeria are MSMEs, alongside hordes of Nano enterprises.
While noting that the informal sector should be a major target for financial inclusion, Adedipe said “the informal sector is a bundle of challenges and opportunities for economic growth, poverty alleviation and efficient transmission of policies”.
Adedipe said the micro insurance network and inclusive insurance is targeted at about 6.5 billion persons in the world who are vulnerable to sicknesses, illnesses, job losses or have their business premises destroyed or damaged by floods or fire.
He lamented that there was a huge gap between losses of life and property that are insured and those that were not. “The gap is valued at $1.42 trillion globally representing economic value of health care, ultimately death and climatic disasters”, Adedipe averred.
In his speech, Henry Ationu, president of the 89 set of the Insurance and Actuarial Science Department underscored the need for a meeting point between the Town and Gown, through efforts of Alumni Associations for the promotion of wholesome education crystalising in progress of the nation.
Ationu opined that the gathering was convoked to celebrate the sterling accomplishment of their colleague and classmate, Professor Kunle Aduloju who was recently elevated to the position of a Professor in the university.
Yetunde Ilori, chairman of the occasion, an alumnus of the university and director general of the Nigerian Insurers Association (NIA), opined that the Nigerian insurance industry could enhance its growth frontiers by placing premium on enhancement of financial inclusion development of products that could meet the yearnings of consumers of insurance.
She said it is regretful that despite the strident efforts of the industry operators to grow the industry, the efforts had only yielded paltry result as reflected in the industry’s contribution to the country’s GDP, calling for more ingenuity and creativity by the operators.
Responding, Professor Aduloju was appreciative of the gesture and emphasised the need for constant engagement between the institutions of learning and their products to enhance knowledge sharing and cohesion.
Extolling the qualities of the celebrant, Edwin Igbiti, president and chairman of Council, Chartered Insurance Institute of Nigeria (CIIN) described him as technical person to the core.
Igbiti said when he got to know that Adekunle has gone back to become a lecturer, he knew a day like this will come where he will be celebrated.
“The industry recognizes you, the industry appreciates your contribution to insurance education in Nigeria.
“One thing that stands out for the benefit of the students today is the celebration. But if you look at the height he has reached, there is a history behind him being celebrated today,” Igbiti said.
He urged the students to work hard to distinguish themselves in their chosen professions.
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Also speaking, Dalah Ahmed, professor and head of Department, Actuarial Sciences and Insurance emphasized the need for collaboration between the academics and the insurance practitioners to find a lasting solution to the low insurance growth in Nigeria.
“We have the problem in the economy. Why insurance penetration in Nigeria is so minimal? Is it because we are Nigeria? But if you go to South Africa insurance is booming. If you go abroad and everywhere, insurance occupy the pinnacle of the financial industry. But why is this problem in the context of Nigeria?
“Recently some partners came from United Nations Development Programme because of what they called ‘Climate Change and the Impact on the Ecosystem’ and they noted that insurance must play a primary role because most of these devastations emanating from the climate change will affect the insurance industry.”
“I told them that insurance industry in Nigeria is not doing optimally and now the problem of climate change is coming.
“Raising a question on how the insurers can make insurance penetration improve optimally, Dalah said “I think it is a lesson for all our academics, don’t relent on your oars. We are trying to do so many research papers and we will continue to do it but we will not relent until we find where the problem is.”
He urged Prof to bring the Town and Gown to research into why insurance penetration still remains low in Nigeria, noting that research in this area is more relevant.
On the other side, insurance industry needs to invest in the research on financial inclusion; insurance penetration; why insurance is not well developing in Nigeria? How do you mitigate it? How do you handle the solution to be more paramount to us?
In her goodwill message, Yetunde Ilori, director-general, Nigerian Insurers Association (NIA), commended the organisers for honouring their own and urged them to keep up the good work.
“I am not surprised when statistics look at life-expectancy and we realized that it has moved up. Why? In those days when people retired, they hardly see one another. What they will be thinking is that friend has gone, wondering when it will be their turn but thank God for the civilization and the modern technology, keeping friends together.”
Oluwarotimi Edu, president, Nigerian Council of Registered Insurance Brokers (NCRIB), Tunde Oguntade, deputy president of the Council said, for some of us who went to the University of Lagos (UNILAG), celebrating one of us, is a great thing.
He said celebrating Adekunle serves as morale booster to students who will like to become professors.
“When you see great minds, who have left fortunes, who have left all their pleasures of life to grow the society, grow the economy, we need to celebrate such people very well. So, for Adekunle to have left naira and kobo, to be pursuing educating, imparting knowledge, and for him to rise to peak of his career, I think the man worth celebrating.
“I want to say that the Nigerian Council of Registered Insurance Brokers is very happy to be represented here. To build students’ capacity in the area of practical experience, NCRIB will always absorb students for Industrial Attachment, adding that NCRIB will ensure each member of the Council takes two students for industrial attached during their vacation.”
