High unemployment and poverty rates are responsible for the low insurance penetration in Nigeria, industry players have said.
The industry players, who gathered at the 53rd yearly general meeting of the Nigerian Insurers Association (NIA) in Lagos, agreed that until the government, at all levels, addresses lingering unemployment in the country, the low insurance penetration would persist.
A check by The Guardian at the weekend revealed that the low penetration remains at less than one per cent where over 40 million Small-Scale Enterprises (SMEs) account for about 84 per cent of employment and 50 per cent of Gross Domestic Product (GDP), were relying on cash to manage daily risks.
Speaking on the development on the sideline of the programme, the new Chairman of NIA, Kunle Ahmed, said the association would continue to collaborate with the National Insurance Commission (NAICOM) and other stakeholders within the financial services sector to promote the business of insurance through the development of innovative products, especially for the financially excluded, and the enforcement of compulsory insurances towards the growth and development of the industry.
A stakeholder, who spoke on a paper recently at the Coronation Insurance Plc webinar with the theme: ‘Shared Prosperity through Financial Inclusion Protecting your business and wallet using insurance’, said that even large-scale businesses with substantial assets and secure cash flow cannot have cash, sufficient enough to cover their entire risk portfolio.
They also argued that financial recklessness often challenges the ability of Nigeria’s small business sector to drive sustained growth and long-term prosperity.
In the same vein, the Managing Director of Coronation Insurance, Olamide Olajolo, in his paper said that in a volatile market where a single event could wipe out a lifetime’s work, insurance played a critical role in both personal and business survival.
He added: “By creating a pool of capital in which the good fortune of the many assured the survival of the few who encountered misfortune, insurance had a critical role to play, primarily by making sure that Nigerians didn’t rely on their savings or assets to cover losses.
“It was incumbent on the industry to change the narrative on insurance, imagining that a N250,000 cover, for example, could secure over N1 billion in risks. What business could set N1 billion aside to cover their risks?”
Panellists at the event also observed that the attitude toward insurance could be changed in Nigeria by providing practical examples of how simple insurance products could sustain financial inclusion by protecting income and investment.
Panellists also demonstrated the value of insurance, especially to businesses. Simple and affordable products like health and life insurance for business owners could save a family or a small business owner from being wiped out by the ill health of the breadwinner or single business operator.
The post Stakeholders link low insurance penetration to unemployment, poverty appeared first on Guardian Nigeria News.
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