By RARZACK OLAEGBE
Banks contribute more to Nigeria’s GDP than insurance. It should be the other way round. This is because insurance connects all sectors. Yet it has a stigma. Insurance in Nigeria has different meanings to different people. For some, it is a tale of woe. It is gloom. No bloom. For others. Yet for those in the logistics business, the insurance man is not to be trusted. What is your story?
Insurance firms are smaller in Nigeria
The Reinsurance reports reveal that Nigeria holds a mere 1.7% (or $1.08 billion) of the African insurance market. In contrast, South Africa dominates with a remarkable 68.2% ($43.36 billion). Insurance firms are bigger in Europe and America. But the banks are bigger in Nigeria. Insurance firms are smaller here.
Insurance is not adorable
If an insurance policy is indispensable, it will be adorable. But it is indispensable. That is why it is not adorable. You can live without an insurance policy. To keep up with your policy, you obviously need disposable income to pay your premium every month. Otherwise, your policy may lapse. If it lapses, you are out of coverage. Without coverage, if it rains, you will be wet. If it floods, you have no one coming to rescue you.
NIIRA to right the perception
The 2025 Nigerian Insurance Industry Reform Act (NIIRA) has come to strengthen the industry. I have a doubt. Anyway, the NIIRA Act says it will increase capital requirements for insurers. Improve policyholder protection. Align the insurance practice with international standards. Mandate the digitalisation of the insurance processes.
The act will hasten claims settlement. For instance, you can expect a 24-hour settlement mandate for some claims. This is germane because the lack of transparency in claim settlement has pushed many Nigerians away from taking out an insurance policy. In 2005, I had a comprehensive insurance policy on a brand new car. Paid the premium every month. For two years, life was good. Then life happened. The car tumbled. No life loss.
Courting my lessons
My insurance firm waded in. I photographed the accident scene. Got the police report. Sworn to an affidavit. The broker was helpful. Life crawled. Then the ping-pong game went on. For six months. I had fixed the car. Moved on. Out of the blue, the broker called. Bad news. The insurance would pay [he mentioned the paltry sum]. I accepted the payment. Courted my ‘lessons’’. After that, the insurance policy is a taboo. Many friends and contacts have shared similar experiences of not receiving claims on time, of receiving no claims, and of receiving too little with no impact.
Many of my contacts have embraced African Insurance Inc. One of them bought a car recently. She did not call an insurance firm. She called her pastor. Another one called his imam. The other one drove to his village. Obtained a ‘’comprehensive insurance cover’’. These obstacles are competing against the insurance firms. With more Nigerians resorting to unorthodox means and African Insurance, can NIIRA curtail this tradition?
Well, NIIRA has promised to rectify the late and non-payment of claims. NIIRA, scars do not die. Scars live. But the introduction of technology is changing the narrative. Many insurance companies have embraced tech. They are pushing the envelope. They are breaking barriers. Through these outliers, insurance is accessible to artisans, market women, and students for a token amount.
Reputational damage
The insurance sector has suffered reputational damage. NIIRA might have come to mend it.
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