The Commissioner for Insurance, Mr Sunday Thomas, says insurance penetration in Nigeria is expected to move from the current rate of 0.4 percent to 2.1 percent by 2033.
Thomas stated this on Wednesday while delivering an opening address at the 2023 Insurance Directors’ Conference organised by the College of Insurance and Financial Management (CIFM) in Lagos.
The theme of the conference is: “The Board and Insurance Business Sustainability”.
He noted that deeper insurance penetration would substantially improve the rating of the Nigerian insurance market in the global insurance map.
According to him, this will be made possible in line with the recently launched Nigerian Insurance Industry 10 Year Strategic Transformation RoadMap.
The commissioner said the strategic roadmap was expected to revolutionise the insurance sector with a well coordinated implementation approach.
He noted that following the industry’s strategic transformation roadmap, the sector sought to continue its transformation journey along seven strategic thrusts with the objective of achieving the corresponding goals.
Thomas listed the strategic thrusts as: transforming the regulatory environment to sustain the industry growth, transition to risk-based capital model and promoting insurance awareness and adoption.
He also mentioned that it would broaden insurance product offerings and improve effectiveness of distribution channels, enhance digitalisation of the insurance industry and deepen the industry’s talent pool and capabilities.
According to him, the sector will support Nigeria’s economic transformation and sustainability agenda.
The commissioner noted that with respect to the performance and potentials of the insurance sector, the industry had over the years, experienced an average steady year-on- year growth of 15.1 per cent in premium income.
According to him, this is, however, far below the opportunities provided by the Nigeria economy.
Thomas noted that the cumulative assets of the Contributory Pension Scheme(CPS) was in excess of N17 trillion, hence, the insurance sector’s need to maximise its share of the growing fund.
He stated that the insurance sector must urgently transit from its current position of being perceived as “too conservative” to the reality of the current and emerging environment.
The commissioner said this required proactive and dynamic disposition to effectively shrink the resulting volatility and uncertainty.
Thomas charged the industry’s board of directors on the need to support government’s drive toward reviving the economy and derisking individual and business ventures.
He emphasised that in pursuit of the drive by President Bola Tinubu toward a thriving economy, the insurance sector must be strengthened to play its role in realising the laudable national objective.
“The Nigeria insurance industry Boards of Directors are please requested to join the commission in its quest at making a difference.
“The commission is very mindful of our collective responsibility to ensure that insurance institutions prosper.
“It is in that prosperity that lies our attainment of our regulatory objectives of safeguarding insurance stakeholders as well as contributing to the stability of the financial system,” he said.
In his address, Mr Edwin Igbiti, President, Chartered Insurance Institute of Nigeria (CIIN) said that it is the responsibility of the board of directors to ensure that insurance remained a viable and sustainable industry for the benefit of all stakeholders.
Igbiti noted that sustainability had become a critical agenda in all sectors, and the insurance industry was no exception.
He said: “We are faced with the challenge of balancing economic growth with environmental and social responsibility.
”Fortunately, technology offers us unprecedented opportunities to create positive change,” he said.
According to him, technology enables greater efficiency and productivity in insurance operations.
Igbiti stated that by embracing digital transformation, insurers could streamline processes, reduce paperwork, and eliminate unnecessary waste.
He noted that automated workflows and digitilised documentation not only saved time and resources but also contributed to a more sustainable business model.
“To drive insurance sustainability, we must start by rethinking how we assess and manage risks.
“Technology plays a pivotal role in this process, we can more accurately assess risks and tailor insurance products accordingly.
“By leveraging real-time data, insurers can identify vulnerabilities, anticipate potential losses, and proactively manage risks.
“This not only benefits the insurers themselves but also promotes sustainability by encouraging preventive measures and reducing the overall environmental and social impact,” he said.
Igbiti commended CIFM under the leadership of its Rector, Dr Chizoba Ehiogu for organising an insightful conference.
BRANDPOWER reports that no fewer than 150 board of directors of insurance companies in the country attended the conference. Insurance penetration has generally been cosidered too low in Nigeria.