The Untapped Potentials Of Insurance In Nigeria

Nigeria is one of the most populous countries in the world. But it’s insurance sector is underutilized. There’s a lot insurance can do for 180 million people. Insurance often functions as an assurance to otherwise hesitant investors.

But people are often afraid because there is this perception that if you insure a thing with the wrong insurance company, if it comes to time to be paid, the insurance company may not pay up.

Hence, people are often advised to find ‘a reputable insurance company’. There is often not a proper guide to finding a reputable insurance company.

That’s the problem. The regulatory and self-regulatory enforcement that should make reputable the norm and not the exception is often lacking.

This is a pity because it limits the growth potentials of the insurance sector. Businesses like banking and insurance deal a lot with trust.

It also hurts the economy. The other day, I wrote about some fish farmers that lost hundreds of millions to floods. They had no other recourse but to lean on government for possible bailout.

Wether this bailout happens or not may depend on their ability to lobby the government. Meanwhile, if they had wide insurance coverage of their business, they would be able to bounce back quickly and with more certainty.

What Needs To Be Done?

The insurance sector needs to do a deep appraisal of where they are now, and where they ought to be. Perhaps its time to lobby for more enforcement of the regulations that would build more trust of Nigerians in their services.

Or perhaps, it’s time for more robust self-regulation.

In any case, to move from where they are now to where they ought to be, they need to take some steps and be seen to take those steps by Nigerians. It’s therefore also time for more brand awareness and PR from the sector, to tell Nigerians their story in a proactive manner that builds trust.

Maybe it’s also time for enterprising foreign investors with integrity and an appetite for calculated risk to dive into the market to profit but also to inspire.

Of course, one of the things that insurance companies fear in opening up is fraud. To tackle fraud there is need for more meaningful engagement with law enforcement.

The government needs to be convinced of the need to build capacity among law enforcement in discovering and prosecuting cases of insurance fraud.

If the sector is built up, it will greatly benefit the economy. In an economy where getting capital is already hard, there should be protections like insurance to ensure that if capital is lost due to unforseen reasons, businesses can easily bounce back.