Ebere Nwoji
Operators in the Nigerian insurance and pension sectors have been advised to leverage the opportunities thrown up by the COVID-19 pandemic to grow the sectors and contribute to the national economy.
The operators were also charged on creativity and innovation in their products development and service delivery by focusing on meeting the needs of the people for enhanced financial capacity.
A former Director-General, Lagos State Pension Commission (LASPEC), Mrs. Folashade Onanuga, made the call while delivering the theme paper at the 2021 National Conference of the National Association of Insurance and Pension Correspondents (NAIPCO)
The theme of the conference was: COVID-19 Impact on Financial Inclusion: Opportunities for Insurance and Pension Sectors.
Speaking at the conference, Onanuga said while the pandemic had caused severe disruptions, opportunities have also been created to grow customer base on account of the obvious fact that there is no real social security arrangement by government in the event of sudden and unexpected events and so citizens needed to make plans by themselves for wellness both in business and family life.
According to her, “Economic shocks like sudden loss of job, illness or death can send people living just above the poverty line into abject poverty. The sudden and unforeseen calamities created by the pandemic have highlighted the need to plan for unforeseen circumstances and even early retirement.”
To take advantage of these opportunities, Onanuga, said the pensions and insurance industries must remain committed to the inclusive growth of the Nigerian economy, creating opportunities for lower income groups to be part of the broader financial system.
She noted that financial inclusion could be achieved when adult Nigerians have access to affordable financial products and services that met their needs.
“Financial inclusion can only be achieved when financial transaction processes and documentations are transparent, simplified and seen as meeting needs of the people and at the same time being beneficial to the financial services sector,” she said.
She said opportunities exist to increase insurance penetration and the customer base, both in the retail and corporate segments of the market if the right moves were made.
She noted that insurance penetration had remained at an average of 0.4 percent of GDP driven largely by a general lack of understanding and awareness of the benefits of insurance products, specifically amongst low-income Nigerians.
She added that finance operators needed to build trust, noting that the banking sector had managed to bridge this gap to an extent.
“Attempts have been made to improve the performance of the insurance industry through regulation and legislation – new capitalisation requirements have been announced and reviews of several key laws are being discussed to bring them up to current realities”, Onanuga added.
