By Nnamdi Odumody
According to a 2018 survey by the Chartered Insurance Institute of Nigeria, 86.6 million people out of Nigeria’s adult population of about 100 million are excluded from any form of insurance cover.
The penetration ratio of the Nigerian insurance industry is at 0.5 percent in 2018. That is among the least in Africa compared with South Africa’s 17 percent, Kenya’s 2.8 percent and Ghana’s 1.1 percent.
The National Insurance Commission which is the apex regulator for the insurance industry has a target for Nigeria to become one of the world’s top twenty insurance markets by 2020. In 2018, the industry generated a Gross Premium Income of 448.6 billion naira which is expected to record 10 percent growth to about 493.4 billion according to Augusto and Co’s data.
Currently, there are over 12 million registered vehicles for motor insurance, fire insurance for households and manufacturing companies, annuities for retirees and life assurance policies for individuals while opportunities abound in ‘’Takaful’’ i.e. insurance for Muslims and other large scale economic projects across the nation.
Lack of trust, awareness, affordability of insurance products and services, easy access to insurance products, dishonesty amongst insurance practitioners, late payment of claims, refusal to settle genuine claims, ambiguous description of product details, cultural and religious beliefs, low level of innovation in product development, limited take off of takaful, microinsurance and bancassurance. More so, weak distribution channels, financial incapacity, high incidence of insurance fraud, low level of disclosure, prevalent unethical practices and inadequate industry database are some of the reasons why Nigerians don’t purchase insurance products as well as the underperformance of the sector.
The Nigerian Insurance Industry includes the following sub-sectors: Composite, Non-life, Life and Reinsurance operators. Over the last five years, the Nigerian Insurance Industry has grown at a compound annual growth rate (CAGR) of 11%, buoyed by increased capitalization as well as the introduction of policies aimed at promoting the local market.
Nonetheless, the industry remains challenged with low apathy from the Nigerian populace and weak policy enforcement practices, resulting in a low penetration ratio. These challenges however present enormous opportunities when benchmarked with other African countries especially South Africa. The industry has room to grow, if it can innovate
Coverdor which is Nigeria’s first digital insurance platform wants to make tech-savvy Nigerians access insurance anywhere and anytime from their mobile devices, and also manage all aspects of insurance transactions in real time.
Its users can easily insure their electronic gadgets and home appliances individually against mechanical, accidental and liquid damages directly from Coverdor’s platform or through online and offline point of sale or partner’s e-commerce website or retail outlet in Nigeria.
Using proprietary artificial intelligence technology, it completes a policy sales transaction and policy holder onboarding within 3 minutes and also processes customer claims in less than 3 minutes.
Coverdor needs to fix the friction and provide the last mile access to insurance services for millions of Nigerians without insurance cover. That is how the insurance sector will show a sustained promise.