Deloitte has held an Insurance Transformation in Nigeria webinar, with the speakers upbeat about the growth of the insurance industry, competing favourably with peers in the financial services sector and becoming a driver of growth in the Nigerian economy.

The speakers were confident that insurance penetration will improve, whilst consumer confidence will rise on the new reforms in the industry. This is coming on the back of the new capital requirements for non-life, life insurance firms, and reinsurance companies.

The Director of Supervision at the National Insurance Commission (NAICOM) of Nigeria, Oluwatoyin Charles, said there is a bright future for the insurance industry as its contribution to the country’s Gross Domestic Product (GDP) will go up significantly.

“I believe that the country at large will benefit from that [recapitalization]. It is going to boost the insurance industry's contribution to GDP. I see increased penetration, digital efficiency. It will strengthen public confidence. I see a country paying claim as an appetite or normal thing to do in the insurance industry”.

While Dr. Fatai Kayode Lawal, Managing Director/Chief Executive Officer of Continental Reinsurance Plc is optimistic of an insurance industry that will be stronger, healthy and stable, making meaningful contribution to the country’s GDP, Niyi Onifade MD/CEO, Heirs Life Assurance Limited said “I see a big expansion in the insurance industry, I see a big trillion-naira industry in the next five years or so. I also see a digital-driven industry where policies will be 100% digital. I also see an industry where AI will drive our claim settlement.”

The Director General/CEO, Nigerian Insurance Association, Bola Odukale, for her part, said she foresees an insurance industry that can compete with its peers in the financial services sector and globally.

A Partner at Deloitte and a Fellow of the Actuarial Society of South Africa, Takalani Sikhavhakhavha, also wants to see a higher insurance penetration ratio in Nigeria and the African market. “We want to see the insurance penetration ratio of less than 1.0%, 0.5% doubling or tripling. We want to see the Nigerian insurance industry bigger; we want to see our insurance industry well-trusted”.

He is optimistic that the Nigerian insurance industry will attract more foreign entities, highlighting “we want to see claims settled faster; we want to see growth in consumer confidence. I think the insurance industry will be a bigger contributor to the GDP of Nigeria”.

Collaboration is Way Forward to Address Challenges

The speakers also identified teething challenges in the insurance industry, which they believe require collaboration to address them.

Dr. Lawal said, reinsurance is at the top hierarchy of the insurance industry and therefore, the 35 billion naira capital requirement is a necessary requirement to create a market that recognsies Nigeria as a leading market in the African region and economy. 

“This capital is the largest in the continent and pitches us with global reinsurance spaces. It also enhances the capacity of firms in this market to underwrite big ticket deals. The capital will also strengthen the financial viability of reinsurance firms and enable them to deliver better services.

Mrs. Odukale, also alluded that collaboration has been the word in the last few years. “In collaborating, we have been able to see changes within the industry. When it comes to combating the poor market conduct, collaboration on ethics and standards of professional conduct is very key, and it's part of the things we have been working on”.

Mrs. Charles also intimated that NAICON has set up a complaint bureau to resolve complaints. “We are on top of ensuring claims are settled. Trust is a necessity for all the stakeholders; it is the responsibility of the Commission, it is the responsibility of the companies to ensure trust is deepened”.

Mr. Lessi also pointed out that insurance firms must offer simpler and more accessible products if they are to increase insurance penetration. We need products in simpler languages to deepen the penetration. Secondly, the technology adoption is very critical in growing the market share and finally, what I think will take us there is strategic partnerships. We need to partner with fintechs and other companies that can give us reach to a wider audience for us to sell insurance easily”.

The webinar was moderated by Uyi Izekor, Partner, Assurance and West Africa Leader for the Financial Services Industry at Deloitte.