Stakeholders in the insurance sector have disclosed that foreign brands in the sector find it difficult to survive in the industry in Nigeria.
The Director-General, Chartered Insurance Institute of Nigeria, Mr. Richard Borokini, told our correspondent, in an interview, that most of the foreign insurance brands had not impacted much on the sector, owing to the peculiar nature of the Nigerian operating environment.
He said, “For you to operate here, you have to be able to understand the peculiarity of the environment. Largely, if you look at it, the first 10 insurance companies are still companies that are locally bred, but that is not to discourage foreign investors from coming in.
“The insurance penetration in Nigeria is still low, and because the penetration is low, there is the potential for anyone to come in. So, let them come in, if they are able to bring innovation to increase insurance penetration, which would be good.”
The immediate past Managing Director, African Alliance, Mr. Alphonse Okpor, also confirmed in an exclusive interview with The Point that the major barrier to the growth of the industry was the perception of Nigerians, as most people believed insurance was for the rich.
According to him, several Nigerians believe life insurance, which says an average man takes a life insurance that is 10 times higher than what he could possibly make in his lifetime, is meant for the rich alone.
He said, “The perception that insurance is meant for the rich is wrong and has to change. Nigerians are not very receptive to life insurance because they think life insurance is for big men. Some say if you take life insurance, you will die.
“In the North, life insurance is regarded as Haram (abomination). Their argument is that, life insurance is a sin but we have tried to disabuse their minds. We have introduced Islamic insurance in order to educate the people in the North on the benefits of engaging in insurance patronage.
“We told them that in the Holy Quran, which we read, Allah says it is better to die and leave your children happy with money than leave them begging for bread; and the best way to provide for your dependents is insurance.”
Borokini, the CIIN boss, added that some Nigerians shy away from insurance as a result of the economic lull witnessed in the country.
While he admitted that poverty could affect the sector, the CIIN boss insisted that Nigerians should not shy away from exploring the various opportunities available in the insurance sector, saying that the enforcement of compulsory insurance in the country was weak.
He said, “A lot of Nigerians hide under poverty to subscribe to fake insurance policy certificates. Instead of going to a registered insurance company to buy genuine insurance policies, some people decide to go and buy fake insurance policies from the port. If Customs officials would ensure that every importer carries a genuine insurance cover, then there won’t be any fake insurance policy.
“The same is with motor vehicles particulars. Enforcement is also weak, because at the place where these documents are issued, there is always a racket, and definitely it is at the licensing offices where vehicle particulars are issued. There, some cabals operate, giving fake insurance certificates.”
