By Ikeoye Oyetoro

It has been revealed that less than one percent of Nigerians make use of insurance services in spite of the passage of the Local Content Act.

GROUP Managing Director of Mutual Benefits Assurance, Mr Akin Ogunbiyi, who stated this in an interview with Vanguard, noted that the industry is still far from realising its potential as less than one million out of the 150 million population of Nigeria carry one form of insurance or the other.

According to him, Nigerians are yet to imbibe the culture of insurance even the most common form of insurance which is the third party act that according to the law of the country gives a better leverage to the road users more than the comprehensive insurance is not applied for.

He said insurance is very crucial and necessary in the developed countries because there is rule of law governing their operating environment and it is a credit economy where their daily transactions involves insurance as there is practically nothing you can do without insurance ranging from health, mortgage, car and life thus making everything about them a credit economy.

Ogunbiyi noted that due to lack of compliance and proper monitoring in Nigeria, people do not see insurance as a necessary requirement for daily living saying there is no rule of law unlike the developed countries where violation of law has a penalty and people adapt so well to those rules and ready to pay the necessary fine when those rules are violated without any one pursuing them before doing so.

The Managing Director said insurance has not really started in Nigeria because the corporate world which the real sector of any economy are not even patronising the insurance companies due to lack of liquidity from the banks saying banks capacity to fund the private sectors has been hampered due to the meltdown and the negative reform of no liquidity.

“Today, insurance penetration is relatively low in this country since the private sectors that patronises the insurance company do not have capacity to sustain which resulted to some of them shutting down and this has really affected us adversely saying government needs to provide a substantial amount for the productive sector which is the key to the economic growth and development of any nation.

According to him, insurance companies have to find other means of generating income rather than depending solely on he corporate world and the government insurance saying insurance companies should design means to increase penetration by coming with product and services that meet the needs of common man on the street.