By Rosemary Onuoha

AMIDST fears and speculations of failure, the National Insurance Commission (NAICOM) has assured that Nigerian insurance industry can reach the N1 trillion Gross Premium Income (GPI) mark come year 2012 if there would be increased government support and the expansion of the retail businesses.

NAICOM had projected that by year 2012, it is expected that GPI in the insurance industry will hit N1.10 trillion against N200 billion realised in 2010 while a total of 250,000 jobs are expected to be created within the targeted period.

The Market Development and Restructuring Initiatives (MDRI) is the framework through which all these can be achieved, NAICOM had said.

The concept of MDRI is the development of the market through enforcement of compulsory insurances; restructuring of the system through a review of the channels of distribution as well as elimination of fake insurances while the main thrust is to build confidence of consumers in the Nigerian insurance market; promote public understanding of the insurance mechanism; increase the penetration from six per cent to 30 per cent by the year 2012 as well as grow the nations insurance density.

Others include enhancing the citizens’ access to relevant and affordable insurance products; as well as reducing the potentials for insurance firms to be used for financial crimes.

However, with 2012 just around the corner, there are speculations that the sector might not be able to achieve the projections at the expiration of the year. But some experts, who spoke to Vanguard, affirmed that the government has a huge role to play in helping the insurance sector reach the targets.

According to these experts, the fundamental and primary objective of insurance is to stabilise any economy as well as encourage savings and even stabilise the risk of government.

Group Managing Director of Royal Exchange Insurance Plc, Mr. Chike Mokwunye said that government needs to lend its support towards the growth of insurance in the country and assist it in deepening the retail end of the market because it is important to the nation.

In his words “The government should assist the insurance industry to develop the retail market because developing retail end takes time but with government support, it will be achieved.”

Mr. Wole Oshin, Managing Director of Custodian & Allied Insurance Plc stated that government needs to recognise insurance as is obtained in other economies where governments pick on insurance for progress.

In his words “Unfortunately government in Nigeria doesn’t even know insurance. This is a country where budgets are discussed and the insurance industry is not even invited. This goes to show that government does not understand the importance of insurance to the country.”

Mazi Okechukwu Unegbu, Managing Director of MaxiFund Investment Ltd. regretted that at present insurance is like an appendage to the Nigerian budget. He therefore charged the government to move insurance from an appendage to a force to be reckoned with in the scheme of things, adding “Things have to change.”

Unegbu reiterated that the Nigerian market is concentrated more on corporate business which is not ideal for the growth and deepening of insurance business in any country, stating that no insurance industry has ever attained a respectable penetration without life insurance being the dominant line of business.

He noted that if insurance is going to have meaningful penetration any where in the world, the life business must be more than the non-life, stating “Wherever you see the reverse, the penetration is low.”