By ROSEMARY ONUOHA

With a population of 150 million, over 70 per cent of Nigerians have little or no from of insurance cover.
And in the face of growing insecurity and economic challenges in the country, experts are suggesting that bridges must be built between the insurance sector and the greater society to put faith in the products and premiums insurance offers as a means to hedge the economic downturns with its expertise, commitment and good will.

Mr. Victor Ogiemwonyi, an economic expert said that insurance should be a vehicle for national development. For insurance companies that don’t have strong re-insurance affiliation, Ogiemwonyi noted that such companies should do so because insurance business does not operate in isolation.

According to him, insurance companies should first, accelerate the strengthening of corporate governance; ensure greater harmonisation of internal controls with international best practices; mobilise resources through scaling up of regional integration initiatives; as well as strengthening human resource base.

The industry, according to Ogiemwonyi, can improve on its relevance to national development by designing and implementing micro-insurance schemes for low-income people because micro insurance is perhaps where it could make the greatest contribution to improving people’s quality of life.

While stressing that insurance is the backbone of any economy, Ogiemwonyi said that it is important that Nigerian insurance industry remains, as always, vibrant and innovative, creating a critical mass of revenue from a wider customer base and a more diversified menu of products thus stabilising the market.

For Modupe Adeboye Fadina of Mosfad Consults, the insurance industry as the professional risk bearer of any nation is an indispensable link in the chain of economic activities of a nation and in the general being of its citizenry. From the nature of the business, it is trite fact that confidence and trust are needed for it to function effectively, he stated.

Managing Director of Mutual Benefits Assurance Plc, Mr. Akin Ogunbiyi, said that insurance is the most effective means of reducing the vulnerability of the impacts of disease, theft, violence, disability, fire and other hazards. Insurance protects against unexpected losses by pooling the resources of the many to compensate for the losses of the few, the more uncertain the event the more insurance becomes the most economical form of protection, Ogunbiyi noted.

He said, “Policyholders only pay the average loss suffered by the group rather than the actual cost of an individual event; insurance replaces the uncertain prospect of large losses with the certainty of making small, regular affordable premium payments.”

He explained that the primary function of insurance is to act as a risk transfer mechanism, to provide peace of mind and protect against losses. Risk can be handled either by; assumption, combination, transfer or loss prevention activities. Insurance schemes utilise the combination method by persuading a large number of individuals to pool their risks into a large group to minimise overall risk.

Managing Director of Custodian & Allied Insurance Plc, Mr. Wole Oshin said that insurance companies should come up with meaningful products that can support the financial system other than the more traditional products. Operators in the sector should continuously increase the awareness of insurance across board as campaigns should go to the grassroots, villages, schools, governments etc, Oshin maintained.

For Ogunbiyi, there are many challenges facing the operation and management of micro insurance and over the years many schemes have failed. However, adapting to innovative techniques, experience and new knowledge, many micro insurance service providers have been able to achieve sustainability and visibility in the long term.

In his words “Given the fundamentals, the Nigerian insurance industry has a new and enormous market waiting to be explored and exploited for the attainment of relevance in economic growth and development.”