By Rosemary Onuoha
As the insurance industry digs deep into the recapitalisation programme set to terminate by mid-2020, an industry analyst has hinted of a possible threat to the benefits of a successful programme.
Speaking to Vanguard on the sidelines of the release of its report on the insurance industry titled, ‘From Lagoon to Ocean’, Head of Research at Coronation Merchant Bank, Mr. Guy Czartoryski, said that if the current poor perception of the industry does not change, the sector could face the challenge of where to deploy the huge capital raised.
Czartoryski stated: “By June 2020, the insurance industry will be more capitalized than it is now. However, insurance companies can only put the capital to good use if the negative perception about insurance by Nigerians change and they embrace insurance. If more Nigerians don’t embrace insurance by June 2020, the insurance sector could face the challenge of where to deploy the capital.”
Accordingly, Czartoryski said that for the insurance industry to thrive, its products and services should be bundled into products that Nigerians buy.
He stated: “In India, the insurance sector is well advanced than that of Nigeria because the regulator made conscious efforts to integrate insurance into products that people were already buying. If such can be replicated in Nigeria and insurance is bundled into products and services that people already buy and insurers are made to settle claims as they arise, then the sector will grow.”
Czartoryski said that when claims are settled promptly, it will increase insurance awareness and acceptance as well as build trust.
He also said that the sector can grow if it can leverage on the already existing technology platforms as well as distributions partnerships of other sectors.
He further stated: “We think the insurance sector can enjoy the same level of growth if it can leverage on the already existing technology platforms as well as distributions partnerships with banks and telecoms to roll-out insurance products.
“NAICOM’s reform will address an industry that today is small, fragmented and not very profitable.
Of course, it could continue to stagnate in the years to come but that would be a waste of the capital being raised to meet the current regulatory initiative, frustrate the experience of strategic investors (domestic and foreign), leave existing technology unused, and allow Nigeria to fall further behind its peers. On the other hand, given fresh capital and renewed regulatory cooperation, the industry can leave the stagnant lagoon and make waves in the blue ocean.”