SPEECH OF THE HONOURABLE MINISTER OF FINANCE, MRS KEMI ADEOSUN AT THE NATIONAL INSURANCE CONFERENCE TAKING PLACE IN ABUJA, 10′ JULY 2017
INTRODUCTION It is my great pleasure to welcome you all to the opening ceremony of the 2017 National Insurance Conference. Insurance plays a critical role in economic development by fostering economic growth and investment. Insurance facilitates investment, by reducing the amount of capital that businesses and individuals need to keep at hand to protect themselves from uncertain events. While the Nigerian insurance industry has evolved with premiums growing from about N75 Billion in 2005 to over N300 Billion today,it contributes approximately 0.7% to GDP. This is less than the African average of 3.3% and the global average of 7%. Despite the challenges faced by the industry such asthe low level of penetration, low implementation of compulsory insurance and low level of professional capacity, these challenges, present great opportunities for growth. There are currently about 3 million policyholders in Nigeria out of a population of 180 million people.This means that there is a lot more potential to increase the number of policyholders.Through insurance, relatively small premiums from millions of policy holders, can create a pool to support long-term financing for our economic growth. We must be willing to expand the insurance market beyond the upper class and formally employed market, to the middle and lower income market. Doing this, means that our distribution channels must be innovative, considering product features, cost, proximity and all other relevant factors. Alternative distribution channels can also be considered including the use of aggregators to facilitate the sale of group insurance to an existing membership base e.g. market associations, savings cooperatives, and mobile network operators. Selling insurance policies can also be done through mobile phones. To achieve sustainable and inclusive growth, we must reach the rural areas and the unbanked. We must achieve financial inclusion.
Deepening insurance penetration through financial inclusion would include, developing the technical capacities to meet the emerging challenges of financial inclusion and micro-insurance. This therefore, calls for more dynamic strategies to deepen the insurance reach. Despite mandatory insurance policies such as 3rd party vehicle insurance, health care indemnity, group life insurance, etc., onlyabout 1.5% of adults have insurance. The focus for insurance going forward, must integrate both corporate and individuals. The uptake of insurance products could facilitate asset formation and wealth creation over the longer-term.Many individuals take out insurance to cover life, education plans for their children, endowment, and investment savings. There is also a high level of ownership of insurable assets in Nigeria despite the economic situation. We expect that Industry reforms will continue to drive investments and new market entry. Foreign investors have shown great interest in the Nigerian insurance sector by entering into the marketand progress can be seen in the introduction of new insurance products in the growing mortgage and housing sector.
To consolidate on progress being made, the Federal Government would play its part to ensure that Government assets are adequately insured. Through theVoluntary Asset and Income Declaration Scheme, we will also train insurance brokers and underwriters because these are the people who support individuals in obtaining insurance policies that hedge potential losses of wealth and assets. As the Federal Government, we appreciate the fact that the insurance industry isdynamic and creates employment and entrepreneurship opportunities at all levels. We will therefore, support this sector to continue to contribute effectively to sustainable and inclusive economic growth. Thank you for listening God bless Nigeria.