Less than 2% of Nigerians Have Insurance Cover

The Director General of the Nigeria Insurers Association (NIA), Mrs. Yetunde Ilori, on Tuesday lamented that 100 years after the insurance business was introduced in the country, only 1.9 percent of the adult population in the country has insurance cover.

She also disclosed that the insurance industry contributes less than one percent to the Gross Domestic Product (GDP) of the country.

Ilori, who disclosed this at the launching of the Access to Financial Services in Nigeria 2018 Survey by the Enhancing Financial Innovation and Access (EFINA) held in Lagos, said some of the key factors inhibiting the growth of the industry are apathy and low knowledge of the instrument by the people and economic factor due to a decline business penetration.

The DG NIA said even though the insurance industry is one of the important sectors in the financial services area, it has not been able to meet the 40 percent growth rate target.

Ilori, therefore, said as part of efforts to meet the Vision 2020 goals of the industry, the sector is aiming at a modest 2.1 percent growth rate within the next two years.

Meanwhile, the EFINA report has found that of the 44.3 million businesses owned in the country, agriculture account for 29.3 percent, while artisans and retail traders account for 21.2 percent and 19.1 percent respectively.

According to the report which was presented on behalf of EFINA by Oluwatomi Eromosele, a research officer and Damola Owolade, the construction industry accounts for 6 percent while the services sector is 12.6 percent.

The report has it that most of these businesses are characterised by survivalist syndrome as most people move to set up their small scale businesses because they had to do something.

The report stated that this is due to the fact that the formal sector of the economy is only absorbing just 8 percent out of the adult population of 99.6 million people.

The report raised the alarm on the implication of this on the country given the fact that 56.7 percent or 58.9 millions of these people are 35 years or younger.

It therefore suggested that Nigeria must find a way to include this people in the scheme of things by encouraging them to go into entrepreneurship.