The rate of growth of the Nigerian Insurance Sector has been a subject of discourse for several years. It is a fact that insurance penetration in Nigeria is abysmally low. Contribution to Nigeria’s Gross Domestic Products (GDP) is below 1.0 per cent and Premium Per Capita (Insurance Density) hovers between 5% and 10% as against 40-50% for other developing countries and 90-98% for developed countries.
In spite of its huge population and the immense potentials to contribute to economic development, the Nigerian insurance industry trails Namibia, South Africa and most African countries. Although insurance practitioners and operators are well aware of the problem, unfortunately they have been mouthing the solutions. It is common to hear cliches such as: ‘the retail market holds the ace’. It is all motion without movement!
Rather than take major initiatives to unlock the unlimited potentials that abound in the market. what you see is stiff competition for public sector accounts and tweaking around pricing. This has fueled unethical practices in the industry and encouraged conservatism. Not satisfied with way things are, Insuranceadvicenigeria.com through research, has identified three major areas where insurance companies can unlock the market and indeed stand out.
- Takaful Insurance
- Agric Insurance
Takaful is an Arabic word meaning “guaranteeing each other” or “joint guarantee” Theoretically, Takaful is perceived as cooperative insurance, where members contribute a certain sum of money to a common pool. The purpose of this system is not profits but to uphold the principle of “bear ye one another’s burden.