About 94.4 per cent of the country’s adults have no form of insurance, the National Insurance Commission (NAICOM), has said.
The Commission, citing the 2016 EFInA research findings, said insurance uptake of the adult population remains low at 1.9 per cent.
This means that only about two million of the adult population have one form of insurance or the other.
Speaking at the just concluded 2017 Annual Seminar for Insurance Correspondents organised by NAICOM in Kaduna, Kaduna State, Commissioner for Insurance, Mohammed Kari said there has been challenges and barriers hindering insurance penetration in the country.
Stating reasons behind the low insurance uptake, he said the distance of the insurance providers to the rural areas or the unreached is a common challenge.He pointed out that most companies are based in the city pursing corporate and government accounts.
In a paper presented by NAICOM Director, Authorisation and Policy, Agboola Pius, a large population of adults are financially excluded.
He said while 58.4 per cent are financially served, 41.6 per cent representing, 40.1 million adult are financially excluded.
Quoting the 2016 EFInA research findings, he added that banked population is 38.3 per cent, representing 38.9 million.
He stressed that while 14.9 per cent said they have nothing to insure, 10.1 per cent said they have no reason to insure.
He said out of those who do not believe in insurance, 12.2 per cent do not know the benefit of having one while 6.8 per cent believe insurers do not settle claims.
But some, he said, cannot afford to pay for insurance. In this category, 10.8 per cent do not know where to go to get one and three per cent believe God will take care of what they would need to take a cover.
He said apart from distance which is a challenge to getting many people insured, there is also the issue of inappropriate products, insurance distribution, low income and unreached customers; low awareness, and inadequate services and deployment of inappropriate technology or no technology at all.
On initiatives needed towards enhancing insurance access to the unreached, Agboola noted that there was need for the transformation of the informal and quasi–informal group into a formal group through appropriate distribution channels.
He said: “There must be appropriate and sustainable distribution channels that recognise these groups as necessary. The regulator (NAICOM), having noted these gaps and has started developing appropriate framework and guidelines in many areas such as NGO/Community Based/Trade Associations; Microfinance Banks; independent agents, among others. The Commission has exposed few of the Guidelines.
“Other initiative needed is minimum documentation and Know Your Customer (KYC) requirement; collaboration between the regulator and state governments and other Federal Government agencies; innovative and appropriate technology; and co-ordinated insurance consumer awareness and education.