An insurance expert, Mr Mufutau Oyegunle, has advised insurance firms to design innovative products that would appeal to operators in the informal sector.
Oyegunle, the Managing Director of KBL Insurance Consultants in Lagos, gave the advice in an interview on Thursday in Lagos.
He said that innovative services were capable of raising the sector’s contribution to the GDP as those in the informal sector constituted over eight per cent of the country’s population.
“Insurance companies must provide innovative services for housewives, roadside mechanics and hawkers, among others.
“Such services will increase insurance penetration and contribution to the GDP to 15 per cent from the current inconsequential 0.3 per cent,” he said
Oyegunle also emphasised the need for the industry operators to shun the current trend of unhealthy competitions.
He said that due to unhealthy competition, many underwriters charged premium rate as low as one per cent, while others charged at 0.85 per cent rate instead of the standard rate.
“This is not good for our industry,” he said.
Oyegunle said the N16 trillion total asset base predicted by the Nigeria Insurers Association (NIA) for the sector by the Year 2020 could be achieved.
According to him, this is realisable if the industry’s potential is fully harnessed, especially if the untapped areas are looked into by the operators.
Mr Sunday Thomas, the Director-General of NIA, predicted the new asset base for the industry recently.
Thomas had said that NIA’s calculation had been widely corroborated by statistics and reports from globally acclaimed rating agencies.
Oyegunle said such target would be a wake-up call to operators to harness the potential that had been lying fallow.
Oyegunle said the major reason why researchers described Nigerian insurance sector as grossly untapped was because insurance firms only designed services and products for those in the corporate world.
He said less than one per cent of Nigerian housewives had insurance cover which had been in existence for close to a century.
