Expert: Insurance Sector Has Biggest Untapped Opportunities in Nigeria Economy

Ebere Nwoji

Investment expert and Chief Economist, United Capital Plc, Mr Ayodele Akinwunmi, has said that Nigerian Insurance sector has one of the biggest untapped opportunities among other sectors of the economy.

Akinwunmi, who stated this while presenting a key note address on Post – Recapitalisation and Market Dynamics in Insurance and Pension Sectors at the Annual National Conference of the Nigerian Association of Insurance and Pension Editors (NAIPE), noted that the winning insurers in Nigeria’s next decade would be those who deploy capital into underwriting excellence, inclusive products, digital infrastructure and productive long-term investment, not those who simply hold the largest balance.

He noted that at 0.4 percent to 0.5 percent of GDP, Nigeria’s insurance penetration was one of the lowest in the world and that made it one of the biggest untapped opportunities.

He said a post -recapitalisation transmission mechanism in Nigeria’s insurance industry would witness stronger insurers, deeper markets and a more resilient Nigeria.

According to Akinwunmi, with recapitalisation, there will be stronger capital and risk- based solvency which would give rise to higher minimum capital and stronger balance sheets, compliance with risk- based capital requirements as well as greater resilience to shocks.

He also said with the new capital,Nigerian underwriters would have the ability to underwrite larger and more complex risks, retain greater portion of domestic risks, they would reduce reliance on foreign reinsurers as well as provide support for key sectors such as energy, infrastructure, SMEs, retail and agriculture.

He further noted that with the new capital, the industry would witness the use of digital platforms and wider distributors, data driven pricing and underwriting , introduction of innovative products for micro, retail , parametric , Takaful and other specialised Products .

He further said in the face of the new capital, the operators’ services would be automated and straight- through claims processing as well as improved customer experience and operational efficiency.