Nigerian insurance experts have raised the alarm over an estimated ₦1 trillion annual loss in the industry due to low insurance penetration and policy uptake by the citizens.
Worried about this development, stakeholders have called on the National Insurance Commission (NAICOM) to enlist the services of law enforcement agencies to achieve effective implementation of the compulsory insurance policies in Nigeria to further deepen insurance acceptance and equally grow the nation’s Gross Domestic Product (GDP).
Those who commented on the low insurance penetration noted that aside involving law enforcement agents to drive and recover the N1 trillion yearly loss in the sector, regulators should also collaborate with the federal and state governments to ensure proper implementation and enforcement of compulsory insurance scheme.
Reports have it that the insurance market has the potential to generate about ₦30 billion premium from each state in Nigeria if only the seven mandatory insurances can be adopted.
The compulsory policies stipulated by the Nigerian Insurance Act of 2003, include the Motor Third Party, Employee Group Life, Health Care Professional Indemnity, Insurance of Public Buildings, Buildings Under Construction, Aviation Third Party Insurance and Marine (Cargo).
These laws were endorsed by the (NAICOM) about 10 years ago through its project on Market Development and Restructuring Initiative (MDRI).
The Director-General, Nigerian Insurers Association (NIA), Mrs. Yetunde Ilori, told Daily Sun, that compulsory insurance includes liability policies formulated by the government meant to protect the people against accident, death and infringement of their rights in the course of other people’s activities.
“We have obligations towards other people thus, with the compulsory insurance policies government’s aim is to ensure through the law that our responsibilities either by driving our vehicles on the road, employing people in organisations, or through services we render to others are safeguarded in case anything happens by the virtue of risks they are exposed to.
“It is to ensure that the risk exposed to others when it crystallizes, the people that are either injured or suffer any loss have financial compensation at least to mitigate the loss that they incurred”, she said.