By ABDUL OLALEKAN
Following the low public acceptance of insurance, about 58 underwriting companies across the country have agreed to generate N1 billion to use spend in order to increase insurance acceptance among Nigerians, Business247 has learnt.
Investigation shows that the low patronage of the insurance sector is seriously affecting the profitability of the operators, with some of them declaring consistent losses, while some of them who made profit are not consistent with it.
To this end, a source revealed that the insurance operators, under the auspices of Insurers’ Committee, had agreed to contribute money in a bid to rebrand the industry, as they believe that remains the only way to grow the sector and makes it contribute more to the country’s Gross Domestic Product (GDP) and economic development.
According to the source, ”All the companies, under the umbrella of the insurers’ committee have agreed to pull resources and promote the insurance business in the country”.
The source added: “We believe this will deepen penetration of insurance in the country. If you have more people convinced about the need to pick up insurance policy and they do, the companies’ premium will be increased and it will increase the industry’s contribution to the nation’s GDP.”
Currently, insurance sector is bedevilled with series of challenges that is limiting the expected growth and prospects of the industry. Currently, insurance sector contributes meagre to the nation’ economy, while the public acceptance of insurance products and services is relatively low, as operators struggle to win more people into buying insurance cover.
The current financial crisis, however, makes matters worse, as the already insured Nigerians are not ready to renew their covers, preferring to have quarterly or half-year cover than the yearly premium they were buying before.
Moreover, most of the listed insurance stocks on the floor of The Nigerian Stock Exchange (NSE) are selling below the par value as shareholders continue to dump insurance stocks.
On the other hand, for the past five years, majority of the operators have failed to either declare meaningful dividend or bonus to their shareholders, a development that stakeholders are unhappy about.
The rebranding project, Business247 learnt, is meant to change all these negative trends.
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