Agusto & Co charges underwriters on opportunities in job loss

A financial institution rating agency, Agusto & Co, has identified insurance opportunities in the current job loss in the country.

A team of analysts who spoke at the presentation of Agusto & Co research report on Nigeria’s Insurance Industry Outlook, in Lagos State, noted that though the current economic recession is forcing most companies to downsize, with most workers losing jobs, they believe it is an area of opportunity for insurance companies, if they can develop products along this line.

Analyst, Ada Ufomadu, said: “Evolving risks such as job losses, cyber risk among others offer prospect for the development of new insurance products.”

Believing that  government spending in construction could support growth in insurance industry, in the area of bonds, group life, workers compensation, among others, micro insurance, she added, is equally expected to gain traction on the back of a large populace which remains outside the insurance coverage.

The rating agency, she stressed, expects Gross Premium Income (GPI) of the insurance industry to rise by eight per cent in the current year, hinged on a probable devaluation, infrastructure spending and continued growth in life business.

She said there was an expected increase in motor GPI arising from asset revaluation, although growth will be tampered by a switch to cheaper motor insurance covers, such as third party insurance.

Profits will be upheld by increased investment income due to rising interest rates; but moderated by rising claims payments.

Saying that about 28 per cent of the GPI generated, which is N100 billion was estimated to have been used to pay claims in 2016, she pointed out that this helped businesses and individual rebuild and recover from losses quickly.

On his part, senior analyst at the rating agency, Mr. Muyiwa Jesuro, noted that the firm’s research shows that mistrust of insurance companies, non-awareness of insurance benefits, low purchasing power and religious reasons are key disincentives for insurance products in Nigeria.

”Most respondents were either satisfied or indifferent about their current policies, pricing of products and customer services being offered, while motor, health and life insurances had the highest level of satisfaction,” he pointed out.