Insurance operators in Nigeria have been significantly affected by a weak economy and limited access to foreign exchange, leading to high operational costs. This was revealed by Olusegun Omosehin, Chairman of the Nigerian Insurers Association (NIA), during the association’s 52nd yearly general meeting held in Lagos. Omosehin acknowledged that despite the economic downturn that affected all aspects of national life, the Nigerian insurance industry managed to make progress.
The lack of access to foreign exchange and the continued depreciation of the Nigerian naira have contributed to the challenges faced by insurance operators. These factors have resulted in increased costs of operations and hindered the industry’s potential for growth. Omosehin also highlighted that the insurance sector has been impacted by the economic and socio-political issues prevailing in the country over the past year.
Despite these challenges, underwriting companies were able to achieve significant growth in premium income. In the previous year, they recorded a 33.9% increase, with premium income reaching approximately N726.2 billion compared to N569.1 billion in 2021. Omosehin expressed his appreciation for the shareholders’ recognition of the board and management’s successful efforts to position the association for increased growth.
Emphasizing the need to deepen insurance penetration, Omosehin pledged that the NIA would continue to collaborate closely with the National Insurance Commission (NAICOM) and other stakeholders in the financial and technology sectors. The aim is to promote insurance and enhance its contribution to the country’s gross domestic product (GDP). By working together, they will explore opportunities to leverage financial and technological advancements to expand the insurance industry’s reach and impact.
The challenges posed by a weak economy and foreign exchange scarcity are critical issues that need to be addressed. The Nigerian government and relevant regulatory bodies should consider implementing policies that create a more favorable operating environment for insurance operators. This includes measures to enhance foreign exchange accessibility, stabilize the currency, and improve overall economic conditions.
Furthermore, collaborations between insurance companies, regulators, and technology-focused entities can help increase insurance penetration. By leveraging digital solutions and innovations, the industry can reach a wider customer base and improve the overall insurance experience. This will contribute to increasing awareness about insurance products and services across the country.
As the Nigerian insurance industry navigates the complexities of the current economic landscape, concerted efforts from all stakeholders are required to overcome the challenges arising from the weak economy and FX scarcity. By fostering an enabling environment and embracing innovative solutions, the industry can position itself for sustainable growth and make a more significant contribution to the country’s overall economic development.
