Stakeholders in the insurance industry have attributed the lull in the economy to infrastructure deficits, explaining that the ecosystem calls for a deliberate effort to close the existing gap between the sector’s contribution and need for economic growth.
The stakeholders, agreed that there is a link existing among underwriting activities, infrastructure development and economic growth.
The Group Managing Director of NEM Insurance Plc, Tope Smart, at one of the industry forums in Lagos with other economy experts, affirmed that research has shown the linkage among insurance, infrastructure and economic growth, adding that they also lead to good quality of life and improvement in mortality rate and consequently, reduce death claims under life insurance.
“Infrastructural development is pivotal to insurance growth, even as insurance remains the backbone of any economy due to the basic role it plays, which is to restore people, firms, government to the position they were before the occurrence of any peril”, he said.
He contended that good roads will reduce the number of accidents, thereby, leading to reduction in claims on motor insurance, goods in transit insurance and Group Personal Accident Insurance, among others, but ultimately, lead to a better, stronger and healthier insurance industry.
“In addition, availability of data helps in the generation and preparation of good statistics that are useful in preparing rate guide for insurance. Good infrastructure will ensure this,” he stressed.
Saying it is very obvious that investment in infrastructure will result in the growth of the economy of any nation, he added that the attendant insurance needs resulting from such economic growth will be to the benefit of the industry.
But the Director-General of Infrastructure Concession Regulatory Commission (ICRC), Chidi Izuwa, who also spoke at the forum, said fixing the infrastructural deficit of the country requires a huge fund, which the country does not have at the moment.
He however, expressed optimism that if there is a right environment that allows for Public Private Partnership (PPP), where the private sector generates the fund, this challenge could be jointly addressed.
He said currently, insurance and
pension funds are invested in Federal Government Securities, but noted that it
will make more economic impact, if such funds can be channeled to fixing the
country’s infrastructure, although, that will require having the right recovery
mechanism that will allow the funding partners recoup their investments.
In another development economic experts have urged the newly-appointed Deputy Commissioners for Insurance to use their vast experiences to improve the industry for the benefit of mankind.
They noted that the insurance industry has a lot to offer Nigerians especially in the areas of job creation, and increasing the standard of living of the people if well positioned.
Recall that President Muhammadu Buhari recently appointed Sabiu Abubakar, and Oba Oluniyi, as Deputy Commissioners of Insurance, for the National Insurance Commission (NAICOM).
NAICOM in a statement, said Abubakar was appointed as the Deputy Commissioner, Technical, while Oluniyi would assist with the running of the Finance and Administration (F&A) also Department.
The statement further said, “Both appointments are effective from July for an initial tenure of five years.”
Abubakar had worked with the Commission as an Assistant Director before he left two years ago to join Takaful Insurance PLC as an Executive Director, a position he held until his new appointment, while Oluniyi held the position of the Director, Finance and Accounts of the Commission until his new appointment.
Speaking with The Guardian on the appointment, Prof. Omo-Ogun Ajayi of the Department of Agric Economics, University of Calabar, said, “The two gentlemen have all it takes to improve the industry following their long years of experience, they only need to be more focussed.”
Also contributing, the Head,
Institute of Fiscal Studies, Godwin Ighedosa, told The Guardian that if well
tapped, the insurance industry in Nigeria has the capacity to increase the
wealth of many Nigerians.
He said, “All the country needs is to further sensitize the people of the very importance of the insurance industry to nation building.”