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.
The Director-General of Infrastructure Concession Regulatory Commission (ICRC), Chidi Izuwa, who also spoke at the forum, said that Public Private Partnership (PPP) can help in Fast tracking the infrastructural development of the country. He 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 channelled to fixing the
country’s infrastructure, although, that will require having the right recovery
mechanism that will allow the funding partners recoup their investments.
Also contributing, the Head,
Institute of Fiscal Studies, Godwin Ighedosa, said that if well tapped, the
insurance industry in Nigeria has the capacity to increase the wealth of many
He said, “All the country needs is to further sensitize the people of the very importance of the insurance industry to nation building.”