Insurance industry records negative growth in Q2
The Insurance industry has witnessed ‘strange’ negative growth of eight per cent in Second Quarter, 2023.
This is despite growth witnessed in other financial institutions during the period.
Economic expert and Chief Executive Officer, Centre for The Promotion Of Private Enterprise (CPPE), Dr. Muda Yusuf, explained the observation while delivering a paper entitled, “New Political Dispensation In Nigeria: Setting Agenda For The Insurance Industry” at the Mid-Year Workshop of the Nigerian Council of Registered Insurance Brokers (NCRIB) Lagos Area Committee in Lagos.
He noted that the industry had since Second Quarter, 2021, been growing impressively until the negative growth of eight per cent which he described as strange.
Yusuf added that, “We saw a negative growth of eight per cent. I don’t know what happened. It is strange to me because financial institution in the country grew in First Quarter, 2023.
“It was only insurance that dropped by eight per cent and I can’t phantom what caused the contraction. But generally, the trend has been positive.”
He further stated that insurance penetration was one of the lowest globally and players and policy makers needed to do better.
He chided the industry players and policy makers for not participating fervently in policy formulation and advocacy.
“There were many opportunities to enhance if they advocate and participate in the Federal Government’s policy formulation,” Yusuf said, as he challenged them to put what they need in terms of policy on the table for government to help make it work and grow the industry.
“However, there is need for compliance on the policy of compulsory insurance, we cannot have a policy or a law that is existing just by the word of mouth.
“So, this should come first when we are talking about setting an agenda. The pension industry is thriving because of regulation. It’s also good because of voluntary compliance and that’s the regulation that you have to comply with,” he said.
According to him, “This is not happening in the insurance space because there is no compliance. It is normal not to comply. I think the players have to think of this as a major duty to engage the authority to develop a framework for enforcement of this compulsory insurance because for me, this is the low-hanging fruit for the industry.”
Chairman, NCRIB, Lagos Chapter, Ademola Olutusin in his welcome address, said precisely in May, this year, the country ushered in a new government in both Federal level and states with the hope that the policy of this new government would favour the industry.
