Confab raises alarm over low insurance patronage

The Central Bank of Nigeria (CBN) and other members of the financial sector, participating at the two-day National Financial Inclusion Conference have decried the low patronage of insurance products in the country.
The Director, Consumer Protection Department, CBN, Mr Kofo Salam-Alada made this known while presenting highlights of the Conference Communique to newsmen in Abuja.
Salam-Alada said that participants at the conference believed that insurance culture should be imbibed by Nigerians as it holds the key to poverty alleviation among poor and rural dwellers.
He said that in their discussions on financial inclusion, it was observed that there was currently more awareness about banking and other similar financial services than insurance.
He said that it was for this reason that of all the financial services, insurance was one of the least patronised products.
“We have agreed to put together a delegation to visit the regulatory agency for insurance that is the National Insurance Commission.
“We will also visit the insurance associations to look at the strategies they are working on to advance insurance for financial service penetration.
“The participants also identified the need to deepen legislative backing for the insurance industry in addition to the existing compulsory insurance like the third party insurance,’’ he said.
In addition, Salam-Alada said that micro insurance scheme could be used as a tool to achieve financial inclusion and assist the industry to cover the gap between insurers and the grass root population.
The Director also spoke on the findings by Enhancing Financial Innovation and Access (EFInA), which shows that the North-East and North-West patronises financial services the least.
“We recognised that the North-East and North-West have low financial penetration and this was attributed to cultural and religious factors.
“So the conference resolved that providers of financial services should be encouraged to device more products that will be acceptable in these areas.
“In addition to that, stakeholders using our various platforms will also devise programmes that will appeal to the people in the regions and bring them into the inclusion bracket.”
Salam-Alade urged financial service providers to consistently deliver good services to their customers so that they in turn will not discourage others to use these products.
According to the EFinA 2018 survey, 63.6 per cent of Nigeria’s adult population have access to financial services, while 36.6 per cent are still financially excluded.
EFinA is a non-governmental organization and a financial sector development organization funded by the DFID and Bill and Melinda Gate Foundation.
The survey was anchored on several indicators including Banked Population; Remittances; Savings with a Bank; Payments; Received Income; Loan with a Bank; and Banking Agents, among others.
According to EFInA, 60.1 million Nigerians do not have a bank account, 96.3 million do not use mobile money and 97.9 million do not have insurance.
The EFInA survey report concluded that three factors of affordability, institutional exclusion and lack of awareness were the biggest obstacles to financial inclusion