Uptake, poor government drive on compulsory insurance killing sector—IEI boss
The Interim Managing Director/Chief Executive Officer of International Energy Insurance Plc, IEI, Mr. Peter Irene has raised a red flag on the factors frustrating the growth of Insurance industry in Nigeria.
In an interview, he said “The number one challenge is poor penetration,” stressing that “Globally, Insurance is predicated on a pool of large numbers and if you do not have the large numbers you cannot build capacity”.
However, he noted that “Nigeria’s insurance market lacks capacity because many people are not insuring and I believe the quick growth area lies with government enforcement of compulsory insurances”.
“The lack of capacity accounts for the shipment of businesses abroad despite local content laws. Building local capacity entails having more businesses and individuals insuring. Compare insurance to pension; they have built a war chest of over N7trillion.
“They have been able to do it because of government enforcement. Insurance is a form of saving too but they have not done well because of lack of government support and today contribute less than one percent to GDP. When you look at it that insurance has been in this country since the early 20th century, if we have been saving, this country would have been rich. However, there appears to be more seriousness now with the current government trying to enforce the compulsory insurances.
On the future of IEI, Irene averred that “One of the tasks the interim board will undertake is to recapitalize the company and the moment the new investor comes in, the interim board leaves”. “The moment we resolve the Daewoo loan and get a new investor, our job is completely done and we will leave. We have set our timelines up to December and looking forward to a discussion with NAICOM to get their approval.
He revealed that IEI has a lot of prospects, stressing that “The PFA as a subsidiary is doing excellently well and I believe many investors will see the company as a good buy”.
