INSURANCE: AFRICA'S CONTRIBUTION TO GDP RISES TO 15% â€“ NAICOM
Mr. Fola Daniel
The Commissioner for Insurance, Mr. Fola Daniel, has said that the African insurance industry has been witnessing growth, a development that has increased its contribution to the Gross Domestic Product of the different countries on the continent.
Daniel said this during a three-day seminar organised by the African Insurance Organisation on life insurance, which began in Lagos on Thursday.
Delegates from different African countries are attending the seminar.
Daniel said, 'African insurers are now counted among the top major economies of the world that have significant contributions to their Gross Domestic Product, ranging between five and 15 per cent.'
He noted that in the past five years, certain factors had made unprecedented positive impacts on the global growth and development of insurance.
These factors, according to him, include improving information technology, increasing efficiency in the way insurers do business and integrating the world's financial system, which now provides unparallel economic, cultural and recreation opportunities.
The commissioner said, 'These developments have combined very well with other factors to create new opportunities for insurance business in Africa. The African market, now more than ever before, is exposed to global exploration and competition.'
He noted that the benefits derivable from the life insurance business to the insured, insurer and the economies of nations, were enormous.
Daniel said that life insurance provided security to the insured, protection to their families and businesses, against the financial risks of death, illness and retirement, while also complementing government's effort in providing financial needs.
Daniel said that life insurance had become a source of long-term capital because it was a long-term business.
The pool of funds generated from premiums collected, he said, could easily be channeled or invested in infrastructure and other sectors like the manufacturing industry which is crucial to a growing economy.
This way, he pointed out, jobs would be created, while the larger economy would grow faster.
He, however, observed that life insurance penetration in Africa was still low, meaning that a greater percentage of the population was vulnerable to loss.
Daniel said that in Nigeria, the Commission had been responsive by identifying some major initiatives to drive market development.
He said, 'Our Market Development and Reconstructuring Initiative programme aims at creating increased awareness of insurance products generally and in particular, compulsory insurances of which group life is an integral part. It also aims at eradicating fake insurance because one of the biggest barriers to people buying an insurance policy is lack of trust.'