I am delighted to be with you this morning on the occasion of your annual seminar being hosted by Nigeria. I commend the organizers for their efforts at putting together this event against all the odds.
You may all agree with me that the AIO has indeed come a long way and has been able to establish itself as a very important body in the continent.
Today’s forum offers opportunity to insurance practitioners in Africa to attempt to discuss identified lapses in the market and how best to address them. It also affords you the benefit of interaction and exchange of business information in order to keep abreast of developments in other jurisdictions.
The choice of theme “The Art of Life” for this seminar is very apt as it tends to dissect the essence of Life insurance. I have no doubt in my mind that at the end of the day, we shall all leave here with a sense of fulfillment that the time spent her was worth the while.
I say this because having glanced through the list of high profile speakers selected to share their knowledge with us at this seminar, there could only be one result – value added interactions.
It will not be out of place to state here that in the complex field of risk management, insurance has become universally recognized and accepted as the most efficient response to human attempt to provide for tomorrow. It is therefore noteworthy that no modern economy can either survive or prosper without the active support of a disciplined and viable insurance industry.
Suffice to also say that a disciplined insurance industry will always be mindful of cost of doing business and the need to generate appropriate premium requisite to meet obligations and the satisfaction of other stakeholders.
I am glad that some African countries are now counted amongst the top major economies of the world that have significant contributions from the insurance sector to their Gross Domestic Product (GDP) ranging between 5 – 15%. One of such African countries is South Africa.
In the past five years, certain factors have made unprecedented positive impact on global growth and development of insurance. These factors include but not limited to advancement in Information Technology, increasing efficiency in the way we do business and integration of world financial system which now provide unparallel economic, cultural and recreational opportunities.
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.
There are no doubt the benefits derivable from Life insurance business to either the insured, insurer or the economies of any nation are enormous. For the avoidance of doubts, permit me to quickly mention some of these benefits. Besides the fact that Life insurance provides security to the insured, their families and businesses against the financial risks of death, illness and retirement, it complements and supplements any effort by government to provide for the financial needs of its population.
Because Life insurance is a long term business, it becomes a source of long term capital. The pool of funds generated from premiums collected could easily be channeled or invested in infrastructure and other sectors like the manufacturing industry which are crucial to a growing economy. This way, jobs are created while the larger economy grows faster.
However, the level of Life insurance penetration in Africa is still very low, meaning that a greater part of the population is vulnerable to loss. This poses a big challenge to us all.
As regulators of the Nigerian market, we have been responsive by identifying some major initiatives to drive market development. Our Market Development and Restructuring Initiative (MDRI) programme aims at creating increased awareness of insurance products generally and in particular, compulsory insurances of which group Life Insurance is an integral part. The MDRI also aims at eliminating fake insurance because one of the biggest barriers to people buying an insurance policy is lack of trust. We have been able to accomplish much in this regards.
The challenge for the Life insurance segment of our industry is for it to take bold steps to design more simplified and non-complex products taking into congnisance our peculiar environment. You should develop environmental friendly products that identify with the needs of the people as against stereotype life products which pay no particular attention to our environment.
You should make conscious efforts at developing products that will generate and enthuse willing purchase as against the hard sell which insurance generally is in Africa. Also, Life Insurers should be able to demonstrate the value of life insurance compared with other mode of savings and wealth creation and, how it could be the most affordable and suitable solution to the financial needs of the people.
Distinguished Ladies and Gentlemen, my message here today is that of belief in the Life insurance market. We only need determination to develop it and make it work efficiently for the benefit all stakeholders the way it has worked in other jurisdictions where premiums from life insurance business surpasses that of non-life.
I wish you successful deliberations.