Adeosun laments how Insurance sector deprives economy of 70,000 jobs yearly

The inability of the country’s insurance sector to live up to expectations costs the country at least 70, 000 jobs that would have been available every year.

The under-performance of the sector is also denying the country an annual 1.5 per cent increment in Gross Domestic Product (GDP).

This was made known by the Minister of Finance, Mrs Kemi Adeosun on Monday while speaking at the ongoing 2016 National Insurance Conference (NIC) in Abuja.

According to her, the deficiency of the sector was revealed during the 2014 Insurance Summit.

She therefore said there is need to immediately address the issues responsible for the under-performance “because a 0. 33 per cent increase in insurance penetration can result to a growth of 0.5 per cent in GDP”, capable of creating over 70,000 jobs annually.

The theme of the conference is: “Expanding National Resources and Infrastructure in Challenging Times”.

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Adeosun noted, that compared to its pension and banking counterparts, the industry was under-performing, and identified low awareness as one of the factors responsible for the under-performance of the sector.
She also pointed out that out of 57 insurance companies in the country, less than 23 advertised their products.

“The companies put in less than 20 adverts on television, less than 10 adverts on radio and less than 10 adverts on social media.

“Other factors include poor distribution channels and unethical practices among operators.

“I’m working vigorously with the National Insurance Commission (NAICOM) to ensure that premium discounting is eliminated among practitioners,” she stated.

While noting that there was need for recapitalisation of most insurance companies, the minister explained, that “The first top three banks have over N3 billion capital base each while the top three insurance companies’ capital base is between N20 and 25 million each.”

Over 200 insurance practitioners are attending the three-day conference.

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