The need for double and sustained surge of pension and insurance operators to launch into new areas of business and refit existing business strongholds has gained special impetus at the national conference of National Association of Insurance and Pension Correspondents (NAIPCO), as an incisive look pieced through the theme “Covid-19 Impact On Financial Inclusion: Opportunities For Insurance & Pension Sectors.”
The call to take reverberating innovating actions to douse the severe disruptions fostered by the pandemic and grow business wellness that is a win win for all stakeholders should be leveraged. Mrs. Folashade Onanuga (pictured) who delivered the theme paper gave the charge which she said could benefit the financial system create inclusive growth and herald a broader economy.
Onanuga comments, “Economic shocks like sudden loss of job, illness or death can send people living just above the poverty line into abject poverty. So whether one is in the formal or informal sector, there is the need to have a safety net.” The sudden and unforeseen calamities created by the pandemic has highlighted the need to plan for unforeseen circumstances and even early retirement. In an economy where there is no social security arrangement she said it behoves on the citizens to take initiatives to secure their future life and businesses through the services offered by insurers and pension professionals
She noted that, “Financial inclusion is achieved when adult Nigerians have access to affordable financial products and services that meet their needs. Financial inclusion can only be achieved when financial transaction processes and documentations are transparent, simplified and seen as meeting needs of the people and at the same time being beneficial to the financial services sector.”
She insists opportunities exist to increase insurance penetration and the customer base, “both in the retail and corporate segments of the market if the right moves are made.” Slamming the present insurance penetration average rate of 0.4% of GDP driven largely by a general lack of understanding and awareness of the benefits of insurance products, specifically amongst low-income Nigerians she said a way forward is to build trust, reminding the insurers that the banking sector has managed to bridge this gap successfully and still committed to it.
Onanuga recognised that a whole lot of improvement made to develop the insurance space has come through legislation, the regulator and its regulation. Her comments, “Attempts have been made to improve the performance of the insurance industry through regulation and legislation – new capitalization requirements have been announced and reviews of several key laws are being discussed to bring them up to current realities.”
For pension sector, she said, “inclusive growth in pensions must recognize the peculiarity of the population segment being addressed, adding that This recognition must have an impact on how products are designed and how lower income segments of the population interact with pension funds. If you consider what happens in developed economies, there are different kinds of plans to meet different needs.”
For the trust gap to be bridged, Mrs. Onanuga called on the National Pension Commission (PenCon) to take more advantage of digitization in pension operations to make transactions easier and more accessible by learning from what the banks did to provide banking services to lower-income population groups and adapt same to achieve what the pension act was set to accomplish.