Experts, who spoke at the Sixth National Insurance and Pension Correspondents (NAIPCO) Annual Conference in Lagos, have canvassed the need for creativity in the face of the COVID-19 pandemic, writes Omobola Tolu-Kusimo
TO experts, the financial inclusion goals of the country are achievable, if operators and regulators embrace creativity in their products development and service delivery.
They spoke at the Sixth National Insurance and Pension Correspondents (NAIPCO) Annual Conference in Lagos. It had as the theme: COVID-19 Impact on financial inclusion; Opportunities for insurance and pension sectors.
Operators were advised to leverage the opportunities thrown up by the pandemic to grow their businesses. The experts urged Nigerians to have a safety net by insuring their risks and saving through pension.
Former Director-General, Lagos State Pension Commission (LASPEC), Mrs. Folashade Onanuga, said while the pandemic has caused severe disruptions, opportunities have also been created by businesses to grow customer base.
She said: “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 have highlighted the need to plan for unforeseen circumstances and even early retirement.
“Financial inclusion is achieved when adult Nigerians have access to affordable financial products and services that meet their needs. It 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.”
“Speaking of insurance, 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. Insurance penetration has remained at an average of 0.4 per cent of Gross Domestic Product (GDP) driven largely by a lack of understanding and awareness of the benefits of insurance products, specifically amongst low-income Nigerians. We need to build trust. The banking sector has managed to bridge this gap to an extent.
“Attempts have been made to improve the performance of the insurance industry through regulation and legislation – new capitalisation requirements have been announced and reviews of several key laws are being discussed to bring them up to current realities.”
She noted that in improving access to insurance and making products and services more inclusive, we are discovering that there is a role for stakeholders to play.
For the pension sector, according to the LASPEC boss, “inclusive growth in pensions must recognise 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 plans to meet different needs”.
For bridge the trust gap, Mrs. Onanuga called on the National Pension Commission (PenCom) to take more advantage of digitisation in pension to make transactions easier and more accessible by taking example of what the banks have done to provide banking services to lower-income population groups by ensuring that structures were put in place before the release of pension laws to ensure that the law is implemented.
Chairman of the occasion, Prince Feyisayo Soyewo, said the pandemic has said helped corporate institutions to retool their strategies, leading to higher profitability and easier ways of doing things virtually and getting results.
“The theme of the conference cannot be more apt than now, when the entire world is just heaving a sigh of relief from the ruinous impact of the pandemic. The financial services sector of which the insurance and pensions are critical players also had their fair share of the impact of the pandemic.
“Aside from the long cessation of work, necessitating remote working conditions, the pandemic led to the need to review rates and revisit some of the policy conditions and exclusions earlier permissible for some insurance. I want to believe that the pension sector also had its own side of the pandemic,’’ Soyewo, who is the Executive Chairman, Prestige Insurance Brokers Limited, added.