The National Insurance Commission (NAICOM) has urged insurance companies to expand their operations beyond the urban cities.
Its Commissioner for Insurance, Alhaji Mohammed Kari, made the plea at the ongoing Education Conference of the Chartered Insurance Institute of Nigeria (CIIN) in Ibadan, Oyo State.
The theme of the 46th CIIN’s Education Conference is: “Increasing Insurance Penetration through Value Creation”.
The three-day programme conference which started on Thursday would end on Saturday at the Premier Hotel, Ibadan.
Over 150 insurance practitioners were participating in the conference.
Kari said lack of spread of insurance companies to the hinterland was the major concern to the commission, adding that it had equally hindered insurance penetration.
“It is pertinent to note that the industry at large have not convinced the majority of Nigerians that insurance is a viable product, worthy of spending money on.
“A widespread lack of awareness is a key component of the issue, as many Nigerians still do not know how insurance works, how to obtain it and why it should be bought,” he said.
According to him, virtually all insurance companies have their headquarters in Lagos, with few in Abuja and the concentration is complemented by very poor branch network.
He said that 98 per cent of insurance companies were located in Lagos, while 95 out of the 98 per cent firms were located in Victoria Island, Lagos.
“Only two per cent are located in Abuja and other states, apart from Lagos.
“The spatial distribution of insurers and intermediary activities are alarmingly skewed.
“So, the paramount need for companies to spread beyond the urban to the hinterland to open new branches for purposes of proximity to prospective consumers.
“The commission will not relent in its efforts to develop the retail sector of insurance business,” Kari said.
He said the commission in its efforts to diversify insurance distribution had concluded arrangements to open 20 additional branches in the country, despite the prior existing four branches.
Kari explained that each region would have four branches of the commission.
He, however, commended the Oyo State Government forgiven the commission land to executive this mission.
“We envisaged that by end of 2019, we would have opened additional 12 branches, and this would automatically push the commission’s branches to 36.
“By the end of 2019, we would have covered all the states in the federation,” the insurance commissioner said.
NAN reports that Gov. Abiola Ajimobi of Oyo State had on Thursday said that many Nigerians were yet to understand what insurance was and how it works.
Ajimobi made the assertion while playing host to the leadership of the Chartered Insurance Institute of Nigeria (CIIN) led by its President, Mr Eddie Efekoha, in Ibadan.
Ajimobi said that insurance was not well accepted in the country compared to other developing and developed countries due to lack of knowledge.
“Insurance is as good as any bank product, and if properly promoted, it will contribute better quota to the country’s Gross Domestic Products (GPD).