Oyetola urges export policies change to boost insurance sector

The Minister of Marine and Blue Economy, Adegboyega Oyetola has called for a change in Nigeria’s export policy to boost the insurance sector.

The former governor of Osun State said there was a need for a shift from Free on Board (FOB) to Cost, Insurance, and Freight (CIF) terms.

The minister noted that the call for a change in policy aligned with the Federal Government’s interest in promoting local industries, particularly the insurance sector.

Oyetola said this yesterday in Abuja during the 2024 National Insurance Brokers Conference and Exhibition, which had the theme “Insurance: The Untapped Goldmine.”

The minister said that the country was losing substantial revenue in the insurance sector by relying on FOB for export transactions, which excludes insurance and freight costs from being managed locally.

He said: “One area we need to really focus on is ensuring that our export tools are based on CIF, not FOB. We are losing so much in the area of insurance, and this is something the government can help address.

“By adopting CIF, exporters would be mandated to handle insurance domestically, potentially driving growth within the sector.”

He stressed that this shift requires aggressive marketing and a strong government mandate.

“The government is interested in promoting insurance. Having an insurance expert call it a sabbatical is symbolic—I’m still part of this association, and that is why I’m here,” he added.

Commissioner for Insurance and Chief Executive Officer, National Insurance Commission (NAICOM), Olusegun Omosehin, said that Nigeria’s insurance sector remained largely underutilised with a penetration rate below one per cent despite its vast potential to drive economic growth.

Omosehin highlighted the importance of insurance in supporting economic stability worldwide and Nigeria’s need to harness this potential through strategic planning and initiatives.

He also commended the participants for their commitment to innovation within the sector.

Omosehin pointed out that opportunities for growth, particularly in agriculture and health, are significant.

“Technology, digital platforms, and customer-centric innovations are seen as key drivers for transforming the insurance landscape,” he stated.

He praised NAICOM for its strategic reforms, including the establishment of a directorate focused on innovation and regulation, demonstrating its readiness to promote growth in the industry.

He urged operators to improve claim settlements and resolve intercompany balances.

He reaffirmed NAICOM’s commitment to supporting the conference’s outcomes, calling on stakeholders to collaborate and develop innovative solutions that will shape the future of Nigeria’s insurance industry.

President of Nigerian Council of Registered Insurance Brokers NCRIB (NCRIB), Babatunde Oguntade, reiterated the need to take full advantage of existing and emerging markets, which have been underexplored.

“A notable example is the CIF model, where Nigeria continues to lose significant revenue due to improper handling,” Oguntade said.

Oguntade noted that the push to expand agricultural and motor insurance services has been slow, with many consumers settling for basic statutory coverage and neglecting more comprehensive insurance plans.

He added: “The issue of illegal insurance practices by financial mandates was also raised, though the Nigerian Insurers Association (NIA) has made strides in combating this with the establishment of a new platform aimed at improving transparency among underwriters.”

Oguntade stated that the industry’s goal was to increase its contribution to the Gross Domestic Product (GDP) from 0.3% to 1% by next year, saying that the target was attainable with collaboration and strategic development.

He said the insurance sector was poised to take on these challenges and explore new growth opportunities, aiming for a win-win situation for all stakeholders.

The President, Chartered Insurance Institute of Nigeria (CIIN), Yetunde Ilori said there was a need to identify and address overlooked opportunities.

“Instead of solely concentrating on the issues that have hindered our progress, we must ask why they haven’t worked and seek solutions,” she stated.

The conference focused on challenges such as limited access to insurance in rural areas and the industry’s reputational issues.