The Minister of Finance, Mrs Kemi Adeosun, lamented on Monday that the under-performance of the insurance sector was denying the country an annual 1.5 per cent increment in Gross Domestic Product (GDP).
Adeosun made the announcement at the 2016 National Insurance Conference (NIC), taking place in Abuja, the News Agency of Nigeria reports.
She said the persistent under-performance of the sector was revealed during the 2014 Insurance Summit.
According to Adeosun, 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.
The minister said that the increment was capable of creating over 70,000 jobs annually.
The theme of the conference is: “Expanding National Resources and Infrastructure in Challenging Times".
Adeosun argued that the industry was under-performing, compared to its pension and banking counterparts.
She identified low awareness as one of the factors responsible for the under-performance of the sector, pointing 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.
The minister said there was need for recapitalisation of most insurance companies.
"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.”
The Commissioner for Insurance, Mohammed Kari, commended the Insurance Industry Consultative Council for organising the conference to reposition the industry.
Kari pledged NAICOM’s commitment to making the industry the next growth area for economic development.