Compulsory Insurance Alone Can’t Drive Penetration – IT Expert

The Managing Director of Pinet Informatics, Engr. Lanre Ajayi, has said Nigerians must be persuaded to buy insurance products and services and not by compulsion as it is being done in the insurance industry, through the enforcement of compulsory insurances.

Speaking in Lagos last week, Ajayi said people must see value proposition to buy insurance products, noting that since people are not enlightened  on the values they can derive from insurance products, they will not buy, unless under compulsion, which he said, is not good.

Insurance companies must increase awareness and enlightenment on insurance, if the insurance penetration must improve, he said.

According to Ajayi, the insurance  industry  is  a  vital  part  of the  Nigerian  economy  but  the  industry  is  not  living  up  to  its full  potential, saying, “there  are  less  than 1.5  million  insurance policy holders in Nigeria out of a population of 170 million,  which translates to 0.9 per cent  insurance  penetration.”

He said when compared to  23 per cent  bank  account holders,  105 per cent  of  telephone penetration (more telephone subscriptions than people) and 55 per cent of internet penetration,  then  there  is  a  lot  of  room  for  improvement in insurance industry.

He assured that the situation in  the  insurance  industry  can  be  turned  around  if  the  industry  transit to  a technology driven one, the same way the banking industry got transformed through the infusion of Information and Communication technology in its service delivery processes.

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