Economic downturn ripples through retail insurance sector as companies struggle

Cynthia Ezekwe

As the economic headwind in Nigeria bites harder,  most insurance companies are witnessing drop sales on retail products, with many finding it difficult to maintain  their market share. This is as the retail insurance sector faces tough economic situations occasioned by the increase in price of fuel, inflation, and other government policies.

Stephen Alangbo, the managing director, Cornerstone Insurance Plc noted that the economic situation has forced people to prioritise their needs, adding that  the current economic  situation of the country  is a major constraint to people distributing retail insurance products  due to high cost of transportation.

Speaking on how insurance companies can remain afloat amid the economic challenges, Alangbo highlighted the need for  strict enforcement of compulsory insurances, noting that the economic condition of Nigeria calls for increase in adoption of  insurance by Nigerians, to enable business continuation in the face of unforeseen occurrences.

The Cornerstone Insurance boss stressed the need for insurance companies to pay claims to affected policyholders, highlighting that doing so will motivate Nigerians to embrace insurance, and contribute to the economic growth of the country.

Alangbo highlighted  the need for insurance companies to demonstrate more activities on Corporate Social Responsibility (CSR), stressing that when the economy rebounds, people would identify more with companies that supported them

Ben Ujoatuonu, managing director Universal Insurance Plc, explained that  it is a trying time for retail insurance business, stating that the income level of people buying retail insurance products is low as many of them live on a daily income.

According to him, the present economic condition of the country  makes it difficult for insurance businesses to thrive, given the rate of inflation, and cost of the essential necessities of the citizens.

“A loaf of bread is now N2,000 and a tuber of yam going between N6,000 to N10,000 and these people don’t make this kind of money, so if you are talking to them about insurance, they would be looking at you from the point of helplessness. It is not that they don’t appreciate the need to protect their lives and assets, but they can’t buy insurance. It is really affecting our line of business.,” he said.

Speaking on the way out, he emphasized the need for stricter enforcement of compulsory insurance, which is required by law.

He urged insurance companies to increase awareness, engage in social responsibility, and settle claims promptly to encourage people to buy insurance, noting that the current economic situation of the country calls for investment in insurance, as replacing lost or damaged assets is challenging due to financial constraints.