 Welcome back now. According to the most recent data from the National Insurance Commission, I come the gross premium generated by the insurance sector increased by 39% year-on-year to $312 billion in the first quarter of 2023. However, on a quarter-and-quarter basis, the gross premium income the client significantly by 47% quarter-and-quarter. The total premium fee for comprised income generated from the life insurance businesses, which were down by minus 64% quarter-and-quarter and minus 52% quarter-and-quarter to $111 billion narrow and $201 billion narrow respectively. My guess is the research lead of Intel Point, the data and research arm of tech premier media publishers of Tech Point Africa. Over the last three years, he has overseen the release of 15 report and counting. He joins me now to look at the critical issues concerning the insurance sector. Good morning to you, Yinka. Thanks for joining me. All right, let's talk about insurance, which is really not something most people would really want to say they relate to it on a daily basis, because if you ask people, are you insured what insurance covers you have? Most likely you'll tell you that they're not insured, except for those who have equal to tell you that maybe they have third party insurance. So what exactly is going on? Why do we have this low penetration in the country? So there's the education part, and there's also the cultural and societal belief part. You approach someone to try and, OK, yes, why don't you have insurance? And the next thing they tell you is that you are probably wishing burden on the terms of supplier, yes, go for the burden of supplier. Yes, so there is that. And then there's also education of not doing the importance of insurance. Yes, you have to buy insurance just in the case of an eventuality, if something bad happens. So you have something to fall back on, you have something to make you whole. So there's still that part of not knowing the importance of insurance, what it's meant to do, it's meant to protect you. Yes, at the end of the day, you might not get, that thing might not happen. But then if it happens, so there should be something to fall back on, which is what insurance is really. OK, so what you talked about, the low level of education when it comes to knowledge of insurance, who should be placed that responsibility on? Is it that insurance companies are not really doing enough education to get more people to believe in education? Or maybe they are doing their best. Now, Nigerians don't just want to believe in what insurance can actually do for that. Yes, it's two ways. One, the insurance companies, they are doing their best. So the insurance companies that we interviewed for the reports, like our majority of them said at any point in time, they have a marketing campaign running, informing people about the importance of insurance, why they should have it for their business. And they also have their sales agents out on the feed, telling people why they should buy insurance. So there is that. So some of the businesses that have insurance agents come to them, they say, yes, this guy's combo, we still don't see the need for it. And we're still not going for it. And then there's also the part that said it's expensive. And that's really lack of awareness because, yes, insurance, you are probably doing about the highest from our reports about 7.5%. So then that's what they say. But if you have a business out of a millionaire and you have to pay about 75 or there about a premium every year, they say it's expensive. So, yes, they are all doing their bids in terms of, it still boils down to the business to make decision of, say, yes, I've been approached by this, I should be the one to go ahead and protect my business for this. Okay, interesting now. You just released a report sometime in January concerning the industry, the insurance sector specifically. And interesting findings that you made specifically, you talked about how premiums were actually driven mostly by life insurance. Is it Nigerians actually would want to prefer to ensure their lives as against insurance or that sort of things that concern them? Okay, so there is that so because, yes, we are going to die. That's that. So I believe that's more play a key role in people going for life insurance. So for life insurance, you have the life insurance, you have the group life, you have the annuity. So even from that, when you break the life insurance into three, you see that life, individual life still has the highest share. So the theory is that most high-network individuals are the one really driving this. Oh, okay. That's my theory. I didn't want to do it driving it because for them, it's a way to pass down worlds to their... So there's that. Yes, as I said, so it's inevitable. So protecting that as to say accidents which can or may not happen. Definitely. So I believe that's one of the reasons why life is really the one driving. And there's also the group life insurance, which is mandatory for companies operating in Nigeria. So far, we eat a certain number of workers. So you have to have group life insurance. So I believe that's also one of the reasons why life is really driving insurance in Nigeria. Okay. So let's look critically at your report and the findings and let's even look at some parameters. Basically, it was done for 2020. In the phase of when we had them, the end size demonstration because we're all just coming out of COVID-19. So what were the... Aside from the fact that it was driven by life insurance, what are the key findings or interesting findings did you come out with from the report? Okay. So talking about how insurance, I mean, businesses say they don't know where to start. Okay. Like that's one of their key reasons why they don't buy insurance is they don't know where to start. It's too expensive. Insurance guys don't come around. Or they don't see the need for insurance for their business. There's also the part of the insurance companies where there is disparity between insurance companies and their agents in terms of the challenges of the sector. So you have challenges like, yes, insurance company claiming... I mean, insurance agents claiming that, yes, they are not being compensated. Well, no, for their workload. And on the other parts, insurance companies say, yes, they are being fairly compensated. So, yes, they are all of that. And then there's also the fact that insurance in Nigeria, yes, the growth is not as expected. But then from 500 billion Naira in markets in 2010 to 2.3 trillion in 2020, it's really remarkable growth. Okay. I'm also seeing some key statistics that you mentioned in your report. You talked about how the percentage of our insurance contribution to GDP is just about 0.32. Yes. Then of the 12 million cars in Nigeria, we have so far about 3.4 million. And you also talked about the interest trees that grow some premium income to 2012 representing about 726.2 billion Naira. So how far is insurance doing in Nigeria compared to other parts of Africa? So right now, as of 2021, insurance contribute about 2.13 percent to the African insurance turnover in 2021, which is very, very minute considering the fact that, yes, Africa is the largest economy on the continent, the largest population and so far. But then when you look at our contribution, it's pretty low. And we are round number five. So what that tells you is that, yes, that's why I'm in 2.13 percent. At number five, which means that a lot of other African countries are really not doing great in terms of insurance in Africa. So yet it's not an isolated case, but then considering the size of our economy and our population, I think definitely it's really not looking good. Okay. Your report also covered the basic trends of the nation's insurance industry in the last 14 years. Can you just highlight some of them? Okay. So the basic trends in the last 13 years to see that, I said the fact that life is the major contributor of insurance premium in the last 13 years. There's also the fact that we have oil and gas and motor insurance in that order. So life number one, oil and gas number two. And the interesting fact is that of those top three, two of them are somewhat mandatory. So we have the group life insurance. This is mandatory for companies. And you have the motor insurance. If you are driving a car on the Nigerian road, most of them are at least the top party. So I believe the mandatory status of life as well as motor is what contributes to making that yes, you have to be part of the top three insurance. So I imagine if you have other products in insurance and make them mandatory. So definitely it could drive both their turnover and. Okay. So with all that you have seen, all that you have highlighted in your report, let's really project and let's see if we can actually have the sector really great identify the challenge of knowledge based and their education and all of that. So what more can we do? Maybe they just practice that because you also highlighted the major players. Now what can be done to ensure that at least we see insurance for what it is really and so we can actually make it like an everyday part of our life. Assess from the fact that you talked about more knowledge. What else do we need to do? As much as we're doing our own advocacy here on TV. What more can we do? So one of the things that we can do is doing more of coming through for people when something happens. So I think the COVID, I mean the COVID-19 and the and then we have a lot of vandalism and looting. So insurance industry paid about 9 billion Naira to victims during that period. So now imagine, so for someone that got some form of compensation after looting and vandalism that person is definitely not dropping of the insurance market, it would keep buying and probably tell other people to buy. So if you have that insurance company are paying premium as a window. Most people believe that when they bring claims that they feel that's the mindset people have that when they bring claims insurance we want to look for reasons why they wouldn't want to even compensate. So the issue is when you buy insurance they give you a policy document which states what you can make claim on and what you can't make claim on. And most cases we don't read. So you don't read it and then it happens and you bring it. So I bought an insurance last year, two years ago. And then afterwards I got the policy document and I saw the policy document read through the fine print and discover yes there are something that the person that sold insurance to me did not highlight. So I was like oh no no no this is if something happened. I won't say deliberate I won't say deliberate I won't say because it's really hidden I'm just like okay. So I read it and I was just like no no no I just call her up. I saw this and I was like okay no this is what I should do. I just get an affidavit to cover this before that thing happens. And I said okay I will get it. I said that if I should get that that covers me if that thing happens. So it's a case of yes reading the fine print to know what's your claim. Most people don't read all instructions. So you say times and conditions apply and you don't need the times and conditions. I believe that's one of the major things. If we read times and conditions of what we are buying that protects us if we want to make claims. You know what you can make the claims you can make and what you can make. So yes that's one of the major things. I also believe that going by so there is this insurance company in South Africa, Pineapple. So as of 2019 when I spoke with the founder. So what you do is you buy a premium and you pay premium. And at the end of the year if you don't make a claim you get a certain percentage of your money back. So it's a startup that is doing this. So it's not a traditional. So now imagine if I pay premium and at the end of the year I do not make a claim and you are giving me back 20 to 30% back. And when I'm paying the following year I pay relief. So that means that more people are likely to all right. Great points now. So far we've seen the fact that we need to do more education for Nigerians and Nigerians need to just come to power with what's happening all over the world. But would you really say as we wrap up that would you really say that insurance is actually expensive in Nigeria? That in the western world insurance comes from even financiers of banks. But in this case in Nigeria or West Africa you find that banks that once financed insurance comes from this. Yeah so I would say insurance is expensive in Nigeria so it's about our purchasing power. So we have low purchasing power. You pay about 7% there about for an insurance. So it's really and for car insurance premium is 5% for money. It's really low compared to what's happening in other markets. So insurance is not expensive. I believe it's not expensive but it's part of the blue purchasing power on the part of the people. Thank you so much Inka. My directors are all like saying lots of stuff in my ears and I have to like leave the set. But I must say a very big thank you to you for coming on the show to just highlight some of those findings that you made from your research and we trust that when you make other researches in the future. Alright my guest has been Inka Awol Soya. He is the lead researcher of Intel Point. I've been looking at the role of education in the nation's insurance industry and how we can actually boot the penetration in the country. Business Insight will return to your screen same time. Many thanks for being a part of the show. I am Justin Acadone.