Africa Re, the World Bank, and the federal government are collaborating to improve insurance penetration levels among farmers through affordable insurance packages, Ken Aghoghovbia, Chief Operating Officer/Deputy Managing Director, of Africa Re said in an interview with Nigeria Today.
Increased agricultural insurance penetration is expected to play a crucial role in driving the Nigerian federal government’s agricultural transformation and financial inclusion agenda.
He told Nigeria Today; “If farmers are paying lower premium, many of them would take agriculture insurance, and if they have it, in case of any catastrophe in their business, they would be able to weather any storm and continue in their business. They would be in a position to pay back any credit facilities.
“Many of them need funds to expand their business, but credit would hardly come if there is no guarantee that they would payback, especially in the face of catastrophe. This is one area that we are closely working with the World Bank and helping drive the Federal Government growth agenda.”
Aghoghovbia highlighted the urgent need for greater insurance penetration in the country that falls behind other top African insurance markets with an insurance sector that’s largely focused on government and corporate segment, and low levels of retail uptake.
The Africa Re reinsurance executive’s sentiment echoes the concerns of other industry experts operating in the Nigeria market; Executive Vice Chairman of Insurance Brokers of Nigeria, (IBN), Prosper Okpue blamed the tendency for most insurance brokers to focus on big-ticket government business for the low-level of insurance penetration in the country.
Okpue suggested insurers market their own products throughout the more remote regions, instead of relying on brokers for business deals in Nigeria.
As a fast-growing country with a population of 180 million, the potential for the personal and life insurance market share is still largely untapped by the re/insurance industry – despite Nigeria’s fairly stable macroeconomic environment which offers potential for rapid economic and insurance market growth.