“We are sitting on a gold mine but the challenge we have is that we are looking at it as small money.” That was the submission of the president and chairman of Governing Council, National Institute of Marketing, Nigeria, Mr. Ganiyu Koledoye.

Mr. Koledoye, who was speaking against the backdrop of the norm of concentrating on large corporate accounts while neglecting the retail aspect of the insurance business, maintained that unless the industry realises the fortunes in retail insurance, the contribution of the sector to the gross domestic (GDP) product will remain abysmally low.

Koledoye, who was the guest speaker at the 2015 National Conference of the Association of Registered Insurance Agents of Nigeria (ARIAN), held recently with the theme ‘Insurance Retail Development – Solution to Nigerian Insurance Penetration’, urged the insurance marketers to look inwards in order to tap the huge potential in the Nigerian population.

His position collaborates with recent views of some analysts that the nation’s insurance industry could generate an estimated N300 billion annually if 10 percent of its 170 million population take at least one form of retail insurance product offered in the market.

The analysts believe that 15 million policies from life, health and asset-linked policies of at least N20,000 per annum or $10 premium per month would deliver an industry premium that would change the fortunes of the sector and increase its contribution to the nation’s GDP.

The sector, according to the analysts, is currently generating N50 billion annually from retail insurance, which they describe as abysmally low, considering the population size and potential to risk exposure.

Consequently, they see this as challenging operators to put on their thinking caps so as to capture the existing market through innovative products and aggressive marketing.

Rotimi Okpaise, managing consultant, HR Nigeria Limited, said the potential of the Nigerian insurance sector is huge, stressing the need for collaboration and far-reaching strategies to develop the retail market.

“The growth of the insurance sector lies within the retail market, as concentrating efforts on corporate businesses which have remained the same over the years, would not yield the needed result and the industry would not go far in its efforts to contribute to the nation’s GDP,” Okpaise says.

He added that this segment of the market presents the insurance industry with an “exciting” opportunity of providing a needed service of financial inclusion/protection and simultaneously increasing the sector’s contribution to the nation’s GDP.

HR Nigeria, he says, is looking at bringing experts from the UK and South Africa to meet with local industry players for a roundtable discussion to find ways of unlocking the potentials in the retail market.

The firm wishes to be a catalyst to the industry’s discussion and expansion into the retail space, Okpaise observes. Leading the discussion will be Jim Roth, co-founder of Leapfrog Investments, a company with insurance activity in numerous emerging markets such as India, Indonesia, Malaysia, Kenya, Ghana and South Africa, among others.

Fola Daniel, immediate past commissioner for insurance, had earlier charged insurance operators to take concrete steps to deepen insurance penetration in the country, so that the industry could make meaningful contribution to the nation’s economy.

“With the old based economy, the sector barely contributed 0.7 percent to the GDP, and with the rebasing, the contribution of the sector to GDP has dropped to 0.6 percent. This calls for more dynamic strategies to deepen insurance reach amongst the vast populace,” said Daniel.

He said the industry must as a matter of deliberate policy, come up with new ways of doing the business, in order to achieve better result, emphasising the need to take advantage of the new licensing on retail insurance.

“Our marketing strategy must change; our product design and packaging must change; our approach to policyholders and their complaints must change and all hands must be on deck to ensure that the message of insurance is taken to the grassroots,” he said.

“Statistics have revealed that approximately 70 percent of the population live below the poverty line; over half of the population live in rural areas, while 52.5 percent of the adult population are completely excluded from financial services. It clearly identified that the micro-insurance sector is the next growth area for the Nigerian insurance industry,” Daniel added, observing that with the right products, micro-insurance would spearhead the much-desired renaissance in the industry.

Mayowa Adeduro, managing director, Anchor Insurance Company Limited, said retail business is the way to go now and will require industry collaboration to minimise cost and bring about efficiency, adding that the Nigerian Insurance Industry Database (NIID) is a clear example of collaboration that has brought efficiency and value creation in motor business.

For Mr Oye-Hassan Odukhale, managing director of Leadway Insurance Ltd, Nigeria has a population of over 175 million people so where the industry looks at it that the market is tough, people outside Nigeria see it as opportunity as they look at the number of people in Nigeria.

“And if you can sell products to them you know you have penetrated the market. So it is a matter of time we are looking at it  also that we need to look at our backyard.

“There are people to reach there, I look at it that we in insurance industry, we have been a bit lazy to be frank with you. We are not trying to reach people enough with insurance. When it comes to overall premium income of insurance industry, it is not all that bad but most of them come through commercial insurance because you can sell one policy to an organisation for a couple of millions.”

For the national president of ARIAN, Mr. Gbedebo Olamerun, the industry is supposed to be close to the populace.

“We are not close to the populace. So if we start demystifying that value by extending our value chain proposition to go to the rural, go to the urban-rural, go to the rural-rural, that will increase our perception”.

Mr. Olamerun regretted that the kind of products insurance industry sells are obsolete, pointing out that some of those products have been long dead before now.

“And we are still selling those obsolete products in the 21st century. Now, what sells is not the product you sell, it is the way your product is being marketed. Now if the marketing arm of the insurance industry is not heeded, strengthened, helped to deliver value to the customer, then the industry will still be scratching at the surface.

“I’ve said several times that the industry needs to inculcate short-time customer-friendly policies. Until such products are instituted into the insurance products, the Nigerian insurance sector will not get up to its rightful position in the arsenals of the sectors.”