CBN targets insurance for 42 million Nigerians by 2020

THE CENTRAL BANK OF NIGE RIA’S (CBN) revamped financial inclusion plan has placed a target of 42 million insured Nigerians by the end of year 2020.

This was disclosed in its National Financial Inclusion Strategy launched last week. According to the CBN, the 2020 target for insurance is set at 40 percent, based on South Africa’s penetration level of 36 percent.

“This target requires 48 percent compound annual growth rate (CAGR) between 2011 and 2020 and to grow the approximately 800,000 (1.8%) Nigerians insured in 2010 to 24 million in 2016 (3%) and 42 million (40%) by 2020,” the strategy document revealed.

For the purpose of this revised Strategy, the CBN defined financial inclusion to be achieved when adult Nigerians have easy access to a broad range of formal financial services that meet their needs at affordable costs.

The services include, but are not limited to, payments, savings, loans, insurance, pension products and capital market products.

Enhancing insurance services as well as other financial services will aid the CBN in achieving its national financial inclusion targets, which is to reduce the proportion of adult Nigerians that are financially excluded to 20 percent in year 2020 from it baseline figure of 46.3 percent in 2010.

In meeting the set goals, some of the roles and responsibilities outlined for key stakeholders in the insurance sector such as the National Insurance Commission (NAICOM) and insurance companies will entail, defining and implementing a micro-insurance framework, defining and implementing insurance literacy programmes as well as enforcing quick settlement of claims and sanctions for infractions.

The NAICOM will also have as part of its responsibilities the enforcement of compulsory insurance product, the incentivisation of insurance companies to develop micro-insurance products, Islamic insurance (Takaful), and index-based insurance products to serve low income/rural individuals and leverage ongoing work by National Identity Management Commission (NIMC) to identify individuals and strengthen the integrity of insurance systems as well as define initiatives for insurance agents to increase outreach in rural areas.