Stakeholders call for technical disruption to credit insurance in Nigeria

Monday, October 11, 2021 / 10:00 a.m. / Oluwakemi Enitan Falayo for WebTV / Header Image Credit: WebTV

At the September 2021 event, stakeholders agreed that technological disruption would revolutionize credit insurance in Nigeria with far-reaching implications.

In the opening speech, the initiator of the Insurance September initiative, Mr. Ekerete Ola-Gam Ikon, said that the theme of the event, “The Emerging Pace of Insurance”, wanted to set the tone to transform insurance into a functioning system.

AAs of December 31, 2020, there were 1.03 million individual policyholders in the Nigerian market with the potential to grow to over 10 million.

He believed that the gross written premium of N500 billion

The insurance expert believed that product innovation and research were convincing arguments for attracting and retaining valued customers in the market.

He went on to say, “Nigeria needs more insurance companies to serve the uninsured and underserved population. Microinsurance and takaful remain groundbreaking.”

In her speech, Ms. Bolaji Sofoluwe, the founder and manager of the Enterprise Trade and Knowledge (ETK) Group, DIT Export Champion, spoke about ETK as an Africa-focused trade services company developing an internationalization strategy as well as the emerging pace of insurance in retail.

She explained the risk and currency volatility in the age of Covid-19, including:

  • Currency risk in Africa, particularly Nigeria, was at an all-time high and suffered from unprecedented volatility.
  • In 2002, companies that refused to insure cross-border goods and services suffered huge losses.
  • Before Covid 19, exchange rate volatility has been declining in the 21st century, especially since 2014.
  • The South African rand saw one of the largest depreciations in the world in the first three months of 2020, falling 32% against the dollar. The naira against the dollar has fallen more than 26.5% in three years.
  • Many other major currencies such as the dollar, euro and yen remain relatively stable during Covids, especially volatility during global financial risk in 2008.

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In addition, Sofoluwe mentioned the following as the benefits of export trade credit insurance; Global Competitive Advantage, Cash Flow Advantage, Credit Risk Reduction, Improvement of Profits, On a Macroeconomic Level, Facilitates International Trade Flows and Contributes to Global Economic Growth, Increases Financial Stability through Risk Sharing, and Provides Supplier Security.

Looking at the market outlook, she said that ttechnology would continue to make the credit insurance market an efficient and cost-effective one. She stressed that Nigeria is the center of technical innovation and computing, analytics and machine learning could improve insurance systems and risk determination.

“The market is expected to grow at a CAGR of 2.15% from $ 11 billion to $ 12.5 billion by 2023, driven by ongoing uncertainty and changing trade winds, as well as the increasing internationalization of small businesses.” added.

Other speakers at the event are; Mr. Lawrence Bitrus Atafache, CEO of Creatify Inc; Dr. Sunday Seno Agbonika, CEO of Collars and Paws Limited; Ms. Eno Essien, CEO of Rheytrak Limited; and Ms. Hauwa Bako Mohammed, COO of the Bako Kontagora Development Foundation, who hosted the landmark event.

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