Digitalization is the driver for sustainability and Senforce is leading the course – Ani Ojuyah

When it comes to exploring the Nigerian insurance industry’s uniqueness, the low insurance penetration rate (IPR), which is at 0.7% relative to gross domestic product (GDP), is first and majorly due to the lack of knowledge and information availed to the public on insurance. With over 70% of the population living below the poverty line, low levels of education and cultural influence make the consumer base skeptical of trusting their finances with insurance organizations.

The banking industry’s volatile nature, relative to ease of access consumers have in seeking loans, has put off the populace from associating stability and credibility with all kinds of financial institutions. The industry itself lacks the influx of skilled professionals along with a poor understanding of policies and models that are pertinent to the Nigerian consumer base.

These core issues have saddled the Nigerian insurance market for years; however, the Coronavirus pandemic has brought new factors to light in Nigeria’s world of insurance. Financial markets, regulators, insurers and reinsurers, consumers, companies, and organisations have had to consider how factors like health, social activities, travel, communication, and business operations would be affected during this phase and the post-pandemic phase.


If left unattended, the Insurance market is the worst catalyst for the economic crisis post-pandemic.

On a global scale, the pandemic has threatened the onset of a financial crisis and recession across economies. In Nigeria, job security is weakening, businesses are cutting back on staff, and employment opportunities are diminishing. Operational costs are higher than ever. Industries like IT, health, hospitality and tourism, and transportation are increasingly vulnerable, interest rates have fallen, credit risk exposure is high and profits are low.

For insurers, the downward trend in the economy poses a risk to solvency ratios and credit losses, health insurers have more illness and disability claims, social events are cancelled or postponed leaving insurers to attend to the costs, prices have been affected due to the decrease in the sale of products and reduced business activity. These factors have forced industry regulator; The National Insurance Commission (NAICOM) to test the resilience of insurers and reinsurers to these economic shocks and changes.

This is why NAICOM extended the annual deadline for recapitalization. Recapitalization in Nigeria is used as a regulatory tool, to sustain economic growth and development, and protect the public interests and the rights of policyholders. Since the inception of this law through the Insurance Premium Act in 2003, the total premium volume is 1.64trillion USD. This has provided development for the Nigerian climate; however, with the pandemic, the implication of this is it threatens to disrupt the growth rate of the industry.


Traditional and expensive methods will not drive the new era of progress if continuously applied.

 Senforce insurance has highlighted ways in which the industry can respond to the pandemic and at the same time, increase the insurance penetration rate:

In general, understanding the needs of customers will increase the penetration rate in Nigeria. Senforce has placed focus on the wealth of digitalization and Fintech, which is revolutionizing the insurance space, first by using the spreading reach of mobile phones in Nigeria. The pandemic has forced the populace to take most of their affairs online. With 123.49 million of the population, Nigeria already has the highest internet usage rate in Africa, larger than Egypt and Kenya combined who come second and third, respectively, as of 2019. With increased internet connectivity, insurers must use emerging technologies to provide a platform for easier accessibility to consumers. These online platforms should be simplistic and affordable. On a national scale, a business model promoting and partnering with other industries is recommended to widen reach. Industries like telecommunication channels make the internet connectivity approach a lot more effective.

Priority should be given to the health and transport sector as well; they are the first respondents to the Pandemic in Nigeria, regulators and insurers must ensure insurance coverage is reflected in these sectors.  Insurance networks are highly concentrated in a few cities in Nigeria; hence the real sector provides alternatives that serve the larger population. With the fall in interest rates, individual small scale retail outlets are predicted to grow. The informal sector in the economy will see an increase in competition in their respective markets; hence, risks and losses will grow directly. They will need to insure to protect investments, market reach, and supply. Macroeconomic theories have stipulated this model helps economies recover from losses quickly. In assisting consumers in adjusting to the changes, these community-based organizations are the ideal immediate distribution channels to the informal population.


Creating favourable odds post-pandemic.

Easing the Nigerian industry into adopting modern trends, is a very realistic feat, at Senforce, we have shown progress and success in these following steps that we opine will spur long changing growth in the industry. First we have successfully provided adjustable coverage to accommodate changes in consumers and consumer lifestyle, the entire process allows customers to file claims and get quotes remotely and effectively. Insurers must make claims processes easier as the payout structure is considerably weaker. Like us, insurers should develop more flexible products and saturate the market with them.

Next, Nigeria, than any other African nation, has the highest numbers of underemployed and unemployed insurance specialists and professionals in finance-related fields. Insurers must create a flexible employment structure to leverage on this demographic, as more employees will bolster information dissemination techniques and make products more accessible. In order to make this much more effective on a national scale; NAICOM and the federal government must implement stronger regulations, as they have done in making certain insurance products like group life insurance mandatory. Many more insurance products, like health coverage, should be considered basic rights of Nigerians and must be accessible.


The Nigerian insurance space is still relatively new compared to first world financial giants; which have diverse markets, strong government regulations, a proper understanding of the populations they serve and the various products they provide. When incorporated; these processes Senforce recommend will result in instantaneous changes to the industry. Increasing penetration rate, enhancing saturation with the collaboration of insurers, reinsurers, the regulatory body and the government.