The Managing Director/ Chief Executive Officer, Arthur Stevens Asset Management, Mr. Olatunde Amolegbe, have challenged operators in the insurance and pension sectors to come up with strategies that will bring the full informal sector under insurance and pension coverage.
Amolegbe who gave the challenge at the 10th Annual Conference of the Nigerian Association of Insurance and Pension Editors (NAIPE) in Lagos, with the theme “Strengthening Pension and Insurance Framework for Better Economy” noted that the informal sector constitute about 70 million Nigerian working population.
He identified the two sectors as key sub-sectors of the financial services industry of the economy that have capacity to accumulate long term investible funds.
He however, regretted that both sectors for years, have been suffering from under development due to lack of public confidence and trust as well as poor awareness of the value of the sectors on the part of the public.
Highlighting the underdeveloped nature of the two sectors, Amolegbe said pension and insurance coverage remained low, observing that only 26.3 percent of Nigerian workers had access to pension plan and health Insurance in 2023 largely due to the high number of informal sector workers in the country.
“Approximately 92 percent of Nigeria’s employed population works in the informal sector, voluntary Micro pension scheme adoption has been low as of December 2024. Micro pension registration was barely 172.936 six years after the introduction of the scheme, for the inclusion of the informal sector”.
On insurance performance he said “Nigeria’s insurance penetration remains largely low at less than 1.0 percent compared to South Africa ‘s 11.54 percent, Namibia’s 7.41 percent Morocco’s 4.10 percent, Kenya’s 2.25 percent and the global average of 6.8 percent,” he observed.
To address the problem, he said the operators’ first step towards capturing the informal sector into insurance and pension fold was to rebuild their confidence and trust towards the sector.
He said this was necessary because without regaining their confidence they could not be captured into pension and insurance nets because they would not want to put their money where they could not easily access it.
He also urged operators of the two sectors to device simple and different system of enrolling the informal sector operators into the system using modern technology.
He said operators of pension sector should begin to think how to establish micro PFAs and operate such firms in areas where micro people live.
He urged insurance operators to use the opportunity of publicity created by the NIIRA 2025 to promote financial literacy among young Nigerians and make people have feelings for savings through insurance and pensions.
Discover more from starmich blog
Subscribe to get the latest posts sent to your email.
