Finance Minister Encourages Literacy Education on Insurance

The Minister of Finance Budget and National Planning, Zainab Ahmed has said that deliberate attention must be given to the low insurance literacy and education in the country.

Ahmed stated this while commissioning the new National Insurance Commission (NAICOM) portal during the weekend.

“The country’s low insurance literacy and education must be addressed, and that methods for insurance education, awareness, and enlightenment must be implemented,” she said.

“I believe with the commissioning of the NAICOM Portal today, the long overdue digital transformation of the insurance industry has begun with the attendant effect of increased penetration, reduction in the numbers of fake insurances, efficient service delivery and improving public trust in Insurance,” the minister added.

Ahmed mentioned that this also demonstrates the market’s abundance of growth opportunities, citing the need to develop new innovative products based on data and customer preferences, as well as the introduction of new distribution channels beyond what is currently available to reach new segments of the market.

While Ahmed praised the insurance regulator for this achievement, she pointed out that underwriters’ bad response to claim settlements has significantly contributed to the current public impression of the insurance industry, as well as a lack of trust and confidence in it.

“Indeed, prompt claims payment is the best advertisement for the industry, therefore all genuine claims that have been duly verified and due process followed, should be paid promptly.

“The Commission must put in place mechanisms to ensure Insurance companies meet their obligations to policyholders by paying claims promptly as that is the major reason they exist in the first place. Claims payment determines the valuable structure of the industry in the economy”, she stated.

She further urged stakeholders in the industry to consciously and intentionally expand insurance’s reach from major cities and a few states to other parts of the country, particularly rural areas, noting that low penetration in the retail end of the market must also be addressed through a vigorous push for inclusive insurance such as ‘microinsurance’ and ‘takaful’.

Investors King gathered that the NAICOM project was enacted to assist the regulator in transforming its operations, driving regulatory and supervisory functions, increasing operational efficiency, and improving business results using technology and data.