If achieved, this will be a huge quantum leap as the current premium collections are around 300 billion naira.
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Babatunde Fajemirokun, chief operating officer of AIICO Insurance told CNBC Africa that there were a number of factors that would determine the government’s desired outcome.
Fajemirokun said the target was supposed to be viewed in the context of the transformation agenda that seeks to increase policy holders from three million to ten million and also increase jobs from the current 10 thousand to over 50 thousand jobs in the sector.
He added that the insurance market was currently structured along the corporate sector and not the retail
“The corporate sector accounts for 83 per cent of the market share with the remaining being in the retail sector which is where growth will be driven at,” said Fajemirokun.
The country’s finance minister, Ngozi Okonjo-Iweala, said the insurance penetration in the country was small relative to what is happening elsewhere.
Nigeria’s current penetration was about 0.4 per cent of the GDP and the current administration wants to grow the sector to 1.6 per cent within the next decade.
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Fajemirokun said some of the aspects that were affecting the sector were consumer trust and awareness.
“Access to insurance is lacking and there is also a sense that the public do not trust insurance as people hardly see advertisements.”