Insurance industry stakeholders are optimistic about increased growth in the industry if players in the sector could deploy resources to tap from opportunities in small and medium scale (SMEs) industries as well as the creative industry.
They believe that these sectors are the growth base of the economy and need financing to grow and enhance its contribution to the gross domestic product (GDP).
According to the stakeholders, the opportunities are huge when you consider the number of SMEs, the volume of money exchanging hands in the creative industry, particularly the Nollywood, whose activities need a lot of insurance protection for risk management.
They however observe that for the insurance sector to take advantage of these segments of the economy, they need to build capacity, develop products that match the expectation of customers, and the sector will be on the path of growth.
The SMEs need to embrace risk management capabilities to grow and sustain their business, and that is where insurance needs to come in, according to Hope Jomgo, representing MD/CEO, NEXIM Bank, The insurance industry needs to develop capacity, Jomgo said, saying, “You don’t insure a business you don’t know. Nollywood is s new industry, so insurers need to understand the business, risk exposures of the players in the business to be able to offer risk management advices.”
According to Jomgo, these are windows of opportunity that insurers need to develop to deepen penetration, and “This sector needs financing, but must embrace insurance to de-risk the different financing options available to make progress.”
He also emphasised on the need for insurance companies to build partnership with constituent bodies and association of actors and actresses to understand the business they do and be in position to offer necessary advice on risk management.
Emeka Anyaoku, former Commonwealth secretary-general, said it was important that SMEs in Nigeria should be the drivers of economic growth and development practice enterprise risk management, which includes risks transfer to traditional insurance companies with the advice of professional insurance brokers.
Anyaoku, who spoke at the Insurance Brokers of Nigeria (IBN) 62 anniversary and rebranding event held in Lagos, posited that the important role of insurance in promoting enterprise and development of any nation was not in contention.
He said at this stage of Nigeria’s economic development, it was appropriate to ask were the enterprises in Nigeria taking the optimal advantage of insurance to promote and protect their businesses.
“I believe that the general response is that, while multinational companies, large scale indigenous commercial businesses, some Federal and State Governments agencies embrace insurance, majority of the Small and Medium Scale Enterprises who need protection most are yet to proactively engage insurance to protect their resources and assets,” he said.
Ebelechukwu Nwachukwu, managing director/CEO, Zenith Insurance Company Limited, said the potential of growth in the creative industry was huge, and “We must come up with a product that meets the need of this segment of the society because they are exposed to a lot of risks in their business.”
She said this was a major avenue to deepen insurance penetration and grow the market.
A new national MSMEs survey conducted by the Small and Medium Enterprises Development Agency (SMEDAN) in conjunction with the National Bureau of Statistics (NBS) has revealed an increase in the number of SMEs by over 100 percent between 2010 and 2013.
The result of the survey as presented by SMEDAN and unveiled by the minister of industry, trade and investment, shows an increase from 17.2 million in 2010 to 37 million in 2013.
Lai Mohammed, minister of information, speaking ahead of the Creative Industry Financing Conference, held recently in Lagos, described the Nigerian creative industry as the ‘new oil.’
The feats Nigeria is recording in its creative sector, coupled with the potential in the country’s arts, culture, tourism and entertainment, indicate that it harbours a breakthrough for the nation, Mohammed said.
The minister noted that Nigeria could not afford to take the creative industry with levity, as it had become the cash cow for many other nations.
“The creative industry contributed £84.1 billion to the British economy in 2014. It also contributed $698 billion to the US economy, according to a 2015 report. So, Nigeria cannot afford to be left behind, hence, we are ready to explore and exploit the new oil,” he said.
According to Mohammed, the main objective of the conference is to take the industry into “a golden era of smooth access to short- and long-term financing, world-class management as well as local and international distribution.”
Source: Businessday
