There are cases that the recurring crises in the Nigeria’s foreign exchange (Forex) market have negatively affected the project growth in marine and shipping insurance business.
A recent data has it that the growth rate is too low compared to what the industry experts expected after several years of the enabling law designed to inspire growth went into full capacity.
However, the enabling law, the insurance Act 2023, under section 67-(1) had mandated an insurance subscribing for all goods to be imported into Nigeria
The adoption of Nigeria Insurance Industry Database (NIID), further amplified the law, on marine insurance, which constitute the expectation in the insurance industry that marine insurance premium income will increase drastically.
Moreso, research has it that N18 billion was the highest premium income recorded so far in the first quarter of 2023. Despite the large volume of transaction recorded in the import business which remained at N5.3 trillion in Q1’23.
The industry experts, however, expressed displease characterized by inadequate performance to the unpleasant foreign exchange market that has constrained most importers to go for minimal insurance coverage, also known as third party marine insurance.
Also, not to forget that the NIID commissioned by the Nigerian Insurers Association (NIA), is a central record of marine activities and was launched in 2019 to investigate the operations of fake marine insurance operators and help aid premium income massively.
During the launch of the marine NIID module, Mr. Tope Smart, the Managing Director of Nem Insurance Plc noted that the Marine NIID module will enable premium growth in the industry.
“Having achieved some level of progress with motor insurance since it took off in June 2012, the scheme is poised to bring down the level of fraud in marine insurance business, which is costing the sector billions of naira.”
Mr. Ademola Abidogun, the Managing Director of Guinea Insurance Plc, also expressed his view on the situation that the devaluation of Naira against the US dollar is affecting businesses. In the same manner has affected the import sector and due to that some importers are not doing their insurances properly.
As the impact of Naira devaluating against the US dollar is becoming obscure, Mr. Abidogun further expressed his view that many importers were forced out of business because there is no dollar to even do the importation due to banks not providing them with foreign exchange facility to facilitate their business.
He also noted that the solution is for all hands to be on deck with the insurance sector embarking on massive awareness drive. This, he believes, will create more awareness in the minds of people especially importers on the significance and the part insurance plays in the foreign trade sector.
