Business analyst, Chika Mbonu, says Nigeria’s weak insurance sector is not only limiting economic growth but also exposing banks and the wider financial system to greater risks.
Speaking on Arise News on Tuesday, Mbonu said insurance is a critical foundation for banking because many of the assets and securities held by financial institutions depend on adequate insurance coverage.
“Insurance is a very important part of the economic system. Without strong insurance, the banks are also affected because many of their securities rest on insurance,” he said.
He explained that despite its importance, Nigeria’s insurance penetration remains below one per cent of GDP due to low public trust, poor awareness, weak product design, distribution challenges and concerns over claims settlement.
According to him, many Nigerians believe insurance companies collect premiums but fail to honour claims, discouraging households and businesses from purchasing policies.
Mbonu said strengthening the insurance industry would improve confidence,
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