UNLOCKING NIGERIA’S TRILLION-DOLLAR ECONOMY

 Trust is the key and pathway for people to invest and grow, argues Gboyega Lesi

 Managing Director, Leadway Assurance

Nigeria stands on the brink of an economic transformation that could elevate it to a trillion-dollar economy. The growth potential is palpable, with the country’s GDP currently hovering under $500 billion, according to the Ministry of Foreign Affairs. However, to fully realise this potential, investors must have staunch confidence, a crucial element driving our economic expansion.

This undoubted confidence builds trust which forms the bedrock of every financial transaction, investment, and business decision, yet trust in Nigeria’s financial sector still needs to be fully optimised. According to the World Bank, less than half of Nigerians express confidence in their banks, insurance companies, and other financial institutions. This widespread skepticism hampers economic growth as individuals and businesses become risk averse, stifling investments  and the efforts towards attaining a trillion-dollar economy.

The insurance sector is a prime example of this challenge. Despite its pro

mising potential, Nigeria’s insurance market is valued at approximately $2 billion but contributes less than 1% to our GDP, according to Augusto & Co’s 2022 Insurance Industry Report. This is a far gap from what is obtainable globally, where insurance typically contributes between 3% and 6% to the GDP of leading economies. The significant disparity is a clear reflection of the trust deficit. At the same time, this gap presents a substantial growth opportunity that we can seize by prioritizing trust in every customer interaction.

A PwC survey reveals that 72% of consumers consider trust the most significant factor when choosing an insurance provider. It’s no wonder that the prevailing belief among Nigerians is anchored on trust; they believe that insurance companies are hesitant to settle claims promptly or fairly. Currently, only 1% of Nigerians have insurance, a stark contrast to the global average of 6%. When people are assured that their claims will be handled properly and without hassles, they are more likely to engage with insurance services and solutions.

We must demonstrate our commitment to prompt and equitable claims settlement to dispel this perception. This shift is not merely about enhancing our reputation; it is essential for nurturing a healthier financial ecosystem. Our dedication to timely claims payment transcends business strategy; it is vital for our economic progress. This approach aligns with the Central Bank of Nigeria’s objective of achieving 95% financial inclusion by 2024, with trust central to this vision. When financial institutions are perceived as fair and dependable, people are more likely to utilise their services, stimulating economic growth.

The broader economic implications of trust are significant. McKinsey’s research reveals that nations with high levels of trust in financial institutions experience accelerated growth, greater investment, and increased resilience during economic downturns. For Nigeria to reach its trillion-dollar potential, we must cultivate an environment where businesses and individuals feel secure in their financial dealings.

At Leadway Assurance, building trust is an evolving process that demands consistency, transparency, and fairness. As Nigeria’s leading claims-paying insurer for over seven consecutive years, we affirm that insurance can be a reliable safety net for all Nigerians. Our focus on prompt and fair claims settlement is not merely a promise but the core of our operational philosophy.

In 2023, Leadway Assurance exemplified this ethos by paying out another industry-leading N67.1 billion claims, a significant increase from N57.5 billion in 2022. This notable growth underscores Leadway Assurance’s relentless devotion to financial integrity and its crucial role in improving lives through its robust economic contributions.

The journey to this impressive achievement began in 2016 when Leadway Assurance broke new ground by disbursing N23 billion in claims—a record-setting amount for that year. This milestone marked the beginning of a consistent growth trajectory, demonstrating the company’s enduring dedication to its policyholders and proactive approach to addressing their needs.

The trend of increasing claims payments continued in 2017 with N27.4 billion, followed by N33.8 billion in 2018. Each successive year saw further growth, with claims payments rising to N38.4 billion in 2019. Despite the unprecedented challenges posed by the COVID-19 pandemic in 2020, Leadway Assurance showcased remarkable resilience, paying out N43.5 billion to support policyholders during those tough times.

This milestone commitment to timely and substantial claims payments has been more than just a financial transaction; it has provided critical support to businesses, families, and individuals, safeguarded assets and investments, facilitated wealth creation, and contributed to Nigeria’s economic development.

In essence, Leadway Assurance has played a key role in rebuilding trust in the financial system, renewing confidence among individuals and businesses, and proving that a reliable system can make a difference.

By fostering trust, we continue to pave the way for Nigeria’s economic future. Trust is not only the key to unlocking a trillion-dollar economy; it is the pathway to a future where every Nigerian has the confidence to invest, grow, and thrive. At Leadway, we are honoured to be a part of this transformative journey and are dedicated to making trust the cornerstone of our mission.

Lesi is Managing Director, Leadway Assurance