1. Insurance as an Engine of Growth and National Development – Challenges of the Present and Future by Rotimi Okpaise

2. Source: Nigerian Insurers Association N000 Page 2

3. Growth Rate in Insurance Net Premiums YearLifeNon-LifeTotalInflation 200137.0%37.8%37.6%18.9% 200241.0%20.4%25.4%12.9% 200318.0%35.9%31.0%14.0% Source: 1. Nigerian Insurers Association 2. Central Bank of Nigeria 2. Central Bank of Nigeria Page 3

4. Source: 1. Nigerian Insurers Association 2. Central Bank of Nigeria 2. Central Bank of Nigeria Page 4

5. Insurance Premiums as a Percentage of GDP in 2004 % World 7.99 World 7.99 Industrialised Nations 9.02 Industrialised Nations 9.02 Emerging Markets 3.94 Emerging Markets 3.94 Africa 4.89 Africa 4.89 South Africa 14.00 South Africa 14.00 Chile 3.50 Chile 3.50 Kenya 3.00 Kenya 3.00 Nigeria 1.0 (approx) Nigeria 1.0 (approx) Source: Swiss Re Economic Research and Consulting Page 5

6. Common Feature Amongst Nations/Regions with High Penetration Levels are: Strong Social and Economic Policies. Strong Social and Economic Policies. Presence of Strong Institutions Presence of Strong Institutions Relatively High (Disposable) Income Relatively High (Disposable) Income Page 6

7. Nigeria – Current Changes Pensions Reform Act Pensions Reform Act Investible Funds @ 01.01.06 plus contributions thereafter Investible Funds @ 01.01.06 plus contributions thereafter Effects on economy Effects on economy Non Life opportunities Non Life opportunities Compulsory Group Life Compulsory Group Life Introduction of Annuity Business Introduction of Annuity Business Page 7

8. Current Changes …contd (i) Current Changes …contd (i) Privatisation Privatisation Leading to the revamping of ailing critical industries and\or enterprises Leading to the revamping of ailing critical industries and\or enterprises New employments New employments Insurance opportunities/needs (e.g. Steel Industry, NA vis-à-vis Virgin, Conoil etc). Insurance opportunities/needs (e.g. Steel Industry, NA vis-à-vis Virgin, Conoil etc). Other Reforms e.g. Other Reforms e.g. Banking Capitalisation may lead to increased consumer banking which will translate to increased personal lines insurance (Credit Life, Motor, Mortgage, Household etc) Banking Capitalisation may lead to increased consumer banking which will translate to increased personal lines insurance (Credit Life, Motor, Mortgage, Household etc) Page 8

9. Current Changes …contd (ii) Current Changes …contd (ii) Other Reforms (cont) Other Reforms (cont) Anti-corruption/Money Laundering laws – may assist in developing the mind set for good ethics in institutional financial management. Anti-corruption/Money Laundering laws – may assist in developing the mind set for good ethics in institutional financial management. The effect of this should not be underestimated as it could lead to the retention of a significant amount of funds on our shores which will help depress borrowing costs and assist industry and SME expand – bringing along insurance opportunities. Page 9

10. Current Changes …contd (iii) Current Changes …contd (iii) Our current low business penetration level, coupled with potential upturn\expansion of the economy Our current low business penetration level, coupled with potential upturn\expansion of the economy – makes one believe that the Insurance Industry is poised to significantly expand its business volume and, consequently its sphere of influence in our financial community. – but CHANGE is needed. Page 10

11. CHANGE is a comprehensive concept and I will only highlight a few on the next slide. Page 11

12. Current, differential, scientific pricing is needed on ALL our products (be it aviation, professional indemnity, motor etc) Current, differential, scientific pricing is needed on ALL our products (be it aviation, professional indemnity, motor etc) Clients will increasingly want to know why and the basis for pricing. It is inevitable. Clients will increasingly want to know why and the basis for pricing. It is inevitable. Products – have to be relevant to needs and user friendly. We have to increasingly directly (for own account) participate in Oil, Gas, Aviation, Marine business. Products – have to be relevant to needs and user friendly. We have to increasingly directly (for own account) participate in Oil, Gas, Aviation, Marine business. Page 12

13. We have to be professionally IT driven e.g. underwriting. We have to be professionally IT driven e.g. underwriting. We have to imbibe (and be seen to imbibe) a fresh Professional Ethics and Good Governance and ALM We have to imbibe (and be seen to imbibe) a fresh Professional Ethics and Good Governance and ALM We have to invest in practical professional staff training and possibly hire hands from abroad. We have to invest in practical professional staff training and possibly hire hands from abroad. We have, as an industry DESIRE to be BIG and a DRIVER to this economy. We have, as an industry DESIRE to be BIG and a DRIVER to this economy. Page 13

14. The above are basic ingredients to make the industry attractive to: Investors, and Investors, and Policyholders Policyholders and lead to the pooling\availability of Funds to the Industrys disposal. Page 14

15. Funds\Money will enable the industry to expand i.e. - create (i) employment - create (i) employment (ii) wealth for owners (ii) wealth for owners - invest – especially in other enterprises - invest – especially in other enterprises - and hence be an active player\contributor - and hence be an active player\contributor in the growth of our economy. in the growth of our economy. Page 15

16. In summary: I see a SIGNIFICANT increasing demand for Insurance coverage: Annuity Risk Life Group Life Health - Post Retr. Health - Pre Retr. Structured Health Cost Health Cost Non-Life Almost ALL areas in response to economic growth Page 16

17. …Summary Contd In my view, Industry Premiums can readily increase from under 1% GDP to 2.5% GDP – N206.6Billion (in current terms) within the next 2-3 years - because of both increased actual demand and latent demand that can be sensitised through marketing. Many are genuinely ignorant of insurance services. This increased growth will lead to the industry being a more visible economic participator - employer, owner, wealth creator. Page 17

18. To achieve these, the industry will need to undergo some changes (as highlighted above) and possibly pool resources together – consolidations. To achieve these, the industry will need to undergo some changes (as highlighted above) and possibly pool resources together – consolidations. These are interesting times/opportunities These are interesting times/opportunities - presenting us with challenges. …Summary Contd Page 18

19. IT CAN BE DONE Page 19

20. Thank you ladies and gentlemen Page 20