Recapitalisation to Strengthen Insurance Sector, NAICOM Insists
The National Insurance Commission (NAICOM) has reiterated that the ongoing recapitalisation exercise in the Nigerian insurance industry is not to reduce the number of firms in the industry.
Rather, the goal of the ongoing exercise, according to the Acting Commissioner of Insurance, Mr. Sunday Thomas, was to strengthen the sector contribute to enable it contribute significantly to Nigeria’s economic development and position it to compete globally. Thomas, said this at the 2019 Insurance Stakeholders Consultative Forum that was organised by the Lagos Chamber of Commerce and Industry (LCCI) in Lagos, with the theme “Insurance Today and Future.”
He said the future of the insurance business was in embracing technological advancements to automate processes and retail segment of the market and not in the big ticket corporate account transactions.
“We cannot go far if we continue to ignore the retail side of the industry.
“Our standing the largest market in Africa in terms of population and our rating as Africa’s biggest economy are not for nothing.
“They should be able to deliver to us a robust insurance business in Nigeria. There are few key things that if we can get right at them will enable us to jump start the industry.
“So, the drive toward financial inclusion and the recapitalisation exercise going on now in the insurance sector are efforts that give us hope that the insurance market stands and distinguishes itself in the Nigerian financial sector,” Thomas said, adding that “dependability, trustworthiness, prompt and fair claims settlement and introduction of innovative products and technology are the things that it will take to place the industry on the part of prosperity.”
In his opening remarks, the President of the LCCI, Mr. Babatunde Paul Ruwase, noted that the forum’s theme, which was “Insurance Today and Future” was to facilitate deliberation on the challenges confronting the insurance sector in Nigeria and chart a new part for the sector.
Ruwase said: “The insurance sector has not shared in the growth experienced by other segments in the financial services sector, such as pension funds, mutual funds and banks, in the last decade.
“According to the data by the National Bureau of Statistics, the insurance sector contributed 0.5 percent to our Gross Domestic (GDP) IN 2019 and grew about four percent in the same.
“Nigeria’s insurance industry has hardly grown in real terms in the last ten years due to major headwinds affecting players including economic and regulatory uncertainties, unwillingness of people to purchase a policy as well as cultural and religious sentiments.”
According to the Doyen of Nigerian insurance industry, Olola Olabode Ogunlana, nothing prospers the insurance business more than prompt settlement of claims.
Ogunlana asked: “Has it occurred to us as an industry that the best advertisement for insurance is prompt and fair settlement of claims? Do the players within the industry understand the difference between the need for insurance and the demand for insurance?
“The data, given the low penetration of insurance, showed that the demand is very low. Should we not therefore focus on stimulating the demand for insurance?”
Other insurance experts at the forum agreed that the way to increase demand for insurance products was for firms within the industry to embrace retail insurance services.
The Managing Director of SCIB Nigeria & Co. Limited,