FSD Africa, NAICOM launch R3Lab to address insurance regulation risks
THE FINANCIAL SEC TOR DEEPENING (FSD) Africa, a nonprofit company funded by the UK’s Department for International Development (DfID), working in partnership with Nigeria’s insurance industry regulator, National Insurance Commission (NAICOM), has launched the Risk, Resilience and Regulatory Laboratory (R3Lab), aimed at promoting a more resilient insurance sector and mitigating the impact of specific challenges affecting Nigeria’s insurance regulatory environment.
Sunday Thomas, commissioner for insurance/CEO, NAICOM, speaking at the launch held recently in Lagos, explained that the R3Lab was established to explore ways in which collaboration, technology and insurance supervisory capacity building can improve the regulatory effectiveness of Africa’s insurance industry.
Thomas, who identified the evolving risks in the African economic space to include climate change, pandemics, digitalisation, inadequate understanding and lack of confidence in the insurance sector, emphasised the need for new strategies to enhance the capabilities of African insurance supervisory authorities to effectively regulate and protect insurance policyholders.
The R3Lab, he explained, offers a three-tiered approach towards creating an enabling regulatory environment and equipping the regulator with sound, proportionate and fit-for-purpose practices.
“Risk, Resilience, and Regulation are the key entry points for the R3Lab to build the technical capacity and skills of the regulator on innovation and sustainable insurance,” he said.
The NAICOM boss noted further that the initiative will facilitate the design of customised capacitybuilding programmes and set up peer-to-peer exchange platforms, set up comprehensive learning toolkits, provide a resource centre for data collection and reporting, while supporting topical task forces and forums for insurance supervisors in Africa.
He also pointed out that the R3 lab initiative is a third joint initiative that has been vetted through the FSD Africa partnership with NAICOM.
He recalled that the first initiative is the FSD Africa’s ongoing support in the review of existing regulations, including identifying and articulating the key steps, framework and tools required by NAICOM for Risk-Based Capital (RBC), while the second project is the BimaLab Insurtech Accelerator, which has granted insurance firms access to FSD Africa BimaLab Grant Fund in developing innovative business solutions focused on solving compelling economic or social problems.
“It is my hope that through the commissioning of these projects and platforms, we create an enabling environment for the development of insurance products which address the day-to-day challenges experienced by Nigerians in the face of environmental related risks ,” he stated.
Mark Napier, chief executive officer, FSD AFRICA, commended NAICOM for its relentless effort in supervising and licensing players in the insurance sector, as well as its significant role in creating an inclusive market and developing the industry amid scarce resources.
Napier emphasised that making decisions around innovation matters a lot towards supporting the effort of the regulator and addressing the challenges in the sector.
Elias Omondi, senior manager, risk regulations, FSD Africa, said the R3Lab was created to encourage and facilitate regulatory interactions between insurance regulators across Africa to strengthen their methodologies and develop solutions necessary to create an enabling regulatory environment.
Omondi explained further that R3Lab was established to encompass all African countries. He, however, disclosed that eight countries within sub-Saharan Africa, including Nigeria, Ethiopia, Malawi, Ghana, Kenya, Zimbabwe, Uganda and Rwanda were selected as the pioneer beneficiaries of the projects.