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By Henry Uche, [email protected]
There is a compelling reason to take extra step for the purpose of deepening the insurance sector in Nigeria, given the fact that many Nigerians are yet to embrace insurance business (of holding at least a policy with an insurer) as a necessity in life as it obtains in developed economies.
This is important because among other sectors of the Nigerian economy, insurance subsector is still striving to position itself among the leading sectors that are making significant contributions to national economy. Its contribution to Gross Domestic Product (GDP) is yet less than one percent per cent.
Experts in the industry have opined that insurance to join the league of sectors making waves in the economy its regulator, operators, intermediaries and stakeholders alike must redouble their efforts to uplift the image of insurance business and probably place it in the vanguard for economic development. Recognising the task ahead, the Nigerian Insurers Association (NIA) said it was leaving no stone unturned to ensure that the industry continues to take its pride of place as an economic driver, restorer of businesses and dependable safeguard of national assets, established for the sake of other business ventures.
At the 52nd Annual General Meeting (AGM) of NIA, its Chairman, Olusegun Omosehin in his report told newsmen that the Association was working hand in glove with National Insurance Commission (NAICOM) and other stakeholders within the financial services and technology segments to promote the business of insurance and increase its contribution to national Gross Domestic Product (GDP), by churning out new initiatives.
Among the initiatives set in motion to revamp the sector are: A move to vigorously pursue the Consolidated Insurance Bill 2020, to receive presidential assent.
According to him, NIA did its level best to push for the passage of the Bill in a firm belief that it presents the brightest opportunity for the industry to amend the insurance Act 2003 and reposition the sector to enable it operate in line with global best practice.
“We will review the process that led us thus far and take the next steps in the coming months after due consultation with all relevant stakeholders” he assured.
On the reviewed premium rates for motor insurance, NIA boss vowed to deal decisively with insurers sabotaging the efforts, saying that immediately NAICOM released its circular on the new rates, the Association embarked on extensive stakeholder engagement as a first layer interface with critical stakeholders to ensure their buy-in and support.
“The Association is in full support of the new premium rates and will continue to work with the Commission to ensure full compliance. We have activated an Internal Mechanism for dealing with deviant members. Already our engagements have garnered support across board.
“We are confident that the benefits of the new tariff regime will become manifest in the balance sheet of general business underwriting companies at the end of this financial year” he expressed optimism.
Another move to taken to give insurance prominence is the quest to domesticate ECOWAS Brown Card in the Nigerian market.
According to Omosehin, “I’m delighted to report that this has finally come to fruition with the increase in premium rates for motor vehicle insurances as contained in NAICOM Circular of December 22, 2022 as it is now mandatory that all third-party policies must be issued with a Brown Card cover.
“The Brown Card will serve as a hedge against ECOWAS risks for travelers and businessmen within the Ecowas subregion. Note that Nigerian market has taken its rightful place in the Ecowas Brown Card Scheme and will continue to be represented at its regular zonal meetings. We will work hard to reposition the Nigerian National Bureau to enable it to meet the expectations of stakeholders.” In line with his plan to expand insurance frontier, the insurance Czar affirmed that he was vigorously pursuing a partnership between the Nigerian Insurers Association and the Moroccan Federation of Insurance and Reinsurance Companies.
According to him, this partnership had culminated in the signing of a Technical Cooperation Agreement that will lead to exchange of market information, sharing of market intelligence and capacity building in the insurance sector in furtherance of the excellent cooperation between the kingdom of Morocco and the Federal Republic of Nigeria.
Both Associations he said have agreed to exchange and share experiences and best practices in insurance and work together to identify other possible areas of cooperation including priority areas based on path already laid out by the two countries.
Among the agreements between Nigeria and Morocco in this regard are: Maintaining permanent contacts with each other with a view to exchanging and sharing successful experiences and best practice of both parties. To give effect to the foregoing. the parties agree to meet once or twice a year in Casablanca and Lagos as the case may be.
Altogether both countries would work together to identify possible areas of cooperation to bring this convention to life. To this end, some topics were already identified as priority areas for cooperation based on significant and successful experience in the Moroccan or Nigerian insurance market and they include inclusive Insurance, direct compensation system in Motor Insurance, Bonus-Malus system for third-party motor insurance, etcetera.
Others are: Centralization of motor insurance for Professionals Passenger Transport (TPV) such as taxis, buses, coaches, regular line buses, personnel transport, catastrophic risk coverage scheme, digitalization of distribution channels and customer experience, agricultural insurance.
“We agreed to exchange statistics and technical data on their respective insurance and reinsurance markets to develop comparison benchmarks, which will be useful to both marketplaces.
“We also agreed to exchange information on good practices and share success experiences to serve as a source of inspiration and to facilitate the fast implementation of solutions which have had some positive effect in one of the two markets.
“On human capacity development, both associations have agreed to open their respective markets to field trips and professional development study tours for short-term training programs either within the two professional associations and/or their affiliated insurance companies.
“To give room for evaluation of the agreement and in line with global best practice, the two associations have agreed to conduct a biannual evaluation of the agreement to enrich and further develop it” he maintained.
Moreso, the Association assured that it would continue to maintain a cordial relationship with NAICOM in the overall interest and for the growth and development of the Nigerian Insurance market.
Some issues to tackle with NAICOM’s support are: Insurance Accounting, implementation of the Prudential Guidelines, adoption of IFRS 17, NAICOM portal, AML/CFT, market conduct, and other operational matters. “We look forward to working with NAICOM to resolve all these and other outstanding issues”
In other to soar globally, NIA believed that working in syn with the National Assembly is paramount for them. NIA Chairman assured that the Association would as usual, extend a hand of fellowship and camaraderie to the federal lawmakers to assure them of its support and partnership in the performance of their oversight functions.
“The Association is ready to collaborate with the lawmakers to make laws that will promote the culture of Insurance and improve the business of Insurance in Nigeria. Assuringly, NIA will make engagements with the relevant committees of the National Assembly a regular feature on its calendar”
In a bid to build local capacity and reduce premium flight in Oil & Gas underwriting, the Energy and Allied Insurance Pool of Nigeria (EAIPN)- a brainchild of NIA, is another another initiative which has made significant progress as the Insurers’ balance sheet has continued to be impressive.
“We appeal to General business companies that are yet to subscribe to the Pool to do so without further delay. Companies are also encouraged to increase their patronage in order to improve the capacity of the local market to underwrite oil and gas risks through the Pool. We hope that the Technical Management Board of the Pool will continue to build on the strong and firm foundation and take the Pool to greater heights” he posited.
More so, with the completion of Insurers House (NIA Secretariat) a 7-storey edifice in Victoria Island, Lagos, its members can now heave a sigh of relief as personnel in the administrative and management/operations section would become more effective and efficient given that a conducive environment foster productivity.
Without looking down on anyone, NIA reiterated that its members would cordially work with other stakeholders which includes: Chartered Insurance Institute of Nigeria (CIIN), Institute of Loss Adjusters of Nigeria (ILAN), Association of Registered Insurance Agents of Nigeria (ARIAN) and others.
“A cordial relationship with other government agencies like the Federal Ministry of Finance, Central Bank of Nigeria (CBN), the Office of the Head of service of the Federation (HOS) and others whose activities impact on the business of insurance is another smart initiative to get them to fully understand the nature of Insurance services and to enable them assist operators in delivering more value to the government and people of Nigeria through value-enhancing policy frameworks. Meanwhile premium income written by our member companies in 2022 grew by 33.9 per cent to N726.2 billion from N569.1 billion recorded in 2021” he added.
