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By Henry Uche, [email protected]
In recognition of the dynamic and ever-changing global business environment, the National Insurance Commission (NAICOM) has called on insurance boards to embed robust Governance, Risk, and Compliance (GRC) frameworks in their operations.
Speaking at the 2024 Insurance Directors’ Conference held in Lagos recently, the Commissioner for Insurance, Mr. Olusegun Omosehin, emphasised the importance of GRC in sustaining the insurance industry’s resilience and relevance amid Nigeria’s Volatile, Uncertain, Complex, and Ambiguous (VUCA) economic landscape.
The conference, themed “Board Performance in the Nigerian Insurance Industry: A GRC Approach,” brought together policymakers, directors, and stakeholders to deliberate on strategies for enhancing decision-making, transparency, and compliance across the sector.
Vision for a stronger insurance industry
Since assuming office on May 3, 2024, as the 7th Commissioner for Insurance, Omosehin has focused on repositioning the sector through reforms, partnerships, and advocacy. At the conference, he reiterated his commitment to fostering a forward-thinking insurance industry aligned with Nigeria’s economic aspirations.
According to Omosehin, “GRC is no longer a luxury but a necessity for enhancing decision-making, ensuring transparency, and managing risks effectively. The board, as the highest policy-making organ, must demonstrate unwavering commitment to GRC principles to overcome challenges and ensure the sector’s long-term viability.”
Highlighting governance and compliance gaps in the industry, he stated, “One of the key challenges the insurance industry faces is subpar corporate governance practices, poor risk management, and a low compliance culture. Boards must take the lead in reversing this trend by adopting GRC frameworks that strengthen institutions and foster regulatory compliance.”
Alignment with national goals
Omosehin affirmed NAICOM’s alignment with President Bola Tinubu’s vision of a $1 trillion economy by 2030, noting that insurance plays a pivotal role in achieving this goal. “De-risking a trillion-dollar economy requires more than rhetoric. NAICOM is committed to creating the regulatory framework needed to elevate the insurance industry’s contribution to national development,” he said.
The Commissioner expressed optimism about the 2024 Insurance Reform Bill, pledging to work with the National Assembly to deliver a modern legal framework for the sector. He also outlined NAICOM’s five strategic priorities which are; strengthening supervisory capabilities to ensure institutional stability; enhancing the safety and soundness of insurance companies; promoting innovation and sustainability across the industry; expanding insurance accessibility and penetration nationwide and unifying efforts to embed GRC principles across all strategies.
Timely claims settlement
A critical aspect of the Commission’s focus is ensuring the prompt settlement of claims. Omosehin warned insurers against delays, stating, “Unnecessary delays in the settlement of genuine claims will no longer be tolerated. If you do not honor legitimate claims, you have no place in our industry.”
He urged insurance companies to reduce their outstanding claims by year-end, adding, “As a Commission, we are committed to strictly enforcing the law and taking swift action against insurers failing to meet their obligations. The financial stability of our institutions is more critical than ever.”
Preparing for the future
Omosehin stressed the need for insurers to prepare for the Risk-Based Capital (RBC) regime, which requires robust capitalization to meet industry realities and tap into new markets. “Adequate capitalization is no longer optional. Institutions must prioritize sound capitalisation to remain competitive and navigate current challenges effectively,” he said.
The Commissioner highlighted NAICOM’s recent efforts to examine institutions using the Risk-Based Supervision Approach, ensuring compliance with prudential regulations. He called on insurance directors to collaborate with regulators and implement policies that promote sustainability.
Omosehin emphasised that the growth and resilience of the insurance sector are critical to Nigeria’s economic health. “We all have a stake in the prosperity of our institutions. The insurance sector’s growth is essential to the overall health and resilience of our national economy,” he affirmed.
The conference highlighted NAICOM’s commitment to fostering innovation, accountability, and compliance in the insurance industry. Omosehin’s leadership provides a clear roadmap for directors and stakeholders to align their strategies with national goals, ensuring a vibrant and resilient sector that meets the needs of policyholders and the broader economy.
