Gains of Insurance Recapitalization on Upward Rise
The gains of insurance recapitalization appear to be growing stronger as the public perception of the sector also seems to be rising. This view was expressed by retired insurance veteran, Mr. Dauda Ajayi while reviewing the industry’s performance after more than three years of consolidation.
The insurance veteran stated that this positive development has resulted in steady investment from the general public. “So far, the public has increased their investments in the sector unlike before.
Even banks and other corporate organizations have suddenly intensified their investment drive which has resulted into over seven insurance companies being acquired by banks” he said.
According to him, the insurance industry is surely on a right path of attaining greatness among the comity of industrialized nations.
He warned Nigerian insurance companies to rise up to the emerging challenges. He said “any company that fails to eliminate the negative indices that have characterized the industry may be edged out of business.
Ajayi emphasized that this positive development has led to the increase in the nominal and paid up capital of insurance companies far above the industry’s recommended standard. He also attributed this to the rising number of insurance companies that are listed on the Nigerian Stock Exchange and even the impressive performance of insurance stocks.
The insurance veteran predicated a higher boom in the sector as more and more of the unexplored areas of insurance are now being looked into.
Ajayi said the nation’s insurance industry has also witnessed tremendous improvement outside the shores of he nation. He said, “It is on record that many Nigerian insurance companies have gone abroad, exporting people’s friendly products, apparently as a result of the higher heights they have attained.”
“Among the registered insurance companies presently operating in Nigeria, over ten companies have gone into the African regions, either buying into or wholly acquiring other insurance companies or establishing branches, stressing that this is a positive omen for he nation’s Vision 2020 and the 7-point Agenda of the Yar’Adua’ administration.
However, he warned that for this growth to be maintained, government and stakeholders alike must strive to follow laid-down rules very strictly.
“For instance, the proposals to make certain areas of compulsory insurance enforceable and the vast opportunities opened in the oil and gas underwriting hold great promise for the industry” he said.