NAICOM Poise to Enhance Insurance Status in 3years

Notwithstanding the few giant steps that insurance has taken in the past few years, especially its performance at the stock market and other market indicators, the sector still ranks abysmally low among its peers. Rising from a critical stakeholders forum, aimed at taking insurance to the next level, the National Insurance Commission (NAICOM) and key industry players have given themselves a 3-year target to change the face of insurance in Nigeria. According to Fola Daniel, commissioner for insurance, the slow pace of development is not in best interest of the industry. He expressed dismay that smaller countries without the enabling environment as Nigeria are developing faster than us. The insurance commissioner stressed that “smaller countries like South Africa, Morocco, Malaysia and Egypt are doing far better than us in insurance” He therefore declared that this ugly “situation would have to be reversed within the next three years” Corroborating the slow pace of development, Nkechi Nwogbo, Chairman, Senate committee on Banking, Insurance and other Financial Institution had also stated that the insurance sector has not risen to global challenges to develop along the expected lines. She stressed that under the Financial Services Sector (FSS) insurance contribution to the economy was still a far cry from what other sectors like banks are doing. The committee chairman used the forum to call for sober reflection among the operators with a view to moving the industry forward. Industry watchers believe that much can still be done to change the situation especially if there is sincerity of purpose among the operators. Adulphus Nwaize, managing director of Trinity Consulting Group, stated that it was regrettable that even with “Nigeria’s population of over 150 million people, the number of the insured is less than 20 million and the industry’s contribution to the Gross Domestic Product (GDP) is less than 5 per cent” He stated that at the current pace of development, the N1 trillion premium projection by the year 2020 would merely be a paper projection” Nwaize explained that the Fola Daniel regime has been more purposeful in the annals of reforms that the industry has witnessed over the years. He challenged insurance firms to embark on credible and long lasting measures that will put insurance on the front burners in Nigeria and Africa at large. More importantly, government must set the pace by complying with the relevant sections of the Insurance Act which makes certain insurances compulsory. “Government should encourage Nigerians to take insurance by making sure that all government agencies and parastatals do so, while also adequately funding the sector to bring it to acceptable international standard.”
According to Nwaize, that the industry has performed below expectation is a function of government which over the years has failed to build on the colonial blocks that started insurance in Nigeria. He however appreciated the fact that the profession is evolving and operators are also learning fast along the line of the developed economies. But, if they must succeed, he warned, the operators must strategise to change public perception of Nigerians on insurance.. It would be recalled that the insurance industry has recorded significant growth in the past decade. For instance between 2001- 2008, the industry recorded an average growth rate of 42.77 percent. Leading in this pack is General insurance which contributed about 25 per cent to total premium, followed by Life which stood at about 20 per cent. According to figures released by the Nigeria Insurers Association (NIA) the sector recorded 49.33 percent growth with a total premium income of N150, 259,567, excluding reinsurance premium. It added that in 2007, was also not too low of expected projection, standing at about N161 billion.