Insurance Players Advocate Comprehensive Sector Reform As Elumelu Proposes N30 Billion Capital Base

… NAICOM Launches Sector 10-Year Strategic Roadmap, Others

By CLEMENT NWOJI, Abuja

Business moguls have proposed comprehensive reforms of the insurance sector starting with the review of the enabling Act 2003, recapitalisation and deployment of technology in its operations to enhance its competitiveness, attraction and contributions to the nation’s Gross Domestic Products (GDP).

The proposals were made at the on-going three days’ National Insurance Conference 2023 with the theme “Redefining Safety: Insurance Solutions for Public Buildings and Buildings under Construction”, taking place in Abuja. It was organised by the National Insurance Commission (NAICOM).

The highpoint of the Conference was the launch of the Insurance Sector 10-Year Strategic Roadmap and also the Guidance Note for the Insurances of Government Assets and Liabilities.

Delivering the theme paper, Group Chairman, Heirs Holdings, Tony Elumelu, proposed recapitalisation of the insurance sector like that of the banking sector, which he noted has stimulate growth in the sector and increased its contributions to the socioeconomic development of Nigeria.

According to Elumelu, the capital base of insurance companies should be increased to N20 billion for Life, N30 billion for non-life companies while insurance brokerage firms should also be recapitalised with N1 Billion.

Elumelu further called for the removal of the prevailing dichotomy in authorisation and licencing for life and non-life, stressing that consolidated operators should have N50 billion.

To stimulate insurance awareness and boost enlightenment campaigns, he proposed that all insurer should mandatorily contribute 0.5 of total revenue to drive industry awareness for five years.

Elumelu who lamented the minute extent of insurance penetration in Nigeria, maintained that it behoves on the regulators and the government to play critical role in “making insurance a common right of every Nigerian citizen”.

He observed that the current penalty as provided in the Insurance Act 2003, for not insuring public buildings is not enough punishment to deter anybody from not insuring buildings. He called for the review of the Act.

According to him, It is embarrassing that Nigeria has less than 2% insurance penetration, in a nation of over 200 million
people, struggling to survive, amidst the harshest economic realities. In a society where people are not insured, they are
exposed to financial uncertainties that not only affect them, but their families
and communities.

“Thus, we must re-assess and eliminate the
stifling policies, road blocks, and complacency in the insurance system, to
encourage innovation and provide our people with simple and accessible
insurance, not as an option, but as a fundamental right to secure their future.”

On his part, Jim Ovia, Chairman, Zenith General Insurance, who spoke on ” Insurance and Technology: A synopsis”, emphasized that there is need for the sector operators to embrace deployment of technology in its operations and processes. He explained that with application of technology, insurance marketing and penetration can be enhanced.

He also canvassed that the operators should go into alliance with the mobile communications companies through which the enlightenment campaigns on insurance can be propagated to the interior parts of the country.

Earlier in a welcome address, the Commissioner for Insurance/CEO of National Insurance Commission (NAICOM), Sunday Thomas, said that the Commission has “remained resilient and focused on implementing initiatives that will foster development of the Nigerian insurance industry and align its fortune with that of the nation as the Africa largest economy”.

For the next decade (2024-2033), he said the Insurance Industry “will seek to continue its transformation journey along the following Seven strategic thrusts with the objective of achieving the corresponding goals: Transform the regulatory environment to sustain the industry growth, Transition to risk-based capital model, Promote insurance awareness and adoption, Broaden insurance product offerings and improve effectiveness of distribution channels, Enhance digitalization of the insurance industry, Deepen the industry’s talent pool and capabilities, and Support Nigeria’s economic transformation and sustainability agenda.