***Elumelu Advocates hike in capital base
By Tony Obiechina, Abuja
The Commissioner for Insurance, Mr Sunday Thomas on Monday said that the total assets of the industry grew from an asset base of N827.5bn in 2014 to N2.33trn in 2022.
Thomas who is also the Chief Executive Officer of the National Insurance Commission (NAICOM) disclosed this at the two day national insurance conference with the theme, “Redefining safety: Insurance solutions for public buildings and buildings under construction”, holding in Abuja.
He said over the next decade (2024-2033), the Insurance industry will seek to continue its transformation journey along the following Seven strategic thrusts with the objective of achieving the corresponding goals.
The strategic thrust according to him include, transforming the regulatory environment to sustain the industry growth, transition to risk-based capital model, promoting insurance awareness and adoption, broaden insurance product offerings and improve effectiveness of distribution channels.
The Commissioner for Insurance said the Commission, under his leadership, 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.
He said NAICOM has ensured improved safety and soundness of the Nigerian insurance sector to continue to de-risk economic activities of Nigerians through the enhancement of prudential regulatory tools and good corporate governance practices.
He also said the Commission has opened up the insurance supply-side through licensing of twelve additional new entrants and expansion of insurance distribution channels.
The licensing of these companies, he added, has enhanced availability of insurance products as well as increase local insurance capacity in Nigeria.
According to him, the last time an insurance company was licensed by the Commission before those recently licenced, was 10 years ago while that of any Reinsurance company was 32 years ago.
In terms of its performance, the NAICOM Boss said the industry premium income between 2014 and 2022 grew at an average of 13.6 per cent; from a premium income of N282bn to N726.2bn.
He pointed out that the National Insurance Conference is one of the initiatives of the Commission to achieve the objective of incentivizing the law enforcement agencies, State Governments, relevant professional bodies and all other stakeholders.
“The conference will also sensitise the general public and create the needed awareness of the place of insurance in redefining safety in Nigeria.
“The stakeholders will be discussing current and emerging issues, generate ideas and insights which can be transformed into actionable strategies for effective enforcement of compulsory insurances by relevant authorities and agencies of government. It is also hoped that this will usher in a new era of collaboration which will facilitate improvement in National Safety Standards”, he added.
In his presentation at the event, the theme paper presenter, Mr Tony Elumelu, Group Chairman of Heirs Holdings called on NAICOM to raise the capital base for non-life insurance companies to N30bn while that of life insurance firms should be increased to N20bn.
Currently, the paid up capital for Life insurers is N8bn; general underwriters N10bn; while composite and reinsurance companies have new minimum paid-up share capital requirements of N18bn and N20bn
Elumelu said while the proposal may be unpopular, it will have huge impact on the insurance industry in the long run.
He also called for a review of the dichotomy in insurance authorisations/licences between life and non-life insurance firms, noting that consolidated operators should have N50bn.
He said, “I want to see our sector grow in the same way. I embrace competition, but I know if we, the government, regulators and industry players work together, we can create an enormous market that serves the greater good.
“Consequently, I propose as follows: We should increase the capital base of Insurance Companies to N20bn for Life and N30bn for Non-life respectively. READ ALSO:
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“Review the dichotomy in Insurance authorisations/licences between life and non-life. Consolidated operators should have N50bn. Let us use regulation to shape behaviour and enforce compliance.
“NAICOM should focus on substance and things that will shape the sector and stop approving adverts. Use that time for more important aspects of regulation and save taxpayers money for more catalytic actions.
“All insurers should mandatorily contribute 0.5 per cent of total revenue to drive industry awareness for 5 years. NIA should administer this professionally. Insurance Brokers capital base should be increased to N1bn.”
Representatives of state governors, ministers, legislators, captains of industry, royal fathers as well as insurance experts attended the conference which will end on Tuesday.
High point of the conference was the launch of the Insurance Industry Strategic Plan and the Guidelines for Insurance of Government Assets by the President who was represented at the occasion by Permanent Secretary, Federal Ministry of Finance, Mr Okokon.
