By Tony Obiechina, Abuja
The National Insurance Commission has urged Insurance Companies and operators in the industry to leverage on technology in order to boost insurance penetration across the country.
The Commissioner for Insurance Mr Sunday Thomas stated this at the just concluded retreat for financial journalists themed in Uyo, Akwa Ibom State.
The Commissioner, who was represented by the Deputy Commissioner, Technical NAICOM , Hon Sabiu Abubakar stated that the retreat themed, ” Improving Insurance Access through Market Development and Innovation in 2022 and beyond”, became necessary to correct negative impressions about insurance industry through media reports as well disseminate to the whole world progress recorded in the industry.
” As you are aware, this programme is designed to interact with you . To brief you of the developments in the industry. To brief you so that you will adequately inform others. And the whole effort is to disseminate to the public and the whole world the progress insurance industry has made”, he said.
According to him, “We expect the industry to respond to these efforts by bridging the supply gap and ensure they follow up on the Commission’s move to create awareness among high ranking policy makers in order to prove that the industry is ready for the booming opportunities awaiting them across the country.”
The CFI added that the Commission has secured opportunities awaiting the uptake of underwriters meant to meet specific needs of intending policyholders. He cited the project with Kano State government as a litmus test.
While admitting some inherent challenges, he affirmed that “the Nigerian insurance market market has undergone substantial structural and regulatory reforms over the years following the market development initiatives being implemented and the evolution of Nigeria’s financial sector in the last decade which has been characterised by digital transformation.”
Mr. Thomas said the improvement so far recorded is a tripod comprising the regulator, operators and the media.
Acknowledging the media dimension, Thomas says, “Our (Commission and the media) collective efforts at ensuring the development and growth of the insurance sector will definitely translate to the growth and development of the nation’s economy.”
The NAICOM boss said the workstation of the Commission has been implementing various market development initiatives to lift the insurance sector to a global standard and, top of the six listed initiatives is, risk based supervision framework followed by its spinning investment in digital capabilities and automation-e.g. launching of NAICOM portal, launch of the Bimalab project on the 9th of February 2021 and, enforcement of the compulsory insurance products in Nigeria- via partnership with agencies and states.
“The rest are, capacity development programmes- actuarial, competency framework etc; sensitisation of various stakeholders- MSMEs on benefits of insurance, MDAs insurance desk officers etc and; introduction of regulatory reforms and policies e.g. issuance of web aggregators guidelines,” he added.
Meanwhile, NAICOM said it is expecting the insurance industry Gross Premium Income (GPI) to hit N6.0 trillion by year 2030.
The Head, Corporate Communications & Market Development, NAICOM, ‘Rasaaq ‘Salami, said this in a paper entitled: ‘NAICOM’s Market Development Initiatives: The Journey so Far ‘ delivered at the just concluded NAICOM 2022 Retreat for Financial Journalists in Uyo, Akwa Ibom, State.
Mr. Salami said NAICOM has put in place structures to promote insurance as a tool for stimulating growth of other sectors and raise funds for project development at the Federal and State levels, so as to create over 250,000 new jobs.
He added that the structures would also see to improvement of insurance consumer trust and confidence in the sector, increase insurance contribution to Gross Domestic Product (GDP) from 0.4 per cent to over 3.0 per cent; lower insurance gap from 94 per cent to 70 per cent and increase Industry Gross Premium Income from N630 billion in 2021 to N6.0 trillion by 2030.
According to him, market development is a costly affair and requires huge capital to keep going thus, funding is critical, adding that however, NAICOM will continue to work with all stakeholders to develop strategic, sustainable and implementable initiatives for deepening insurance penetration to enable optimal contribution to the Nigerian economy.
‘Salami submitted that various actions to expand the reach or tap into a different segment/unexplored market (Retail end) and, other activities aimed at achieving insurance market development, have been put in place.
The actions, he further stated, include; Market conduct guideline; bancassurance guideline; Takaful Insurance guideline; Microinsurance guideline; RBS Framework/Own Risk Assessment (ORSA); Nigerian Insurance Industry ICT guideline.
Others are: Guideline on Insurance of Government Assets; Insurance Web Aggregators Operational guideline; establishment of Liaison with target state government – Lagos, Ekiti, Kano, and others; implementation machineries in place; sensitisation of NMSMEs on insurance products and benefits inherent in their consumption – Kano, Abuja, Lagos and insurance education of members of the public at the rudimental level (Sponsorship of radio and TV programmes).
Continuing, he also identified, licensed of four Takaful insurance companies and six Microinsurance companies to transact businesses in Nigeria; processing of other four Microinsurance and three Takaful applications at various approval stages; collaboration and written approval of the Inspector General of Police (IGP) to partner the Commission on its enforcement of compulsory insurances across the country.
He also identified, licensing & authorization module of NAICOM Portal which has been completed and deployed; commenced development of the Supervisory Returns Phase of the Portal and launch of the Insurtech accelerator platform – Bimalab Nigeria project on 9th February 2022 in partnership with Financial Sector Deepening (FSD) Africa.
In his paper titled, ‘Risk Based Supervision Implementation: Commission’s Perspective”, Director, Inspectorate, Mr Pius Agboola said the rationale behind Risk Based Supervision (RBS) was to identifying early risks firms might be having, acting properly and applying effective intervention.
Agboola, who described NAICOM as Africa’s leading regulator in RBS noted that regulator’s method of assessing firms involved studying the company to know its business nature.
Others involved identifying that risk that could be harmful to the company, assessing the ability of the management to control the risk, assessing if the firm has earning, capital and capacity that could minimise the overall net risk and finally rate the company and proffer solutions.
