Enforcement to drive insurance sector growth in 2017

If the strategy is gotten right, Nigeria’s insurance sector will witness unprecedented growth in 2017 when the industry launches the second phase of its Market Development and Restructuring Initiative (MDRI), analysts tell Business Day.
The project which is driven by the National Insurance Commission (NAICOM) and the Insurers Committee, targets to enforce the different compulsory insurances across the different states in Nigeria, with a pilot launch in Abuja in the last quarter of this year.
Consequently, the project is seeking the buy-in of stakeholders including state governments and law enforcements agencies whose personnel and equipment are going to be used to drive the effort.
The industry premium is currently standing at about N332 billion (at the end of 2015) and industry analysts believe the figure will quadruple in one year, if there is effective implementation.
The MDRI project which was first launched in 2007, is geared at installing necessary reforms in the area of industry capacity, market efficiency and consumer protection in the Nigerian Insurance market, with the target to deepen, grow and move the industry gross premium far higher, through enforcement of different compulsory insurances.
Among the compulsory insurances are Motor Third party Insurance of section 68 of the Insurance Act 2003; Buildings under construction of section 64 of the Insurance Act 2003; Occupiers liability insurance of section 65 of the Insurance Act 2003; Group life Insurance in line with the Pension Reform Act 20I4 and Health Care Professional Indemnity Insurance-under section 45 of the NHIS Act 1999.
Analysts who spoke to BusinessDay, said the growth of the insurance industry is dependent on implementation of the MDRI, as all the impetus for expansion and growth are already built into the strategic initiative.
Yemi Soladoye, managing director, Riskguard-Africa Nigeria Limited, said everything needed to make the MDRI work is already contained in the strategy document.
Soladoye said the formation of the Insurance Industry Consultative Committee; the Insurers Committee; the micro insurance; bancassurance, retail and among others targeted at expansion and penetration, were all part of MDRI project.
“Without implementing MDRI, we cannot grow as an industry, Soladoye, an insurance expert and consultant, said.
Th first phase of the MDRI was launched in 2007 and the target was awareness creation in the six geopolitical zones of the country, with road shows and rallies by the National Insurance Commission and other players in the industry.
On the second phase launch, Rasaq Salami, assistant director, Corporate Communication, in NAICOM, said, “In this second phase, we are taking it a step further by enforcing the different compulsory insurances with the support of all relevant agencies.
“When we are able to do this with the support of governments, agencies and the operators, everyone will benefit and the country will be happier for it.”
“We are looking at the last quarter of this year for the launch in Abuja, and beginning from next year, we take it to other states and we can measure the level of success, Salami said.
One industry CEO’s said the initial challenge in the implementation of the MDRI was that the market regulator probably underestimated the enormity of the work required and the operators themselves were not forthcoming.
“The MDRI initiative is a turning point in insurance practice in the country because operators, regulators, support service providers, journalists and government now realise that there is something going on and there is a direction we are headed to, the CEO further said.