• Tuesday, March 05, 2024
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Mohammed Kari and Nigeria’s insurance sector


President Muhammadu Buhari on Friday, July 31, surprised many with the appointment of Mohammed Kari as the new Commissioner for Insurance (CFI) and chief executive of the National Insurance Commission (NAICOM). The industry had expected an acting CFI to take over from Fola Daniel whose tenure expired on same day. The acting CFI would have taken charge pending the appointment of a substantive commissioner. Such a break would have given those persons angling for the position the chance to throng Aso Rock and distribute their resumes to officials in the presidency for a mention to the president. But Buhari shocked the insurance world and the entire Nigerian economic community by appointing a substantive commissioner instead.

Kari’s appointment, observers say, achieves a number of positives. One, it ensures there is no vacuum and confusion. Two, it shows that Buhari has preference for an insider to lead the industry rather than an outsider who could rock the boat. Three, Kari was part of the well-applauded transformation drive by NAICOM in the Fola Daniel era and his appointment will, no doubt, ensure progressive continuity.

Joe Irukwu (SAN), the doyen of the insurance industry in Nigeria, recently described Kari as “one of the few Nigerians with great passion for the industry. He is what the industry currently needs to build on the foundation laid by Fola Daniel in ensuring professionalism and operators’ adherence to the rule of the game.”

Kari indeed comes with an enviable career record. Having cut his professional teeth in Royal Exchange Assurance and Yankari Insurance (now Finsurance Company), Kari served as managing director of Nigeria Reinsurance Corporation and, later, NICON Insurance Corporation; and was also managing director of UnityKapital Assurance Plc for four years, where he successfully merged three insurance companies into one.

Industry insiders describe him as courageous, meticulous and a man known for his past campaigns against market indiscipline. In our opinion, qualities like these are required to push the insurance industry to its rightful place in the Nigerian scheme of things. Doubtless, Kari’s wealth of experience in the operational side of the market and predisposition for strict adherence to the rules and laws of the profession will count for much as he steers the ship of the Nigerian insurance industry.

One area that the new CFI should focus attention is consolidation. The number of operators in the industry does not justify the level of contribution of the sector to the Nigerian economy, with brokers concentrating on juicy government accounts, thereby leaving out the retail and micro sector where the majority of the uninsured are. We expect Kari to bite the bullet, open up the intermediation sector and consolidate the insurance companies to a more focused number. Such a move would remove the bad eggs from operation and regroup capital to proper use.

In doing this, however, we expect the commission under Kari to be gentle but firm, create a level playing field for all operators where the rules dictate the game; and make conscious efforts to regain consumers’ confidence. All these, we believe, will go a long way in deepening insurance penetration in Nigeria.

On its part, government should support the industry by urgently seeing to the enactment of the revised Insurance Act that has been in the making for over five years now. Secondly, government must also show itself as a responsible consumer of insurance service by insuring public assets and paying the appropriate premium as and when due. Lastly, government must ensure that it sets up a profession desk in each ministry, department and agency to manage their insurances. This, in our view, would guarantee adherence to the relevant laws and could create employment which could be financed by the insurance industry, directly or indirectly.