NAICOM in fresh push to reposition insurance business

Determined to reposition the insurance industry for growth and competitiveness, the National Insurance Commission (NAICOM) is deploying new policies and strategies that would build capacity for the business and  also ensure quality delivery of insurance services.

Among the new policies are transition to risk based supervision, which is calculated to lead to consolidation of the insurance industry and build capacity to enable the industry retain a substantial amount of the risk emanating from the local market, as well as play in the global space.

The Commission has consequently engaged  industry operators through its recently inaugurated ‘Insurers Committee’ to ensure smooth implementation of the policies, including its corporate governance code, as well as sub-committees to deal with other challenges facing the industry.

Mohammed Kari, commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM) made the disclosure yesterday during a courtesy visit to BusinessDay headquarters in Lagos.

Kari said, “We need to consolidate, not just in terms of capital but vertical and horizontal. We want a situation whereby our companies should be able to compete locally and internationally”.

He said by the first half of the year, a full guideline that would show a step by step transition plan would be released, and the industry would have begun a new era.

On efforts to increase uptake of insurance by government, Kari said the Commission has intensified a push towards ensuring that government ministries, departments and agencies insure their assets, as provided in the budget. “We are working with the market and sensitising the consumers, including the government, which is supposed to be the biggest consumer. We have taken up the initiative to sensitise them and bring up many big government establishments into taking insurance.

“This week, we’ve released a circular advising them to take insurance policies and the circular will be made public next week,” he noted.

On the corporate governance guidelines, which take effect from April 1, 2016, Kari said the industry would have begun a new era in terms of board composition for companies. “This will lead to stronger and more sustainable boards that would help monitor and ensure quality control in the operations of their different companies, Kari observed.

“NAICOM is making efforts to sanitise the operation of insurance in Nigeria and the effort is accepted by the operators in the insurance sector. This is to ensure that they operate within the framework of the law because once the confidence is lost by the consumer, the business is gone.”

The commissioner who spoke on efforts by the Commission to expand the distribution channels through larger network of intermediaries, noted that it would in the next week, release the insurance guidelines on bancassurance.

“The banks are sitting on a huge data base which we need to deepen penetration, so we shall be releasing our own guideline by next week so that insurance companies can take advantage of that data.

“This is outside our efforts to reduce the restrictions on accessing license for micro insurance and Takaful. We are adopting a staggered capital requirement so that interested players could raise capital for one unit space, regional, state or national, as the case may be,” Kari stated.

Modestus Anaesoronye & Chigozie Egwuatu