No fewer than eight insurance chief executive officers(CEOs) and two executive directors (EDs) will be forced out of their positions by the end of this year, in a major shakeup following a 10-year tenure limit being implemented by the National Insurance Commission (NAICOM).
The executives have spent ten years and above as CEOs and EDs in the same companies and have been affected by NAICOM’s new directive that no one will be in that positions for more than 10 years or a cumulative 15 years for both positions.
NAICOM had in a circular numbered NAICOM/DPR/CIR/45/2022 — sent to all insurance and reinsurance companies on Tuesday, November 22, 2022 — said, this development would become effective from January 1, 2023 with a transition period of 12 months.
Managing Director/ CEOs currently in this category include Biyi Otegbeye, Regency Alliance Insurance ; Ganiyu Musa, Cornerstone Insurance; Fatai Lawal, Sterling Assurance; Eddie Efekoha, Consolidated Hallmark Insurance; Tope Smart, NEM Insurance; Tunde Hassan-Odukale, Leadway Assurance; Bola Odukale, Capital Express Assurance ; and Peju Osipitan, Great Nigeria Insurance.
On the EDs level, Adetola Adegbaye, Leadway Assurance; and Jide Akingbade, Sterling Assurance will be affected.
Chika Onwunali, managing partner, Premium Debate said this is a major shakeup in the industry because it is going to signal the end of owner mangers running insurance businesses and taking major decision in the market.
According to him, it is going to be the end of an era because their presence have been major boost to the market in terms of capacity and development
However, Onwunali noted that it was necessary to be able to move the business to the next level.
“For me, they have done very well, having invested their money and major part of their life to grow the industry, but the industry needs younger people and also fresh ideas,” he said.
Read also: AXA Mansard Insurance records 13% revenue growth in Q1
He then expressed concerns about granting adequate powers to employee managers who will be taking over the businesses as very critical in sustaining the growth and development of the business going forward.
As we speak, some employee CEO cannot approve N500,000 without the approval of the chairman and these are part of the frustrations of employee managers that NAICOM must try to address, otherwise the market will pay the price of exit of these owner managers, he said.
BusinessDay findings show that some of the exiting chief executives have begun industry wide visits particularly to broker clients and major customers to thank them for their support. The are also taking the opportunity to introduce their successors to the market.
But, it was gathered that some of the CEO’s who have been owners managers are converting to Group Managing Directors and chairmen and have begun processes of getting regulatory approvals.
An industry watcher said, for the safety of the investments and continued growth of the industry NAICOM will allow owner mangers serve as chairmen and GMDs for those who already have group structures.
According to NAICOM, “CEOs and other EDs shall serve a maximum tenure of 10 years, comprising of terms of 5 years each, subject to single approval of the commission; the tenure for an ED who becomes a CEO in the same company shall serve a cumulative tenure not exceeding 15 years and where an ED changes portfolio by moving to another position of ED equivalent within the same company, the period spent in previous position will count for the purpose of determining maximum tenures.”
The circular, signed by the director, Policy and Regulation, L.M Abah, for commissioner of insurance, Sunday Thomas, added that, where an insurance company is a product of merger, acquisition, takeover or any other combination, the 10-year period shall include the pre and post combination service years as CEO or as ED.
“There shall be transitional period of 12 months from the effective date of this circular in respect of existing appointments; all CEOs and EDs who have served for 10 years shall cease to continue in such capacity, after the transition period of 12 months; henceforth, all insurers/reinsurers shall give consideration to the provisions of the circular in their future engagement of CEOs and EDs and the circular takes effect from 1st of January 2023.
As at the end of fourth quarter 2022, the nation’s insurance industry gross written premium N726.2 billion, while total industry assets stood at N2.328 trillion.
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