The insurance industry is unsettled. There seems to be a gap in the communication vehicle between the regulator, the National Insurance Commission (NAICOM) and the players. The regulator looks to have become too careful not to see more policies fail in its hands, or strongly resisted by any arm of the industry.
NAICOM’s experience with Tier-Based Minimum Solvency Capital (TBMC) policy, which was largely resisted by operators not because of its model, but because of the time frame given for implementation; as well as the policy to grant States of the Federation State Insurance Producer (SIP) license, which was also resisted by Brokers. All these put together have created some cracks in what seemed to be flourishing relationship between the market and the regulator.
The SIP was to be an Agency of a State Government licenced by NAICOM to provide intermediary services and was to be remunerated from the services they provide.
The development has not only affected moving forward with proposed Nigerian Insurance Industry Development Plan (NIIDP), it may also have affected realizing the sector’s growth ambition as planed in the FSS 20: 2020 document.
Mohammed Kari, commissioner for Insurance/CEO of NAICOM had said that the NIIDP would have global objective which would have different dimensions with countries and institutions willing to develop models to suit their peculiar environment.
He said insurance sector in Nigeria would effectively and efficiently navigate it to increase the number of policyholders, while reducing the figure of the financially excluded, which are part of what the NIIDP contains.” he said.
Insurance Icon, Olabode Ogunlana, chairman of SCIB Insurance Brokers had said in 2013 during an insurance conference that for the industry to remain relevant in achieving the country’s Financial System Strategy (FSS) 20:2020 targeted at developing and transforming Nigeria’s financial sector into a growth catalyst and engineering Nigeria’s evolution into an international financial centre, players in the sector must cohesively work together.
Specifically, the vision of the FSS 20:2020 is to make the insurance market a first choice in Africa noted for high level of capacity, transparency, efficiency and safety and attain the 15th position in world insurance premium generation by the year 2020”.
Ogunlana, said then “unless and until we get this right the insurance industry will continue to be in disarray, stating that interlopers in different guises will continue to make inroads into the insurance business to the detriment of the industry, the Nigerian financial system and the country as a whole.”
Looking at the role of the insurance industry including protection and conservation of national wealth as well as risk management, he noted that the industry would be failing in its duties if as in industry “we do not galvanise all arms of this important sector of Nigerian financial system towards attaining these laudable objectives.”