• Monday, December 11, 2023
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Making Nigeria’s insurance market competitive


  Although attitude of people to insurance globally appears the same, early passage of budget by government, strong enforcement mechanisms for different compulsory insurances would make Nigeria’s position stronger and also competitive with other countries of the world.

This is because, while other successful countries have given budget allocation to insurance and enforcement of the different compulsory insurances a top priority, Nigeria’s late budget, poor allocation and lack of stronger legislative powers to make these enforcements has been the major bane of the industry.

Wale Banmore, managing director, Royal Exchange Prudential Life Assurance said this delay in government’s budget approval and eventual allocation though not an exception to insurance, is why most government insurances cannot commence at the beginning of the year and payment of premium also delayed.

He said in public sector accounts, the experience is the same for either insurance or other sector, but the different with insurance is that ministries and parastatals will have to wait for budget approval, volume of allocation before taking decisions on their insurance for a given year. And this sometimes comes after March, April, or June like in 2012.

“It is a general case, but in the case of insurance, why ours is more extended as a result of the process involved. You and I know that the budget of the country, in most cases does not come out and attended to until March, April and it is only when the budget comes out that each ministry, parastatal knows what amount has been approved for it. “It is only when the budget has been approved that this project of insurance can commence.”

So, that has always been the problem. It is the peculiarity of government and the attitude towards all parastatals, not only to Insurance.

On enforcement of group life insurance and how the industry has fared, Banmore stated that there is no compulsory insurance in Nigeria, when it cannot be enforced. “The attitude of people towards insurance is always the same thing anywhere you go. But the difference out there is that the word compulsory is indeed compulsory. For something to be compulsory, there must be consequence, but in Nigeria, there is no consequence.”

“If you don’t have group life in Nigeria as an employer of labour who takes you to court? Who challenges you?

Banmore who shared his experience said recently, he was at Ota Industrial Estate with his team of marketers and after visiting 11 different manufacturing companies with Nigerians sweating and working, he was shocked that there was no group life insurance in place. “If you see a factory of about 200 people, they will tell you they have group life but when you check further, you will discover that it is covering only a few people, may be three directors and the accountant.”

The problem we have is the problem of enforcement. If you look at the issue of group life, there is no arm of government that enforces it. It is only now that the National Pension Commission (PenCom) is helping, but even at that, they don’t have the enforcement clause in the Act. “They cannot challenge, they can only advice. May be that, if you have keyed into pension scheme, then, you must have a rider which is the group life, but if you don’t have it, they don’t take you to anywhere. They can only delay, maybe processing of your certificate or whatever you need to process with them. So, that has always been the problem.

“Though there is some effort along that line with NAICOM and other organs of government, so we are looking forward to the time when enforcement of Group Life will become a reality,” Banmore noted.