Industry regulator, the National Insurance Commission (NAICOM) is optimistic the ongoing recapitalisation in the industry will increase its retention capacity and increase the sector’s contribution to economy.
Sunday Thomas, deputy commissioner for Insurance, Technical made the remark during insurance seminar for journalist held in Ijebuode.
Thomas who stood in for the commissioner for Insurance, explained that the process was meant to enable the sector retain more risks ; turn the image of the insurance market, strengthen financial base of the companies, increase the sector’s contributions to gross domestic product of the country, among other benefits.
He noted that the Commission will prosecute the exercise as never before to ensure that the sector is positioned to support economic development of the country.
“The whole idea of this recapitalisation exercise is to have an industry that is strong, that is diligent in prosecution of its assignment, that is highly liquid in terms of being responsible and prompts in claims settlement, that is solid in terms of assets, that is visible in terms of retaining businesses in our environment and at the end of it is able to add value to our economy.”
“We have the mandate to ensure that the recapitalization throws up more solid companies. Our hands are open to welcome investors in new companies or existing companies,” he said.
He emphasised that NAICOM targets at having companies and insurance sector that would support the government to build a viable economy.
It said that even though operators may not see the benefit of the recapitalisation at the beginning, it behove on the regulator to set the standards that will strengthen the insurance companies’
Thomas therefore assured that the Commission want to prosecute this recapitalization as one that has never been done before
He called on all the stakeholders in the industry to embrace the exercise for growth of the industry, adding that the commission is engaging other regulators for success of the exercise.
“We are engaging other regulators for cooperation for the success of the exercise. Our arms are open to welcome investors either to existing companies or a totally new company.
Presenting the theme paper, Recapitalization Road Map: Implementation, Expectations and Benefits”, Pius Agboola, director, Policy and Regulation at NAICOM recalled previous attempts at recapitalizing the insurance companies to include that of 2005/2007 as well as the attempt done to introduce the Tier Based Recapitalization process in 2012/2014.
Agbola explained the benefits of the recapitalization including the need for capital restructuring, improvement in the liquidity position of the insurance underwriters
He noted that insurance industry life cycle is still at early growth stage which needed to be explored; and need for emergence of holding companies, conglomerates and consolidation of businesses.
