INSURANCE companies in Nigeria would soon become one of the most capitalised in Africa with the proposed increase in capital base as provided for by the Nigerian Insurance Industry Reform Bill. This will place the insurers in a better stead to deploy capital in writing risks across the continent.
This was disclosed by the Chairman of Nigerian Insurers Association (NIA), Kunle Ahmed, at the recent quarterly media briefing in Lagos.
He asserted that the Nigerian insurance industry recognises the huge opportunities presented by the African Continental Free Trade Area (AfCFTA), and plans are underway to explore them.
Ahmed said, “A key focus of this initiative is on developing insurance products that cater for businesses operating across multiple African countries. This includes coverage for trade, investments, and multinational clients.
“The industry aims to capitalize on the AfCFTA’s Trade in Services protocol, which offers opportunities for increased financial integration and cross-border operations”.
The NIA Chairman noted that the proposed significant increase in the minimum capital requirements for insurance companies (non-life: N15 billion, Life: N10 billion, Reinsurance: N35 billion) will enhance the financial capacity of insurers to underwrite larger risks, improve their solvency and increase public confidence in their ability to meet obligations.
He added that it also aims at improving the industry’s retention capacity and reducing reliance on foreign reinsurance.
The Nigerian insurers, according to him, are currently considering establishing commercial presence in other African countries to tap into new markets directly, adding that NAICOM has urged Nigerian brokers, loss adjusters and insurers to improve their value proposition, professionalism and service delivery to remain competitive in the expanded African market.
Ahmed noted that, having recognised the need for a skilled workforce, the industry is emphasising capacity building in areas such as risk management, underwriting and claims administration to meet the demands of a larger and more integrated market.
He stated: “We will also embrace digital technology, which is seen as crucial for Nigerian insurers to operate efficiently across borders and enhance customer service delivery in a wider market.”
Also, he said cybersecurity is a key consideration in this digital shift as NAICOM is also committed to bilateral negotiations with other African regulators, underpinned by mutual recognition agreements, to ease cross-border operations and ensure regulatory alignment.
He remarked that the industry acknowledges the need for harmonisation of insurance regulations across African member states to reduce operational complexities and facilitate seamless cross-border service delivery.
He urged insurance operators, loss adjusters and brokers to research and understand the regulatory frameworks in different African countries to operate effectively within the AfCFTA, as the success of these plans would be crucial for repositioning Nigeria as a leading player in the African insurance market under the AfCFTA framework.
READ ALSO: AfCFTA must deliver for workers and Africa’s future, ITUC-Africa tells AUC, governments
and then