Buhari warns insurers against fighting recapitalisation
President Muhammadu Buhari on Monday charged insurers against fighting recapitalisation efforts of the sector by National Insurance Commission (NICOM).
The President, who spoke at the opening of 2019 National Insurance conference in Abuja said the government will continue to support the industry to enable it contributes effectively to the growth of the nation.
Represented by the Permanent Secretary, Federal Ministry of Finance, Dr. Mahmoud Isa-Dutse, Buhari urged the operators not to fight the recapitalisation just because they could not raise the expected capital, stressing that the act to deepen insurance penetrations remains a responsibility to be carried out by all stakeholders.
He described the theme of the conference: Disruption, Innovation and Business Growth as apt especially considering that his administration was determined to create massive employment by expanding the productive sector.
Speaking earlier, Commissioner for Insurance, Mr. Mohammed Kari, harped on the need for radical reforms in the industry.
He said radical reforms, which his commission had embarked upon has been accentuated by the disruptive impact on the insurance industry of a series of digital innovations in areas such as online sales technologies, machine learning, the internet of things, advanced analytics and virtual reality, among others.
“Therefore, in order to remain relevant and become a critical contributor to the national economy, the industry must consciously be proactive and organised so as to take advantage of the opportunities provided by these disruptive developments while at the same time curbing their corresponding negative impacts.
“It is important to note that firms will only benefit from digital technology only if they embrace its potentials along the entire insurance value chain, including underwriting and claims management.
“This would therefore entail a rethink of the industry’s business strategy and alignment of its operational practices to contemporary economic context such as the Economic Recovery Growth Programme (ERGP) of the Federal Government, sustainable and inclusive insurance as well as exploiting the benefits of the implementation of the 2nd Phase of Market Development and Restructuring Initiative (MDRI), among others.”
According to him, the reforms were in furtherance of the President Muhammadu Buhari’s administration’s determination to revamp the economy as encapsulated in the ERGP in order to ensure that the insurance industry becomes a significant contributor to the economy of Nigeria.
Chairman of Insurance Industry Consultative Council (IICC), Eddie Efekoha appealed to NAICOM to favourably consider suggestions put forward by Nigerian Insurers Association (NIA) in the on-going engagements on the recapitalisation of the industry.
“This recapitalisation exercise, like every past reform, presents both opportunities and new challenges.
“As operators, we must begin now and not later to address our minds to the following questions: How do we maximise the use of the additional capital to generate superior returns to investors? How does technology help the industry to deliver superior service and deepen insurance penetration?
“How do we develop a data pool that supports improved pricing of risks underwritten and innovative products driven by consumer insights? What do we do to develop and attract the right skills and talents that can match the fast pace of technology revolution?
“How do we harness the values inherent in partnering with other industries like telecoms and banks to deepen insurance penetration? How do we partner with various arms of government like the NPF, Customs, Fire Service to ensure compulsory insurances are enforced?
“Above all, how can we cooperate better than we currently do for the good of all stakeholders?”