COMMISSIONER for Insurance and Chief Executive Officer, National Insurance Commission (NAICOM), Mr Olorundare Sunday Thomas, has said the insurance industry paid N550 billion as claims in the half year 2023 (H1 2023).
Thomas, who disclosed this while presenting a paper titled, ‘Rethinking Insurance as a Critical Economic Growth Strategy’ at the Lagos Chamber of Commerce and Industry (LCCI) Insurance Group 2023 Stakeholders’ Consultative Forum in Lagos, added that the industry paid N398 billion as claims in 2022.
He pointed out that when the impact of losses are analysed, especially from the angle of claims paid, it would reveal the extent of insurable adverse events leading to financial losses which, if not insured, would have slowed down the economic activities that galvanise growth in the country.
The NAICOM boss said every institution, including the government, embarks on strategies for maximising revenue and optimising expenditures, which may constitute exposure to financial insecurity.
Thomas stressed that insurance is often considered a first line priority in ensuring financial security as it serves as a component of risk management system that mitigates the impact of financial risk on entities, government, other institutions and individuals.
He disclosed that the Federal Government has started embarking on reforms that will open up the economy for developments through diaspora partnerships, foreign direct investments, facilitating and enabling conducive business environments in the country.
The NAICOM boss noted that investments would not be attracted without institutions covering the risks associated with such openings to the world and the country must therefore think insurance when considering the “risks of expropriation, currency inconvertibility, terrorism and sabotage, sovereign and sub-foreign obligor risks, protracted defaults and many other risks.”
He stated, “Thinking insurance in developmental process enables investors concentrate on commercial aspects of investments whilst relying on the comfort of the cover provided by insurance institutions for pure risks not excluding political risks.”
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