In furtherance of its continuous pursuit of a vibrant insurance industry that delivers inclusive growth, the National Insurance Commission (NAICOM) unveiled a 10-year transformation roadmap, writes JOSEPH INOKOTONG.
The National Insurance Commission (NAICOM) has over the years initiated measures to grow the insurance industry in consonance with its statutory functions. The central aim of the objective, among others, cannot be divorced from increasing insurance penetration, which at present stands at less than two percent despite concerted efforts to reverse the slide and place it on the growth trajectory.
It was therefore not a surprise to many industry watchers and other stakeholders when the Commissioner for Insurance/Chief Executive Officer of NAICOM, Mr Olorundare Sunday Thomas dropped the hint of a 10-year insurance industry transformation roadmap at the just concluded National Insurance conference held in Abuja.
According to him, the decade-long roadmap (2024-2033) is built upon seven strategic pillars, which include regulatory transformation, risk-based capital models, insurance promotion and adoption, product diversification, distribution channel optimisation, digitalisation, talent development and support for Nigeria’s economic transformation.
The occasion was apt for the unveilling judging from the theme of 2023 National Insurance Conference, ‘Redefining Safety – Insurance Solutions for Public Buildings and Buildings under Construction.’ Thomas noted that the seven strategic objectives will guide the commission’s transformation efforts over the next 10 years, adding that NAICOM will launch the ‘Guidance Note for Insurances of Government Assets and Liabilities.’
The National Insurance Conference, as enunciated by Thomas is one of the initiatives of the commission to achieve the objective of incentivising the law enforcement agencies, state governments, relevant professional bodies and all other stakeholders. The conference helps to sensitise the general public and create the needed awareness of the place of insurance in redefining safety in Nigeria.
Thomas announced, “President Bola Tinubu will also be launching the insurance sector 10-year strategic roadmap and also the Guidance Note for the Insurances of Government Assets and Liabilities.”
Stakeholders at the conference discussed current and emerging issues and generated ideas and insights that can be transformed into actionable strategies for the effective enforcement of compulsory insurances by relevant authorities and agencies of government. This may usher in a new era of collaboration which will facilitate improvement in national safety standards.
The commission, under Thomas’ leadership, has remained resilient and focused on implementing initiatives that will foster the development of the Nigerian insurance industry and align its fortune with that of the nation as Africa’s largest economy. He briefly highlighted the flagship projects being implemented by the commission as part of its medium-term NAICOM Strategic Plan 2021-2023 including “Ensuring improved safety and soundness of the Nigerian insurance sector to continue to de-risk economic activities of Nigerians through the enhancement of our prudential regulatory tools and good corporate governance practices. Migration of the commission’s supervisory regime to align with global best practices,” he said, “This initiative has enhanced the commission’s distress management and market restructuring.”
Also, he mentioned the “Implementation of project e-regulation through operationalised Business Process Management Solution and NAICOM portal,”noting that “The BPMS is currently being used to process applications from insurance institutions while the portal remains the focal point for the generation of unique policy identification numbers for all policies as well as the repository for statistical data including verification of insurance policies issued in Nigeria.”
Also, among the strategic plan as he stated is the “Implementation of an actuarial capacity development programme for the Nigerian insurance industry.” The programme, he noted has helped to develop some Certified Actuarial Analysts in Nigeria, as he assured that “The commission will continue to engage relevant stakeholders with a view to developing additional Actuarial professionals for the industry.”
Opening up the insurance supply side through the licensing of 12 additional new entrants and expansion of insurance distribution channels, etc, aptly form part of the giant strides recorded by the commission. Indeed, the licensing of these companies has enhanced the availability of insurance products as well as increased local insurance capacity in Nigeria. This was historic, as Thomas pointed out considering that the last time an insurance company was licensed by the commission before those recently licensed, was 10 years ago while that of any reinsurance company was 32 years ago.
The commission as part of its support to government initiatives mobilised the insurance industry to contribute the sum of N500 million and free life insurance cover for front-line workers in the management of the COVID-19 pandemic. It has continued to reach out to state governments and relevant security agencies in the enforcement of compulsory insurance.
The Chief Executive of NAICOM stated that the commission also provided financial assistance to tertiary institutions in Nigeria to facilitate the education of professionals required by the insurance sector. “Projects in five tertiary institutions have been concluded and some commissioned while seven others are at various stages of completion,” he noted.
Notwithstanding the growth that had been sustained, he explained that the roadmap enumerated some of the challenges affecting the desired growth of the insurance industry which had persisted, such as the talent gap, comparatively low public awareness, insurance affordability, lack of trust and confidence in insurers, cultural and religious bias, inadequate distribution channels, low enforcement of insurance and others.
In terms of its performance, Thomas pointed out that “the industry premium income between 2014 and 2022 grew at an average of 13.6 percent; from a premium income of N282 billion to N726.2 billion. The total assets of the sector also grew at an average of 12 percent for the same period, from an asset base of N827.5 billion in 2014 to N2.33 trillion in 2022.”
The insurance industry, he highlighted, will seek to continue its transformation journey along the seven strategic thrusts earlier enumerated with the objective of achieving the corresponding goals of transforming the regulatory environment to sustain the industry growth, and the transition to a risk-based capital model, to promote insurance awareness and adoption, among others.
Also, the goal aims to “Broaden insurance product offerings and improve the effectiveness of distribution channels, enhance digitalisation of the insurance industry, deepen the industry’s talent pool and capabilities, support Nigeria’s economic transformation and sustainability agenda.”
The conference, no doubt, serves as only one out of numerous efforts of the commission to create the needed awareness of the general public of compulsory insurance. It also created the platform to strengthen collaboration with relevant government and non-government agencies and other stakeholders in order to ensure that enforcement of all classes of compulsory insurance across the country is carried out effectively.
Analysts are optimistic that the engagement at the conference will stimulate further discussions that will culminate in formulating beneficial policies to the insurance industry and the Nigerian economy in general.
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