From Joseph Inokotong, Abuja
The National Insurance Commission (NAICOM) has lamented the declining participation of local insurers in high stake businesses like the oil & gas and aviation sectors.
Ther noticeable lack of penetration of insurance firms in these lucrative sectors has led to underwriting businesses that ought to have come to local firms often being executed offshore at the detriment of the country.
The Commissioner for Insurance and Chief Executive of NAICOM, Mr Sunday Thomas, expressed concern on the development while speaking at a directors’ conference.
He observed that more businesses are being shipped abroad for reinsurance have further help to erode the capacity of the local market.
‘More businesses especially in the aviation sector and oil and gas are now being reinsured abroad. Of more concern is the declining participation of life companies in the annuity business which is the emerging business for our industry,’ Mr Thomas said.
‘These are the areas where the industry can impose itself on the economy through the control of funds for national development; unfortunately, we are missing it.’
He urged the industry to embrace technology in order to move forward, stressing that ‘the industry must invest handsomely in technology which is one of our key drivers for developing the market.
‘Institutions should be prepared to digitalize their processes, procedures and systems in order to make their operation seamless and real time.’
The NAICOM boss pointed out that the Commission is investing heavily in automating its processes and expects nothing less from insurance institutions.
He advised the insured public not to discard insurance as part of measures to cut cost in the face of the harsh economic situation.
According to him: ‘It is good to reduce cost but in terms of insurance, people should ensure that all assets are adequately insured.
‘It is good to have a good risk management framework as well as be able to manage our insurances and assets. Many are left with the option of cutting cost, however, not all cost cutting will measure success and some might even end up hurting our businesses.
‘As business owners and as businesses spring up, we must ensure that we put the right processes in place in trying to manage our assets and ensure that we have more strategic thinking.
‘Risk is part of our business endeavours and the best thing is to evaluate and see what part of the risk you can transfer,’ noting that ‘the insurance industry has proven its relevance in the affairs of the economy.’