By Chiamaka Ajeamo
The insurance industry regulator, the National Insurance Commission (NAICOM), has said irrespective of the challenges facing the sector and the economy in general; it is forging ahead with its plans on numerous initiatives and policies to boost insurance growth and adoption in the country this year.
According to NAICOM, to ensure that the insurance penetration level is deepened, the market needs to be developed and exposed to par with best international standards.
Aside market development and growth, NAICOM disclosed it will also be focusing on other areas such as: financial inclusion, consolidation of the sector’s capital, human capital development, bancassurance initiative, new insurance law, life annuity business and improvement in the supervisory processes, digitalisation, among others.
The Commissioner for Insurance, Sunday Thomas, speaking in a report recently said: “Our focus for the year basically is how to expose the market. So, the question is: What do we do to deepen our market? We believe that 2021 will be a great year for us. It is unfortunate that the unexpected happened in 2020 with a lot of inactivity in most parts of the country. Hence the initiatives that are lined up to realise some of the goals could not be achieved.
“But notwithstanding, I must say that deepening the market was our goal and will still be our goal. Part of the mechanism of developing the market was reaching out. We couldn’t do much of this because of COVID-19 and #EndSARS restrictions on movement. But we have been developing some things in-house that we believe will deepen the market.
“In November last year, we registered five additional companies, four insurance companies and one reinsurance company. The last insurance company that was registered or licensed in Nigeria was about 35 years ago. So, we believe that we need an additional operator in that area because the level of retention is on the downward trend.
“We need to shore up this by renting a licence in a local company. We see what is happening within the pension arena that has grown to over N11 trillion. The insurance sector is not playing. We ought to be leading. Out of the four insurance companies that we registered, three of them are life companies that will be playing in the annuity market and this will be big for the sector.”
Thomas explained that market development initiatives would include enforcement of compulsory insurance, introduction of micro-insurance for low-income market, and Takaful insurance as an alternative to conventional insurance products.
Commenting on human capital development, the commissioner exposed the inadequacy in human capital for underwriting, claims and investment management; insufficient actuarial services leading to inability to recruit and retain quality personnel; inadequate training and manpower development.
He said: “We are pursuing the issue of human capital development with operator by making arrangement to have as many actuarists as we can have in the industry because we know the role of actuaries in risk assessment. This is one profession that is lacking in this part of the world.
“We are committing huge resources to actuarial development in collaboration with the Chartered Insurance Institute of Nigeria (CIIN), through the College of Insurance and Financial Management, though the entire process has been affected by advent of the COVID-19.
“We are engaging some institutions like the Shipper’s Council to see how best we can block some of the leakages we have noticed. Most importantly, awareness creation. This and many more are part of the programmes we will be rolling out this year”, Thomas disclosed.