The Founder/Chairman, Heirs Holdings Group, Mr. Tony Elumelu, on Monday proposed an increase in the capital base of insurance companies to enable them to create a much-expected impact in the economy as well as deepen penetration.
Elumelu specifically advocated for an increase in Life insurance to N20 billion as well as N30 billion for Non-life insurance – as well as raising the capital base of insurance brokers to N1 billion.
This was just as the Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, said the administration of President Bola Tinubu will continue to support market development initiatives of the National Insurance Commission (NAICOM) and ensure budget provision for the insurance of strategic national assets as well as giving consideration to insurance in all national development planning.
Both spoke at the opening of the 2023 National Insurance Conference with the theme: “Redefining Safety: Insurance Solutions for Public Buildings and Buildings Under Construction”, which was organised by the commission in Abuja.
Represented by Permanent Secretary, Ministry of Finance, Mr. Okokon Ekanem Udo, the minister also vowed zero tolerance for non-settlement of claims by operators.
He added that owing to the importance and potential of the insurance sector, the current administration will continue to support the growth of the industry to contribute meaningfully to the growth of the economy.
However, delivering a keynote address at the occasion, Elumelu, also recommended that all insurers should mandatorily contribute 0.5 per cent of total revenue to drive industry awareness for five years.
The conference also coincided with the launch of the Insurance Sector 10-year Strategic Roadmap and the Guidance Note for the Insurances of Government Assets and Liabilities.
He said the recapitalisation of the industry was long overdue, noting that this will result in increased insurance penetration.
He also called for stronger punitive enforcement measures for people who avoid contractors’ insurance in construction to ensure that due process is followed and in the event of any unforeseen incidents, insurance is able to act as a risk mitigant.
He said NAICOM must work with relevant government bodies to ensure compliance and enforcement of the provisions of the laws governing insurance.
In the areas of claims settlements, Elumelu said, “The insurance industry still has manual, inefficient processes, especially around critical issues such as claims payments.
“Insurance companies in the US and Europe can pay out claims in minutes with little human intervention. We should aim for no less. This is my charge to practitioners in the room here today.
“How do you instil public confidence in the insurance sector, if the impression is that insurers do not pay claims on time?
“Or that claims payments turn into a back-and-forth onerous conversation between the customer and insurance company. Unprofessionalism must be excised, and we must bring discipline to the sector.”
Furthermore, he called for the review of the dichotomy in insurance authorisations/licences between life and non-life, adding that consolidated operators should have N50 billion.
He said, “Let us use regulation to shape behaviour and enforce compliance”, adding that “NAICOM should focus on substance and things that will shape the sector and stop approving adverts. Use that time for more important aspects of regulation and save taxpayers money for more catalytic actions”.
Elumelu among other things said, “Our mantra going forward must be that everything under insurance should be less onerous – for our customers and for practitioners.
“We cannot stifle creativity at a time where there is already a strong cultural bias against the concept of insurance.
“We must encourage Nationwide Insurance Awareness campaigns. We need to make Insurance a lifestyle by continuously enlightening Nigerians on its numerous benefits.
“NAICOM should work with Insurance companies to run continuous insurance campaigns nationwide in local languages that resonate with the people.
“All insurers should contribute part of their annual profit before tax to help create national awareness about insurance.”
Also, speaking at the conference, Commissioner for Insurance/Chief Executive, NAICOM, Mr. Sunday Thomas, maintained that under his leadership, the commission 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 the Africa largest economy.
He said in terms of its performance, the industry premium income grew at an average of 13.6 per cent from a premium income of N282 billion to N726.2 billion between 2014 and 2022.
Total assets of the sector also grew at an average of 12 per cent from N827.5 billion in 2014 to N2.33 trillion in 2022.
Thomas, however, pointed out that notwithstanding the growth that had been sustained, the roadmap enumerated some of the challenges affecting the desired growth of the industry which had persisted.
These include talent gap, comparatively low public awareness, insurance affordability, lack of trust and confidence in insurers, cultural and religious bias, inadequate distribution channels, and low enforcement of insurance, among others.
He added that the theme of the conference was only one out of numerous efforts of the commission aimed at creating the needed awareness of the general public of compulsory insurance.
He said the platform was also created to strengthen collaboration with relevant government and non-government agencies and other stakeholders.
He said, “This is being done to ensure that enforcement of all classes of compulsory insurances across the country is carried effectively. We hope that the engagement will stimulate discussions that will be beneficial to all the participants.”
Also, speaking on insurance and technology, Chairman, Zenith General Insurance, Mr. Jim Ovia, stressed the need to deepen insurance penetration in the country by exploiting the potential of technology.
James Emejo and Ebere Nwoji
Follow us on:
