The National Insurance Commission (NAICOM) is proceeding with its plans for various policies and initiatives to develop the insurance sector despite challenges such as the suspension of the recapitalisation exercise, COVID-1, #EndSARs and others.
Apart from growth, NAICOM aims to consolidate the sector, develop human capital, ensure financial inclusion, enacting a new insurance law, tap the African continental free trade agreement, and improve efficiency in the supervisory processes, according to a report in The Nation.
The Commissioner for Insurance, Sunday Thomas, told reporters, “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.”
He added, “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.”
NAICOM registered four new insurance companies and one reinsurer last November, the first such licensing in around 35 years.
“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,” Mr Thomas said.
He said that market development initiatives would include enforcement of compulsory insurance, introduction of microinsurance and expanding takaful.
Although the recapitalisation mandated by NAICOM on insurance and reinsurance firms has been suspended by the court, the regulator is optimistic that it will vacate the injunctions and continue the exercise.
Human capital development
NAICOM identified the poor quality of human capital as part of the cause of why some insurers are ailing. Mr Thomas indicated that there are inadequate human capital for underwriting, claims and investment management; inability to recruit and retain quality personnel; as well as inadequate training and manpower development.
“We are pursuing the issue of human capital development with operators by making arrangements to have as many actuaries 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.”
Mr Thomas said the financial inclusion strategy has been central to the Federal Government’s developmental plan and the Commission has over the years invested hugely in the development of financial inclusion mechanisms which include the introduction of microinsurance and takaful.
So far, some milestones have been recorded in this regard with three standalone microinsurers and four takaful companies already granted approvals.
The effective deployment of technology to facilitate operations is among the key areas NAICOM will be emphasising this year, said Mr Thomas. “Digitalisation of insurance business is no longer an option, but an imperative which we and the operators have to work towards its actualisation.”
African Continental Free Trade Agreement
Mr Thomas said, ‘’We believe that with the free trade area, movements of goods will be enhanced. It is important to us in the insurance sector because last year, we started something that would tend to harmonise insurance transactions among West African English-speaking countries.”
He added, “e expect this to enhance our access to businesses from another jurisdictions. With bigger capacity, we will be able to retain more and also bring in more businesses to the country.”
Insurance Consolidated Bill
The commission is seeking for the passage of the Insurance Consolidated Bill, 2020 to drive the development of the sector.
Mr Thomas said, “We have so many compulsory insurances that one can hardly find in any other jurisdiction. The problem has been enforcement and lack of cooperation among operators. With the advancement and deployment of present-day technology it is expected that all compulsory insurances will be adequately enforced.”
The proposed insurance Bill now before the National Assembly, when it becomes law, will assist tremendously in growing the insurance sector, said Mr Thomas.