The National Insurance Commission (NAICOM) will launch reforms, strategic plans, and digital development schemes to improve the insurance sector in Nigeria, according to Mr Sunday Thomas, the Commissioner for Insurance, in a speech last week.
In this respect, in its 2021-2023 strategic plan, NAICOM has outlined five goals which include ensuring that public interests and policyholders are adequately protected, entrenching effective and efficient deliverables, ensuring a safe and sound Insurance sector, improving trust, as well as encouraging innovation and promoting insurance market development, said NAICOM's head of the Corporate Strategy and Special Duties Department, Mr Usman Jankara.
On improving trust and confidence in the Nigerian insurance sector, he noted market conduct failures, ineffective complaints and grievance management, challenges with distressed insurers, and unethical practices and money laundering have negatively impacted trust in the industry.
He said that NAICOM is set to institute good market conduct in the Nigerian insurance industry and ensuring a fair complaint/grievance management system.
On facilitating the fight against money laundering and terrorism financing, he advocated for effective management of troubled institutions and improved utilisation of the Security & Insurance Development Fund (SIDF).
Mr Jankara said that lack of understanding and awareness, fake insurance, poor market conduct and claims practices, insolvency and cumbersome liquidation processes, etc result in unsavoury experiences for policyholders with insurers.
He said the Commission is promoting improvement through a policyholders' protection scheme. He also said that enhancing enforcement of market conduct rules and monitoring the degree of customers’ satisfaction, and ensuring that government assets are adequately insured are captured in the plan.
On encouraging innovation and promoting insurance market development, Mr Jankara said that a high rate of innovative technology adoption will impact the future of the insurance industry.
However, he said, NAICOM is facilitating innovative and competitive practices in the industry through the regulatory sandbox, service-based competition, facilitating the attainment of the National Financial Inclusion target and access to insurance through alternative distribution channels, implementing the Principles for Sustainable Insurance and facilitating regional integration of the West African insurance market.
He warned that price competition drives premiums down to the level where that the risk of unmet contractual obligations would become reality.
He said the implementation matrix has been developed and approved, and the Corporate Strategy and Special Duties Department empowered to monitor and evaluate the progress of the plan and will periodically appraise the progress made in the course of implementing the plan.
“The indices for measuring success already included under each of the strategic goals will provide the basis for monitoring progress and to ensure that we are on track to successfully implement the plan,” he said.
Also part of the plan is the commencement of the Risk-Based Supervision policy.
Commissioner Thomas said that the relevant persons have been trained, the necessary skills have been acquired and the instruments that will enable implementation have been developed, adding that what is left is to do the finishing touches for the take-off of the policy.
On insurance awareness, Mr Thomas urged insurers to increase their budget for carrying out publicity.
“We are too far behind. Not much about insurance is known. The regulator will do its best but I tell you that the operators must cooperate with us for all of us to be on the same page”, he said.
Some of the 2021-2023 goals are a follow-up on the 2016 -2020 strategic plan with new milestones required to enable the Commission to accomplish its mission. Mr Jankara said that some of the Commission’s 2016 to 2020 strategic plans were not achieved due to the prevailing COVID-19 pandemic, among other factors.
“Our strategic plan has simplified what we will focus on and we are now more convinced that we will do much better this year.
“We want to have a stable insurance industry to compete globally and contribute to the country’s economy,’’ he said.