…NAICOM reels out 2024-2033 agenda
From Uche Usim, Abuja
To ensure the insurance sector provides stronger buoys for the economy, the Chairman of Heirs Holdings, Mr Tony Elumelu, has pushed for an increase in the capital base of insurance firms operating in the country.
Elumelu is proposing an increase in the capital base of life insurance companies to N20 billion and pegged that of non-life firms at N30 billion.
He added that insurance brokers’ capital base should be increased to N1 billion.
He also made a case for an urgent review of the dichotomy in insurance authorisations/licences
between life and non-life, adding that consolidated operators should have N50 billion minimum capital.
Elumelu pitched his views on Monday in Abuja at the 2023 National Insurance Conference organised by the National Insurance Commission (NAICOM) themed: “Redefining Safety: insurance solutions for public buildings and buildings under construction”.
According to him, the time has come to use regulations to shape behaviour and enforce compliance in the industry.
He advised NAICOM to 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.
“All insurers should mandatorily contribute 0.5% of total revenue to drive industry awareness for five years. The NIA should administer this professionally”, he said.
Elumelu said all impediments inhibiting insurance penetration and sectoral growth must be demolished so Nigeria reaps bountifully from the sector as it is obtained in many climes, including African nations.
“Our people have access to digital banking. I helped democratize banking, why are we not democratizing insurance?
“Our insurance industry is one that requires significant transformation. Insurance should be a national good, a roof for our people, a foundation for our infrastructure.
“The contribution of the insurance sector to our nation’s GDP stands at less than 1% (Agusto & Co)”, he stated.
He urged NAICOM and the government in general to make insurance a common right of every Nigerian citizen.
Elumelu said it was totally embarrassing that Nigeria has less than 2% insurance penetration, in a nation of over 200 million people, struggling to survive, amidst the harshest economic realities.
“In a society where people are not insured, they are exposed to financial uncertainties that not only affect them, but their families and communities”, he added.
With regards to insurance for buildings, Elumelu advocated for stronger punitive enforcement measures for people that avoid contractors’ insurance in construction to ensure that due process is followed and in the event of any unforeseen incidents, insurance is there to act as a risk mitigant.
“According to the Building Collapse Prevention Guild (BCPG), over the past 49 years, our country has recorded 533 building collapses. That is an average of 11 such tragedies per year. In 2019 alone, there were 43 recorded building collapses.
And these building collapses wreak havoc on Nigerians, with lives lost.
“A further estimated 36,000 buildings face impending collapse in the country.
“There is a role for insurance, but there are roles for professional associations such as: COREN, NIESV, NSE. This is a problem that requires a multi sectoral approach to holistically deal with the root cause of building collapses in Nigeria”, he advised.
The NAICOM Chief Executive Officer, Mr Olorundare Thomas, in his opening speech, revealed that the insurance industry, over the next decade (2024-2033), will sustain its transformation journey along seven strategic thrusts with the objective of achieving set goals.
“These are; to transform the regulatory environment to sustain the industry growth; transition to risk-based capital model; promote insurance awareness and adoption; broaden insurance product offerings and improve effectiveness of distribution channels; enhance digitalization of the insurance industry; deepen the industry’s talent pool and capabilities and support Nigeria’s economic transformation and sustainability agenda.
He added that the Commission, on his watch, has remained resilient and focused on implementing initiatives that will foster development of the Nigerian insurance industry.
Earlier in his remarks, the representative of the Finance Minister, Mr Okokon Udoh, emphasized that the insurance sector was vital to the growth of Nigeria.
He said the sector demonstrated resilience during the COVID-19 pandemic and paid over N11 billion as compensation to those whose properties were damaged during the ENDSARS protest.