FINANCIAL sector operators have been urged to adopt risk-based supervision and risk-based capital to compete with their counterparts across the globe and remain relevant in managing their existing and potential customers’ risks.
The Commissioner for Insurance/Chief Executive Officer, National Insurance Commission (NAICOM), Mr. Olusegun Omosehin, made the call in a keynote address at the Chartered Insurance Institute of Nigeria’s year 2024 Professionals’ Forum held in Abeokuta, Ogun State, with the theme “The Insurance Industry: Transformation Strategies towards Expanding Market Reach”.
Mr. Omosehin, who was represented at the event by the Deputy Commissioner for Insurance, Finance, and Administration, Mr. Ekerette Ola Gam-Ikon, stressed the need for financial soundness and stability of financial institutions to hedge against the impacts of negative events in the world.
He said, “We are all aware that major events in the world such as the COVID-19 pandemic, economic instability, climate change, rapid technological advancement, changing behaviour of consumers, crises across different parts of the globe, soaring inflation, instability in prices and many more have a direct impact on global financial markets hence have now altered the way financial services are carried out.
“Financial soundness and stability of financial institutions have become more critical than we can ever imagine. The adoption of risk-based supervision and risk-based capital has become inevitable if we want to compete with our counterparts across the globe and remain relevant in the management of risks of our existing and potential customers.
“Innovation and sustainability are some of the major emerging issues today. The insurance sector must embrace innovation to meet up with the rapid market changes in consumer’s preference, tastes and lifestyle”.
He stated that the Commission had, after issuance of the regulatory sandbox, which is intended to accommodate innovations, created a dedicated Innovation-Hub Unit targeted at addressing gaps in innovation regulation and market expansion.
He said to actualise “the insurance industry of our dreams, meet the target of market expansion and growth, the industry must develop a wide range of new skill sets and orientation, attract and retain talents, diversify its products spectrum, improve its adaptability and agility, improve on transparency and openness, invest in technology, improve trust and confidence in insurance, have institutions that compete favourably with other sectors in terms of liquidity, capitalisation and expertise”.
Mr. Omosehin stated “The Commission is prioritising the issue of accessibility to insurance products across the country and is keen about increasing penetration. However, the conduct of insurance practitioners in building and maintaining the trust of consumers is our primary responsibility, and that will galvanize growth and deepen penetration in the country.
“Every other strategy we discussed above depends solely on a strong corporate governance culture in our entities. The Commission will always emphasize the importance of strong Corporate Governance practices in the survival of business entities”.
He the cooperation and support of all stakeholders is equally an integral factor to the success of the transformation strategies to be adopted for the growth and development of the industry.
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