THE National Insurance Commission (NAICOM), has expressed optimism that the Nigerian insurance industry can reach the N1 trillion Gross Premium Income (GPI) mark by the end of 2023.
The assurance was given by Mr. ‘Rasaaq Salami, the Head of Corporate Communications and Market Development of the National Insurance Commission (NAICOM) last week during a media briefing shortly after Insurers Committee Meeting held in Lagos.
He hinged his optimism on the fact that the industry has done well both in the area of gross premium income and in the area of claims payment in 2023.
Also, the NAICOM has warned insurers against dealing with unlicensed brokers and agents to facilitate insurance businesses, just as there are indications that the kick-off date for Risk-Based Capitalization (RBC) may come to fruition in 2024.
Mr. Salami said, “Giving the breakdown of the industry performances since 2021 till date. In 2021 we had a gross premium income of N621 billion and by 2022 we had N727 billion and by the half year of 2023 we had N551 billion. With third quarter report, we have already exceeded the annual premium of last year and by the time we close the year we might be hitting the N1 trillion mark and based on that assessment we think the industry has performed very well. We may not be where we are supposed to be, but we have moved from where we were to another height.”
Also, the chairman of the Publicity-Sub Committee, Ebelechukwu Nwachukwu, listed digitalisation, product development and ongoing engagements with stakeholders as some of the focuses of the industry in 2023, which will continue in 2024.
Ebelechukwu who also doubles as the Managing Director/ CEO of Royal Exchange General Insurance Limited, (REGIC), added that customers now have various platforms to reach their insurance companies more than ever before in 2023, while assuring more of these channels will be introduced to boast insurance penetration and businesses.
She pointed out that the customer is serious is the focus of almost all underwriters not just selling the products but customers’ experience when they do business with insurance companies are the most important.
Nwachukwu stressed the importance of continuous improvement in risk-based supervision for the growth of the insurance industry and the implementation of risk-based pricing.
She noted that the committee’s transformation roadmap includes proposals for increased awareness, enhanced market conduct, insurer partnerships with telecommunications and non-insurance channels, digitalisation improvements, and the deepening of the talent pool within the insurance sector.
Mr. Salami assured stakeholders that the finalisation of Risk-Based Supervision (RBS) is progressing, but stressed the exhaustive nature of the exercise, clarifying that the commencement of Risk-Based Capitalisation depends on the completion of Risk-Based Supervision.
On how the Commission is addressing outstanding claims, he said that NAICOM has mandated the Nigerian Insurers Association (NIA) to publish details of outstanding claims in prominent newspapers, noting that the initiative aims to facilitate policyholders in claiming their settlements.
He said, “The NIA is given a two-week timeline to execute the publication, with a three-month monitoring period to assess improvements. If progress is lacking after three months, regulatory action may be taken.
“The report from the insurance company is that some of these outstanding claims are not as if the companies are not really ready to pay, but the policyholders, some of them have not come up with the appropriate documentation to conclude on this process. And that is why we gave this directive from the insurance committee that it should be done.
“The other improvement and the addition today is that the NIA has been mandated to do this publication within the next two weeks for the next three months. We will monitor and watch, take statistics of what has been done, if after three months there are no improvements then we take it up as the regulator that is when we can now ask the insurance companies to go out there and do their publication”.
Mr. Salami reaffirmed NAICOM’s commitment to the passage of the consolidated insurance bill, assuring that the industry has aligned in this regard.
Also, Mrs. Nwachukwu stated that NAICOM observed the practice during the ongoing Risk Based Supervision(RBS) in some insurance companies, saying, “The regulator spoke to us very strongly, to ensure that all the agents and brokers we deal with are licensed up-to-date or renewed, as against doing business with brokers with expired licenses or unregistered agents.”
She added that NAICOM also recommended self-regulation to underwriters, regarding Risk Based Supervision, noting that the Commission directed that boards of the various underwriting firms should approve and implement whistle-blowing policy in their respective companies.
Nwachukwu said the committee also agreed on the need for the insurance industry to increase awareness of annuity and continue to build trust to ensure that the product line grows significantly, and added, “With the amount of funds in the pension industry, we should expect a lot of that to be downloaded into the insurance industry through annuity.”
She pointed out that the insurance operators further discussed the need for NAICOM to continue to engage the National Assembly to ensure the passage of the Consolidated Insurance Bill.
Nwachukwu noted that insurers have also begun the process of harmonising the ECOWAS Brown Card to ensure that the same certificate is issued across all countries using the brown card, noting that the insurers also took a presentation from KPMG, as part of its planning for the insurance industry’s 10 years Transformation Roadmap.
According to her, eight pillars were proposed to the insurance industry as part of the roadmap, which includes continuous improvement of the regulatory environment.
Nwachukwu said as part of the proposal, Risk-Based Pricing and Risk-Based capital would become paramount, stressing that increased awareness and improvement in market conduct and ethics were proposed as part of the transformational roadmap to the future that the industry desires.
She said in support of the national economic growth plan, the insurers were charged with digitalisation and improvement of talent pool of the insurance sector.
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