Expectations are high among chieftains of the Nigerian insurance sector for the newly appointed minister of finance, Mrs. Kemi Adeosun. The chieftains want the minister to help with the passage of Insurance Bill which has been at draft level for long.
They also want her to restructure the economy and put in place effective policy measures that will deepen insurance penetration, enforce compulsory insurances, marine insurance, among others.
The sector like other sectors within the financial system is being regulated by the National Insurance Commission (NAICOM) and directly under the supervision of the ministry of finance.
The sector which has a record premium income of N300 billion has been affected by the recent foreign exchange crisis. It has reduced the sector from number two position in Africa to number four in terms of volume and reduced insurance penetration to one per cent.
The Director-General, Nigeria Insurers Association (NIA), Sunday Thomas, said he is excited that the nation now has a minister of finance who will be responsible for the activities within the insurance sector. He said he expects the minister to end waste in government assets by imbibing insurance culture.
He added that there is also the need for her to quickly deal with the foreign exchange situation, noting that Nigeria’s image on global insurance map is low because of the exchange rate problem.
According to him, the insurance sector has dropped from the second biggest sector position in Africa to fourth position, falling behind South Africa, Morocco and Egypt.
He is however optimistic that there are always rooms for improvement.
He added that through good policy measures by the minister, the situation of things in the country will also improve.
He said practioners also expect that the minister will help look into the problem of non-payment of premium on insurance of government assets including the Group Life Insurance Policy (GLIP) for government workers, manage micro economic variables such that citizens have more money in their pockets and help in fast-tracking the passage of the insurance law.
He said: “I listened to her when she appeared before the Senate; no doubt, she is a visionary woman. We as insurers expect that not only will the issue of asset acquisition be uppermost in her agenda but also asset maintenance and the deployment of insurance as a mechanism for maintenance of state assets. This I believe will be good for our economy at this point in time.
“We have had incidents where assets acquired by government were destroyed and were either replaced by taxpayers’ money or never replaced at all because they could not generate new funds to replace them, and therefore, we lost their use. We believe that proper structuring of the nation’s finances will go a long way in curbing waste in the system.
“A lot of people in the country are hungry and I believe that this problem can be solved through economic restructuring and effective policy measures that can put more money in the pockets of the people. She is not going to do it alone, it will be in conjunction with other ministers. I believe it will assist and insurance too will become more interesting.”
On the Insurance bill, he explained that it is an executive bill which has been at a draft state for quite a while.
“We believe it will be uppermost in her agenda. I participated in the committee that drafted the bill. There are aspects of it that we believe can fast track the sector and also empower the regulator to carry out effective oversight functions. If the bill is passed, since it is an executive bill, she will have the responsibility to push at the executive council so that the right thing can be done and it can be passed to the National Assembly, which we also believe can quickly pass it into an Act.
“We also want her to look into marine business as she is also responsible for supervision of the Nigeria Custom Service. We are experiencing huge gap in the area of marine insurance. Section 67 of the Insurance Act, 2003 makes insurance of imports compulsory. Any import must be insured with company domiciled in Nigeria and we hope that she will make sure that every good that comes into this country carry the genuine cover.”
The Director- General said to aid the customs, operators have extended their industry portal, the Nigeria Insurance Industry Database (NIID) to cover and checkmate fake marine certificates.
Thomas also noted that just before the end of the last administration, the former minister of finance, Mrs. Ngozi Okonjo-Iweala, held a summit with the sector for the first time and showed readiness to help move the sector forward. He said agenda were set and committees were formed.
He urged the new minister to continue from where Dr. Okonjo-Iweala stopped and improve on the modalities laid on ground.
The Managing Director, LASACO Assurance Plc, Olusola Ladipo-Ajayi said he has confidence in the minister, stating his acquaintance with her on an insurance matter when she was Ogun State Commissioner for Finance.
Ladipo-Ajayi, who is also a past chairman of the Nigeria Insurers Association (NIA), said he had interactions with her ministry on some insurance issues. He said she was very cooperative on the matter and helped resolve the issues amicably.
He believes that in the light of the fact that she understands insurance, she will help grow the sector.
He said: “I believe that she will help drive insurance penetration in the country and help with the passage of the Insurance Bill which is consolidation of insurance laws among other things’’.
The Managing Director, Staco Insurance Plc, Shakiru Oyefeso, on his part appealed to the minister to promote insurance in her policies. He expressed belief in the administration of President Muhammadu Buhari whom according to him, understands the need for insurance in the country.
He added that the former Governor of Lagos State, Babatunde Fashola who is now the Minster of Power, Works and Housing also understands the benefits of insurance.
He pointed out that insurance is a way to fight against poverty and any government that knows his onions will boost insurance penetration in the country.
“Government should enforce compulsory insurance to curtail national waste. It must look inwards and not continue to dip hands into their running funds when there are losses. Government should imbibe insurance in all their activities so that they can mitigate losses that Nigerians suffer. The amount of premium that will be paid will not kill them. This will in turn grow the insurance companies and also create employment,” he said.
He stressed that risk management is crucial for any government, adding that insurers have good personnel that can help in its risk management.
