The National Insurance Commission (NAICOM) is raising insurance awareness.
The initiative, which includes creating financial literacy, benefits of insurance, claims processes and rights of the policyholder, is targeted at achieving massive growth in the insurance sector.
The Commission at an interactive session with Insurance Correspondents held in Uyo, Akwa Ibom State, said it intends to consolidate on its initiatives and adequately harness the great potentials of the Nigerian insurance sector for massive growth.
The Commissioner for Insurance, Fola Daniel, said the population of the country, if adequately harnessed, could give added advantage to the insurance industry and further develop the market.
He said the initiatives assure of an evolving insurance model, a better industry, a growing market and a brighter future.
Highlighting some of the initiatives, Daniel said the Market Development and Restructuring Initiative (MDRI) incepted in 2009, among others, was meant to enforce compulsory insurances and eradicate fake insurance policies in the country.
He said this initiatives have been vigorously pursued by the Commission across the six geo-political zones of the country.
He said: “I am glad that even though the N1 trillion target expected through the MDRI is yet to be attained, considerable progress has been made given available statistics.
“Going forward, the Commission would consolidate on the gains made so far and ensure proper implementation of these compulsory insurance products to be able to enhance the industry’s contribution to GDP.
“An emerging fact under this class of insurance is the interest currently being shown by various governments. A group of underwriters have come together to enforce the Motor Vehicle Third Party Liability Insurance in Imo State in collaboration with the State Government and the scheme is working very well. Another group of 19 underwriters are enforcing the Occupiers Liability Insurance in Enugu State in collaboration with the State Government and the Commission is working to get more states to embrace these models.
“They recognised the need to develop the retail insurance market which has remained grossly untapped considering the vast population of the country.”
The NAICOM boss noted that the Commission had recently launched the Delta State Micro Insurance Scheme at a ceremony in Asaba, the State Capital. Efforts are being made to replicate this model in other states.
He emphasised that as a regulatory body, their primary responsibility is to protect policyholders and safeguard investments adding that they have tried to ensure this in the provision of adequate regulations and effective supervision of the industry over the years.
He said: “Suffice it to say that the industry has witnessed considerable metamorphosis in recent times owing to the new reforms embarked upon by the Commission. Some of these reforms include but not limited to the introduction of Risk Based Supervision, migration to International Financial Reporting Standard (IFRS) from the Nigerian Generally Accepted Accounting Principles (NGAAP); Market Conduct Reforms, Claims Settlement Reforms, Financial Inclusion and combating financial crime, among others, all geared towards developing the industry and improving the general perception about insurance.
“The successes achieved so far in this drive by the Commission may not have been possible without the unflinching support of the industry operators. Where necessary, the Commission has not failed to open lines of discussion with the operators, especially through the NIA, NCRIB, ILAN and ARIAN on issues affecting them before arriving at decisions.
“We are aware that insurance is a business of selling promises. But when these promises made to policyholders and investors are not kept, it then becomes NAICOM’s business to intervene and ensure these promises are kept.
“In doing this, there is always going to be tension, apprehension, disagreements, among others, between the regulator and the stakeholders. This is healthy if only to engender transparency, good corporate governance, better management and appreciation of the laws governing the business. Notwithstanding the resistance from these entities, the Commission remains committed to providing leadership to ensure sanity, good ethical practices, development and growth in the industry.
He called on the media to support the Commission in this drive.
Assistant Director, Inspectorate, NAICOM, Sam Onyeka, while presenting a paper with the theme, “Regulation and Insurance Market Growth: The role of the media, said Nigeria must continue to focus on institutional factors to grow the insurance market.
According to him, insurance market growth is mainly driven by economic factors in developed countries, whereas it is largely driven by institutional factors in emerging countries.
He explained that with economic development, the contribution of institutional factors to the insurance growth would gradually decrease and be partially replaced by that of economic factors.
He said: “Given the net positive effect of institutional factors on the insurance industry where GDP is low, it is crucial for the emerging economies to adjust their strategy in order to achieve market growth.
“Regulatory strategies that can stimulate market growth are compulsory insurances to address underdeveloped demand, market conduct regulation to keep product simple and build trust through distribution channels and solvency regulation to improve insurer stability and increase capacity through risk-based capital requirements.
“Others include public risk mitigation that can make risk insurable and or cover available, premium subsidy that can help make cover available and increase demand while maintaining fundamental principle of risk-based premium and public private partnership to enhance market penetration.”
He said the Commission intends to adopt public risk mitigation, state insurance and public private partnership.
Deputy Director, Corporate Strategy, NAICOM, Babajide Oniwinde, speaking on Financial Literacy & Insurance Education: Issues & challenges, said financial literacy and insurance education need urgent attention because of some industry issues.
He said this is because insurance products are generally technical while market distribution system can be complex.
Oniwinde said full market development can be realised by awareness creation, which brings about inclusive growth.
There is need for ongoing coordinated action and collaboration among all key stakeholders, he added.
