Regulator's expectation from players in new insurance regime
The insurance industry regulatory authority, the National Insurance Commission (NAICOM), has no doubt set an unprecedented future that will make the insurance industry attractive for investors and exciting for policyholders. The new regime, when achieved, would create opportunity for good returns on investment and ensure that policyholders get the best of service delivery.
As NAICOM puts it, "it is expecting an insurance industry of choice among emerging markets, noted for high-market capacity, transparency, efficiency and safety, to attain the position of one of the 20 largest insurance markets in the world by the year 2020."
Much as this target looks realisable going by the commission's foundation through its Market Development and Restructuring Initiative (MDRI), there is a new responsibility on the part of the operators if the project must succeed. While NAICOM is therefore to open the opportunities and create the necessary enabling environment, the operators must rise up to their responsibilities, and tap from these opportunities to grow their premium. In a market analyst opinion, they must create innovative products that would appeal to the insuring public, meeting their needs and solving their problems.
Besides that, there must be that willingness to market the products across nooks and crannies of the country, and with that, a reasonable insurance culture would have been created among the populace, the analyst stated. Just as Fola Daniel, commissioner for insurance puts it, "our responsibility is to develop and to open the available market so that the operators can go in and make money," saying the commission expects that the operators quit from their arm-chair attitude to insurance and swiftly move with the commission to take advantage of the emerging opportunities.
George Onekhena, deputy commissioner for insurance, noted that during the MCPD Training Programme of the Chartered Insurance Institute of Nigeria (CIIN) in Lagos that the project was set to make a difference in the contribution of the industry to national development.According to Onekhena, while NAICOM is ready to provided leadership, operators must show commitment, sustained commitment and action.
The MDRI focus includes enforcement of compulsory insurance products in Nigeria; sanitisation and modernisation of insurance agency system; wiping out of fake insurance institutions and products; introduction of risk-based supervision; bridging the skills/gap in young insurance practitioners, and building consumer trust and confidence in the industry.The benefit expected of the initiative is the growth in gross premium from N164.450 billion in 2008 to N1.0 trillion by 2012.
Others include increase in insurance premium per capital from the current N825.00 to N7, 500.00 by 2012. •Indirect projected revenue to NAICOM to increase to N12 billion • Increase revenue to Fire Service by way of fire service maintenance fund •Creation of about 250,000 jobs in the insurance industry overtime •Lowering of insurance gap from 94 percent to 70 percent •Increase in insurance contribution to GDP from 0.72 percent to over 4 percent •Building consumer awareness and confidence in the Nigerian insurance market and •Consolidation of the market to about 50 percent of the current number of operators in the underwriting and broking segments