Expert foresees improvement in insurance sector environment
With ongoing reforms in the insurance sector and growing interest of foreign players in the local market, Nigeria’s insurance industry is skewed towards better operating environment, an analyst has said.
This, he believes, is hinged on improved regulation being driven by the Fola Daniel led National Insurance Commission(NAICOM), which has enhanced operational rules for operators and increased consumer confidence.
Justus Uranta, former managing director, Niger Insurance plc, said the current leadership at NAICOM has consistently driven a lot of programmes and policies to enforce insurance rules, which will not only increase consumer confidence but also increase shareholders value.
Uranta, who left the industry about three years ago after about 35 years as an operator, said looking forward, there is no doubt that the insurance environment would get better going forward.
“Insurance can only get better and I give kudos to the National Insurance Commission (NAICOM). In all honesty, they have made a lot of efforts to create an enabling environment. I am seeing better insurance environment as we move ahead.”
“I commend the commissioner who may be having just a few months in office. It is my hope that the incoming commissioner will be more committed and ensure that the insurance business operate by the rules,” he explained. Uranta, who believes that operators have a big role to play, added that professionalism should be critical.
“Operators need to be more professional in their approach to the business. Some activities that tend to deter growth and development; for example, rate cutting and over-bloated commissions, should be completely discouraged to enable the industry grow.”
He said he was excited that operators are beginning to acquire professional knowledge, with a lot of people getting qualified in insurance exams, stating that this was critical in driving the new insurance industry particularly with presence of many foreign partners.
“The foreign operators investing and coming into Nigeria want to see high level professional practice among us and want to see how professional we are in following the rules of the game,” Uranta said. On some of the recent acquisitions and mergers going on in the industry, Uranta stated that quite a number of establishments are at one stage or the other trying to consolidate their marriage plans. “We are going to see more acquisitions and mergers in the market, and it can only get better,” he stated.
On why some of the foreign firms that have entered the country in the last two years were yet to make significant impact on market penetration and volume, Uranta observed that merger of institutions with different characteristics takes time to conclude.
“Marriage of strange fellows is not what you conclude overnight. The foreign companies coming in are careful and those being acquired are also careful, so that it does not bring either institution to death,” he said.
“But over time, I think their impact would begin to manifest as a lot of awareness is being carried out, which means increased patronage and increased business volume and subsequently growth,” Uranta stated.
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