Industry numbers upbeat as IFRS, technology improve data collection
Compliance with International Financial Reporting Standard (IFRS) and increasing investment in technology by both industry operators and regulator, the National Insurance Commission (NAICOM) has given a boast to data collection and information communication in the insurance industry.
These have also impacted positively on the numbers, which are upswing as well as ability of companies to comply with regulatory requirements and make returns to appropriate authorities as at when due.
Nicholas Opara, director, Supervision of the Commission speaking on the theme “NAICOM and Insurance Business Regulation in Nigeria: The journey so far” during the 2014 Seminar for Insurance Correspondents organised by the Commission in Ilorin said the implementation of IFRS, premium collection and other regulatory guidelines have impacted on data collection in the industry.
He said that for instance, ahead of June 30 deadline given to insurance companies to submit their annual audited returns, 40 insurance companies have already submitted, 26 approved, 13 reviewed and returned to their companies for updating and one currently being reviewed by NAICOM.
“This is the first time we are seeing this level of compliance, and i am optimistic that before long many of the companies would have submitted and gotten approval”
Opara observed that this has also improved data collection and in the industry, stating that all the figures for 2014 are in as well as figures for the unaudited accounts for first quarter 2015.
On the numbers, which industry regulation has also affected positively, Opara said “Insurance business regulation under NAICOM has witnessed a tremendous turn around for good as amplified by growth in industry Gross Premium Written of less than N100 billion in 2007 to over N300billion in 2014. This is as industry total asset also rose to a whopping N711.4 billion, from about N347.1 billion in 2007, indicating a 104 percent.
The statistics according to Opara puts total liability to date at N422.7 billion; shareholders fund N352.5 billion, while net profit of the industry stands at N28.430 billion. This is as first quarter 2015 unaudited accounts show the industry total assets rising to N709.3 billion.
Opara excited about developments in the sector pointed that the coming of Fola Daniel in 2007 brought the golden era of the Nigeria Insurance industry, as regulations during this period have enhanced cash flow, policy holder protection, liquidity and ability of companies to meet their claims obligation.
This growth makes Nigeria the second biggest insurance industry in Africa, after South Africa having been in number 5 in 2007, says Fola Daniel, commissioner for Insurance.
Sunday Thomas, director general, Nigerian Insurers Association (NIA) said the industry has insured 3 million vehicles to date, as captured in the Nigerian insurance industry data base(NIDB), a technology project of the NIA targeted at checking fake motor insurance certificates. Thomas said this is a huge improvement from what it has been about 2007 when only 5000 vehicles were insured.
He said the enforcement of the motor third party insurance to large extent is helping to reduce the incidence of fake insurance certificates, assuring that with time and cooperation of relevant stakeholders a lot more success would be achieved.
Meanwhile, he informed that the marine module is functioning now, stating that the industry is presently engaging key stakeholders including the banks, Customs, clearing agents, the CBN among others to ensure proper implementation.
Modestus Anaesoronye