Insurance industry positions for expanding economy

A major step towards strengthening the insurance industry for effective policy making and implementation targeted at positioning the sector for greater role in Nigeria’s expanding economy took place last week, with the inauguration of the ‘Insurers Committee’.

The Committee, which could be likened to the popular ‘Bankers Committee’ will provide a platform for all chief executives of insurance companies in Nigeria to sit with the regulator to discuss issues affecting the industry and proffer steps on developing the business with the goal of having an effective, efficient performance and improved contribution to the GDP.

Mohammed Kari, commissioner for Insurance during the inauguration of the Committee in Abuja said the insurance sector is indeed a key component of the Nigerian financial system considering that in most developed jurisdictions, the insurance sector accounts for a significant portion of the economy.

“As an emerging and transitional economy and in line with the change agenda of the Federal Government, the relevance of the insurance industry becomes more critical as a provider of capital, employment and security.”

Kari stated that as the country’s economy continues to develop, and with the attendant risks involved in economic expansion and growth, it is indeed imperative to consider the role of insurance as an important determinant to progress and development.

He stated further that the market in recent past had undergone substantial structural and regulatory reforms following market intervention and the evolution of the financial sector in the last decade, stating that the formation of the insurers Committee would initiate policies and facilitate implementation to drive the sector growth.

Kari observed that the task for the Committee is to significantly increase insurance contribution to GDP, deliver jobs in the industry, and widen access by growing the number of insurance policyholders in the country.

For government, Kari stated that there is need for the biggest stakeholder, Government to partner with the industry more, going forward.

“Government’s general attitude to insurance has to improve. There is low patronage of insurance by government and its agencies and the lack of effort to protect public assets. Even when it does, the funding is haphazard.”

“There is an apparent lack of Insurance expertise in the civil service as such government is not guided properly internally as it ventures to deal with the industry. The position of insurance is virtually non-existent in the civil service’s scheme of service, for the few insurance professionals are not placed properly to play their professional role.”

Other challenges which Kari hinted requires urgent attention is non-consideration of insurance law review, five year after; excessive and supposed unfair assessment modalities being used by tax authorities for tax computation of its finances”.

“We plead with the new government and the tax authorities to pick interest on this and continue with the engagement with the industry to find lasting solution to this problem, so that the industry can play the expected role of investible and developmental fund provider for the Nigerian economy.”

Modestus Anaesoronye