NAICOM pushes to reduce Nigeria/South Africa insurance gap

The new board of the National Insurance Commission (NAICOM) inaugurated two months ago would focus on market development for insurance industry that will bring about significant contribution of the sector to the nation’s gross domestic product (GDP).

This, according to the Board, is a big challenge facing the industry, since insurance sector contribution to GDP is abysmally low at less than one percent, whereas South Africa is about 12 percent.

Chibudom Nwuche, chairman, board of NAICOM, who made the disclosure weekend at the end of the Commission’s board meeting held in Lagos said, “As we are all aware, the insurance industry contribution to GDP is less than one percent, whereas that of South Africa is about 12 percent. So, we have a long way to go and must work hard to bridge this gap and make the sector more relevant to our economy.

According to him, the board will support the Commission’s efforts at creating awareness, deepening understanding about insurance and enhancing consumer acceptance by instilling consumer confidence through prompt settlement of claims. “Prompt settlement of claims is the only way you can make people embrace insurance,” he added.

Nwuche, who is a former speaker, Nigerian House of Representative, stated that part of agreement in the board meeting was the decision to enforce insurance rules and regulations that will engender market discipline. “In this respect, there would be no sacred cows as NAICOM would ensure that the law applies to everybody and there would be no respecter of person/s.

“We shall promote good corporate governance to align with international best practice. This is even as he hinted that NAICOM was working with other financial services regulators to make corporate governance code a legislation.

“While we will continue to sensitise all tiers of government to comply with the provisions of the law on compulsory insurances, we shall continue in our efforts to see that the new insurance law before that executive arm of government gets speedy passage when it get to the National Assembly.

“We shall use our goodwill at the National Assembly to fast track the passage of the new insurance law when it is presented to the National Assembly because we believe that the provisions of the new law would enhance supervision of the insurance industry and boost market development,” Nwuche said.

Fola Daniel, commissioner for insurance, who responded to journalist questions raised said the delay in the passage of the new insurance law which has started was kick started in 2009 were as a result of some hiccups at the ministry of finance following changes in leadership.

“Since 2009, when we started this, we have had about four ministers and of course no minister will rush a new Bill to the federal executive council without first of all trying to understand the integrity of the Bill.

“Happily, we have dotted all the i’s and crossed all the t’s; and it’s been presented to the Federal Executive Council and there was a huge understanding. We have also had retreat with various committees of the National Assembly concerned with oversight function on insurance and we are hopeful it will have a smooth ride at the legislature.

On the success of insurance reception of insurance at the government level, Daniel said following the series of awareness and consultation with the different tiers of government, many state governments have become desirous of taking insurance as means of managing their risks.

By: Modestus Anaesoronye