The National Insurance Commission, NAICOM, has restated its determination to ensure that the unreached market in the nation’s insurance sector is explored to deepen insurance penetration and increase the sector’s contribution to the nation’s Gross Domestic Product (GDP) in the years ahead.
The Commissioner for Insurance, Mohammed Kari, who gave the assurance at at the Risk Frontiers West Africa 2018 conference in Lagos, said that the target would be realized by the commission through collaboration with all relevant stakeholders and agencies.
He explained that the Commission had initiated some specific regulatory measures, including improving insurance penetration and insurance literacy level and the Proposed Tier Based Solvency Minimum Capital (TBMSC), to make insurance more attractive to the uninsured in the country.
Represented at the event by the commission’s Director for Inspectorate, Pius Agboola, the CFI pointed out that NAICOM had improved insurance penetration by introducing stand-alone full licence for Micro Insurance organisations while two Takaful Insurance licenses had been issued.
This is even as he hinted that Bancassurance partnership with conventional banks had commenced while microfinance banks (MFBs) plan remained on track.
He expatiated: “Partnership with relevant agencies and state governments on compulsory insurances implementation is in progress while distribution channels are being expanded.
“Co-ordination with relevant government agencies for effective insurance of government assets is ongoing while we have partnership with relevant government agency like Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) on agriculture index insurance.
“On the proposed TBMSC, we plan to encourage specialisation among insurers; strengthen insurer’s capacity; Improve insurance penetration; attract foreign investment; and Encourage healthy competition. However, the importance of collaboration towards reducing insurance gaps in developing nations cannot be over-emphasised”, Kari added.
Noting that the collaboration between NAICOM and other foreign regulators is crucial for experience sharing, the NAICOM boss said that the collaboration among insurance operators, other operators, NAICOM and other partners such as EFInA, GIZ (a German Corporation for international o-operation), A2II (Access to Insurance Initiative), MFW4A (making Finance work for Africa), among others, remained crucial in the drive to grow the insurance industry.
He pointed out that insurance should be perceived not as a protection mechanism, but more importantly as a partnership that allows individuals and businesses to spread their wings and go to where otherwise they would not have dared to.
Speaking on insurance protection gaps, Kari described uninsured losses as a proportion of total economy losses; uninsured people as a proportion of the total population; insurance actually purchased against economically beneficial coverage; actual insurance penetration against benchmark and financially excluded adults in insurance as a proportion of total adults of a country.
He listed some of the noticeable insurance gap areas for mature markets and economy as natural catastrophes, cybercrimes and risks; healthcare; pensions; and emerging risks, adding however thatfor frontier and emerging markets such as Nigeria, there are noticeable gaps in these areas.
The industry regulator , however, explained that insurance gaps in certain types of insurance may be more pronounced in one country than the other and that NAICOM has been trying to bridge the insurance gaps by working at root causes and providing remedies.