Insurance

NAICOM charges insurance companies to reduce environmental footprint

Thomas

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Chuks Udo Okonta

The National Insurance Commission (NAICOM) has encouraged insurance companies to reduce their environmental footprint through internal operations and business activities.

Commissioner for Insurance Sunday Thomas, said this on Friday at the 2022 Insurance Directors’ Conference organised by College of Insurance and Financial Management CIFM) and NAICOM in Lagos, adding that this has become necessary as insurance remains the industry that ensures the survival of other industries.

He noted that the theme for this year’s Conference “Transforming the Insurance Industry Through ESG Principles: Directors’ Roles” was specially couched in view of the fact that the world is going through rapid changes economically, socially, and environmentally and, the need to bring Directors of insurance entities to speed on these developments to enable sustainability.

He maintained that role of board of directors in the survival and transformation of their establishments can never be over emphasized thus, this annual programme was meant to apprise the directors with the
developments in the industry and also equipthem with necessary knowledge that will enhance the value of their companies.

“We want to further encourage insurance companies to reduce their environmental footprint through their internal operations and business activities. I want to borrow the words of my dear sister, Dr. Yeside Oyetayo, Rector of the College of Insurance and Financial Management when she said and I quote “Insurance is the industry that ensures the survival of other industries, it has always risen to the risks associated with human challenges in the past, and climate risks require that insurers must be part of the solution” he said.

Thomas said the insurance industry globally is continuously undergoing profound
changes; adding that “we must admit that the disruption we are faced with is not just digital but also harsh market conditions, demanding customers, innovative new market entrants and regulations which are also some of the forces transforming the insurance industry.

However, wherever there is a challenge, there is an opportunity. And all the sources of disruptions can be harnessed to become a source of growth for insurers. While no one can predict exactly what insurance might look like in a decade, insurers can take several steps now to prepare for these changes.

He noted that each of the four Principles for Sustainable Insurance has actions in the areas of company strategy, risk management and underwriting, product and service development, claims management, sales and marketing, investment management, clients and suppliers, insurers, reinsurers and intermediaries, government regulators, policymakers and stakeholders.

“It is imperative that as an industry, we take precautionary measures by raising awareness within ourselves on the potential sustainability impacts of business transactions, and integrating these considerations into pre-emptive and holistic risk management processes,” he submitted.

He advised the directors as leaders of their respective companies, that it is instructive that they take deliberate steps at reconciling long-term with short-term goals, global expansion with local objectives, workplace and community issues; all of which must be united, while not losing sight of the basic goals of profitable operations and increasing shareholder value.

He said to facilitate economic prosperity, ensure environmental sustainability and social development, we must join forces with identified stakeholders to drive long term sustainable growth in the insurance sector for lasting benefits to all stakeholders.

“As an industry, we should draw on external knowledge and partnerships to keep pace with wider trends affecting not just the local but also the global insurance market. We must discover strategies to adapt and overcome further changes in the near future that may arise as a result of entrenching Economic, Social and Governance principles,” he submitted.

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