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The inauguration of insurers committee by the National Insurance Commission (NAICOM) is the latest step taken to reposition insurance practice which over the years has been bedeviled with numerous challenges. Chuks Udo Okonta in this report examines the initiative and other sundry matters.
Over the years, the insurance industry has never lacked committee; seminars; workshops; agreements and important meetings aimed at repositioning it operations. The sector can pass as one of the sectors blessed with wonderful resolutions as no year passed without each arm organising events on how to move their business forward.
Though the events where often segregated, the operators do converged as they are all in one business – to mitigate risks. To harmonised their objectives, they came up with the Insurance Industry Consultative (IICC) which was established to act as the unifying voice of the industry, representing the industry on national issues affecting the Insurance; be a clearing house for information about the industry; act as an interfacing body between the industry and other parties as well as overseeing the resolution of intra and inter sectorial conflicts.
When the IICC was muted, it was expected that it would be chaired by the Commissioner for Insurance, but the idea was technically dodged by Fola Daniel, who was the Commissioner when the committee was inaugurated. His reasons was that as government’s representative, he would not be able to push most of the agenda. On that ground, the leadership was ceded to the Chartered Insurance Institute of Nigeria (CIIN) which its past President Wole Adetimehin, initiated the idea.
The IICC, since operations has been meeting and tackling issues in the industry, prominent among them is the ill-fated Nigerian Council of Registered Insurance Brokers (NCRIB) bill, which was killed by the stakeholders at the public hearing organised by the seventh assembly.
Also, the committee was able to organized the maiden mega conference, which was considered a success by the operators.
When NAICOM announced its decision to constitute an Insurers Committee, there was insinuations in some quarters as to while another committee while the IICC is just striving to take its stand.
Stakeholders wonder what the commission hopes to achieve which it cannot achieve via the IICC. Some termed the committee duplication of responsibilities, while others considered it a means whereby someone wants to have an initiative tied to his regime.
The Commissioner for Insurance Mohammed Kari, who shed light on the initiative said: “The Commission is not unmindful of the challenges confronting the industry that requires the collective and decisive efforts of all stakeholders to navigate successfully to safety.
“It is on this strength that the Commission recently inaugurated an Insurers Committee whose membership constitute Chief Executive Officers of all Insurance Companies, leadership of all trade associations and of course the Commissioner for Insurance.
“This Committee is to meet regularly to discuss issues and challenges of the sector and proffer possible solutions towards moving the industry to a higher level.
“It also provides the operators with first-hand information and the opportunity to contribute to intended policies, circulars and regulations of the Commission prior exposure to the market. This way, grey areas and of conflicts would have been resolved between all the parties at the committee level.”
Good as the remarks by the commissioner seem to be, industry observers were amazed when the commission recently published the delisting of 108 insurance brokers due to infractions.
The observers who where worried, about the huge number, were also quick to asked while such would happen at a time the commission had put a forum to resolves all issues.
Operators were also not comfortable with the allegation by the commission that they use shareholders as stooges to cover mismanagements.
The observers believed the issues would have been tackled at the committee level as promised by the commission.
The National Coordinator Independent Shareholders Association of Nigeria (ISAN) Sir Sunny Nwosu, urged the commission to concern itself with developing the industry as against causing problems that will stem growth of the industry.
The observers charged the commission to intensify efforts to promoted the sector which is presently ranked about 65th in the world and sixth amongst the leading eight insurance markets in Africa – South Africa, Egypt, Morocco, Tunisia, Kenya, Nigeria, Algeria and Mauritius – and contributes about 0.7 per cent to the Gross Domestic Product (GDP) of the economy. And density (premium per capita) put at approximately N1, 200 per person, compared to South Africa’s N102, 000 and Kenya’s N3, 120.
They expressed worry that with a population of about 170 million, only about five to 10 per cent of those who should be insured are covered by any form of insurance, compared to the situation in most developing and developed countries where up to 90 or 95 per cent of the population are insured in one form or another.
The commission was also asked to urgently show its road map on attaining the target of growing the number of direct jobs from the current 30,000 people to 100,000 people in the next three years, and to more than 300,000 people in the next decade, as reached in 2014.
Though NAICOM has accused operators of failing in the past to take advantage of the huge potentials in the market and as well, the various market development initiatives it introduced to expand their businesses, grow their revenue income and improve on their bottom-line to guarantee enhanced dividend pay out to their shareholders. It is time for the regulator and operators to work their talk as against setting up committee at every level to talk, reach resolutions which are not implemented.