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Chuks Udo Okonta
Some insurers seemed not to be comfortable with recent called for pegging of insurance capital base at N100 billion, Inspen can report.
The Director-General, Nigerian Insurers Association (NIA), Sunday Thomas, told this medium that the gradual implementation of the proposed Risk-Based Supervision (RBS) will help resolve the issue of capital requirement for insurance industry.
Thomas, said this while reacting to a proposal recently made by the Chairman of WAPIC Insurance Plc, AigbojeAig-Imoukhuede, that the capital base of insurance companies in the country should be raised to N100 billion.
“That is somebody’s opinion, but I want to think that a gradual implementation of the RBS will resolve the issue of capital,” he said.
Aig-Imoukhuede, who called for the increment at the KPMG Insurance Conference 2017 held in Lagos, said the current capital base does not enable the operators to underwrite big risks. He said that for the industry to witness any desired transformation it has to toe the path of the banking sector.
Represented by the Head, Sales and Distribution of Wapic Insurance Plc, Oyebode Ojeniyi, said there were some businesses going on in the country which the insurance companies was not in position to benefit from.
“Despite the regulator’s insistence that all transactions must have local content, today there are mega deals coming out in which even with the capital we are unable to participate. So a lot of transactions that are supposed to be retained in the country are still being taken out to developed markets. We need to recapitalize to the level that we are able to do deals and retain significant portion of revenue that is going out of the country,” he said.
The President Association of Registered Insurance Agents of Nigeria (ARIAN) Olamerun Gbadebo, who was not also comfortable with the proposal, said though the industry needs sufficient capital, the challenge plaguing the sector cannot be solely
solved by capital.
He urged those calling for huge capital to be cautious not to allow the injection of bubble funds in the sector, stressing that this time when most individuals are looking for where to stock their illegitimate wealth, is not when such call should be made.
According to him, what the insurance needs now is implementation of laws on compulsory insurances and trust from the populists, that would bring about buying of policies.
