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Chuks Udo Okonta
The National Insurance Commission (NAICOM) is set to activate the industry’s change agenda with the inauguration of insurers committee by the Minister of Finance Mrs Kemi Adeosun.
The event which is billed for Thursday 19, 2015, at the Sheraton Hotel, Abuja will be attended by Chief Executive Officers of Insurance companies and will be chaired by the Commissioner for Insurance Mohammed Kari.
The Head Corporate Affairs NAICOM, ‘Rasaaq ‘Salami, told Inspen that the committee which is similar to the Bankers Committee will help oversee the affairs of all insurance companies, stressing that it will also assist in driving the industry’s change agenda.
Highlighting on the differences between the committee and the Insurance Industry Consultative Committee (IICC), he said the committee is made up of only underwriters, as against the IICC which encompasses all operators in the insurance industry.
He also maintained that the committee will be driven by NAICOM as against IICC that is under the ambit of the Chartered Insurance Institute of Nigerian (CIIN).
“The Insurers Committee is similar to the Bankers Committee and offers opportunity to industry players to engage in meaningful discussions on the issues and challenges of the sector while proffering solutions. Post inauguration, the Committee is expected to meet once every month,” he said.
The quest to transform the industry began at the tail end of the last administration, which initiated the transformation agenda which has now be christened changed agenda.
The initiative was designed to change the perceived low impact of the industry to the economy. It was considered abnormal for a nation with a population of 168 million to have only about five to 10 per cent of those who should be insured 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.
Although, the insurance sector has a lot to contribute in terms of productivity and value addition, the former Minister of Finance, Dr. Ngozi Okonjo Iweala said its contribution in Nigeria has been dismal, pointing out that it has the potentials of attracting as much as N5 trillion and creating more than 300,000 direct jobs in less than 10 years from the current poor financial base of N300 billion and 30,000 jobs in the sector.
Unfolding the vision for the sector, last year, Iweala said: “Let me lay out the vision for this industry and I will challenge the breakout groups to take this vision and start thinking about the operational details. The first part of our vision would be to grow our gross written premiums (GWP) of N300 billion today, to N1 trillion in the next three years, and to N5 trillion within the next decade. So we should be attaining gross premiums of about $30 billion in a decade from today. Let us focus on that prize ahead and work towards that goal.”
She explained that, “the second part of the vision would be to deliver jobs in this industry. The insurance sector is a powerful engine for job creation in our economy. But today, there are only about 30,000 people working in the Nigerian insurance industry. So the second objective of our vision would be to grow the number of direct jobs created in this industry 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.
She stated that part of the vision would be to widen access by growing the number of insurance policyholders in the country. “We are a country of 170 million people, but with only 3 million policyholders. Knowledge, awareness and patronage of insurance products are low across the country. So let us also work to achieve a minimum of 10 million policyholders in the next three years, and 30 million policyholders in the next decade.
“And to achieve this goal,” she continued, “the industry will need to think about new distribution channels for selling insurance policies, such as, using mobile platforms, and also working with the CBN to identify appropriate bancassurance regulations. We will also need to think about how to extend micro-insurance and takaful insurance (Islamic-compliant insurance) to rural parts of the country, especially to Nigerian farmers who are exposed to various climate risks.”
Iweala stated further that, “unleashing the latent energies of the insurance industry to create more jobs and boost economic development is one of our strategic responses to close the gap created by the economic challenges we are confronting at the moment.”