NAICOM creates multi-billion naira businesses for insurers in real estate, hospitality sectors

Cross section of the committee members at the event.

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Chuks Udo Okonta

The National Insurance Commission (NAICOM) has opened up a multi-billion naira underwriting businesses for insurance practitioners in real estate, hospitality and tourism sectors.

The business opportunities were created during the recently held 2023 National Insurance Conference with the theme: ‘Redefining Safety; Insurance Solutions for Public Buildings and Buildings under Construction” in Abuja.

The National President Real Estate Development Association of Nigeria (REDAN) Dr. Aliyu Wamakko, who was a panelist at the event, said there are haven of business opportunities for insurance players in the real estate, whilst calling on them to explore the opportunities, which he also said would help protect investments made by developers.

He noted that the sector requires adequate insurance protection to thrive, stressing that there are a lot of risks in the sector that insurance could help to mitigate.

He appreciated NAICOM for reaching out to REDAN at this time when developers need insurance protection to remain in business.

He pledged to ensure all his members abide by the insurance law regarding existing buildings and buildings under construction.

National Chairman, Nigeria Hotels Association (NHA) Dr. Patrick Anyanwu, who was also a panelist, expressed delight over the new relationship between his association and NAICOM, stating that members of his association barely have knowledge about insurance.

He submitted that with insights on insurance, he received from the conference, he has been equipped with knowledge to educate his members on the need to insure their hotels.

According to him, his members do complain of other things, but none has raised concern about insurance, which is an indication that most of them do not have insurance.

He implored the insurance industry regulator and practitioners to do more in educating members of the public on the benefits of insurance, adding that the education campaign should be done in the language the people understand.

To enable insurance practitioners harness the opportunities, NAICOM has adopted Public-Private Partnerships (PPP) strategy to enforce insurances of public buildings and buildings under Construction.

The Commission has also inaugurated a 10-member committee which include, members of staff of NAICOM; insurers; brokers; Nigerian Institution of Estate Surveyors and Valuers; hoteliers; Federal Fire Service; Real Estate Development Association of Nigeria and Insurtech operators.

The Commissioner for Insurance Sunday Thomas at the inauguration ceremony, expressed optimism about the transformative impact this move would have on the insurance industry and the safety of public buildings.

According to him, the insurance industry would never remain the same and the safety of public buildings would be redefined.

He submitted that the committee’s responsibilities would encompass data collection, continuous monitoring, comprehensive reporting and the organisation of regular meetings to assess the state of insurance coverage within the sector.

The committee, he said would play a pivotal role in bolstering building safety and minimizing risks associated with construction and occupancy, adding that one of the primary objectives of the initiative is to effectively mitigate the unfortunate instances of building collapses that have plagued Nigeria in recent years.

He posited that such incidents have not only resulted in loss of life but also in significant property damage, stressing that these incidents have raised concerns about the need for improved safety measures and better insurance coverage within the construction and real estate sector.

Thomas submitted that by overseeing this critical area, the committee aims to address these concerns and bring about a positive change.

“Building collapses in Nigeria have been a longstanding issue that has affected both urban and rural areas, leading to tragic consequences for individuals and communities.

“These incidents have been attributed to various factors, including poor construction practices, inadequate building inspections, and a lack of comprehensive insurance coverage.

“The committee’s activities will provide a solution to these issues by promoting the adoption of rigorous building standards, continuous monitoring, and an improved insurance framework for builders and property owners.

“It will focus on developing an integrated approach to enhance building safety and ensure that insurance coverage aligns with the dynamic needs of the construction industry,” he said.

The NAICOM boss noted that the committee is committed to transparency, accountability and regular reporting to NAICOM, thereby creating a mechanism for identifying and addressing challenges that may arise in the course of its activities.

He maintained that any issues or obstacles encountered will be escalated to the government for prompt resolution, further strengthening the partnership between regulatory bodies and the construction industry.

The launch of the committee, he said represents a positive step toward building safety in Nigeria, as it seeks to safeguard lives, property and investments by promoting responsible construction practices and comprehensive insurance coverage.

By addressing the recurring issue of building collapses, this initiative has the potential to significantly enhance public safety, instill confidence in the construction sector, and promote a more robust insurance industry, he posited.

He said it is a clear demonstration of the commitment of NAICOM and the entire insurance sector to improving building safety standards and protecting the interests of the Nigerian people.

President Nigerian Council of Registered Insurance Brokers (NCRIB) Tunde Oguntade, who spoke with Inspenonline on the sideline of the event, said the conference and inauguration was apt given the interventions taken by NAICOM to visit all the states and governors.

He posited that the industry really need all those interventions, before a conference such as that has to come up.

“In this conference, all the stakeholders under one roof have come to realized that there is need for collaboration, which is a major take home from the conference. Another major high point is the inauguration of the stakeholders committee which would drive the collaboration.

“I see a situation where there would be improved awareness and increase on insurance contributions to Gross Domestic Products (GDP).

“Imagine if we are able to increase the contributions of insurance to the GDP to five per cent as a result of this conference, it would create jobs, capacity, enablement for the underwriters. In fact, the possibilities are endless,” he submitted.

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