Kindly leave a comment and share
Chuks Udo Okonta
The National Insurance Commission (NAICOM) has said inflation has been a major concern for the insurance sector, as rising prices affect both insurers and policyholders.
The Commissioner for Insurance/Chief Executive Officer NAICOM Olusegun Omosehin, said this today in a keynote address presented at the Insurance Meets Tech (IMT) 2024 in Lagos.
Speaking on the theme, ‘Revitalising the Insurance Industry to Risk-Manage Nigeria’s One-Trillion-Dollar Economic Aspiration’, he said for insurance companies, inflation makes it difficult to operate profitably, especially if claims costs increase due to inflation.
He maintained that to mitigate the challenge s posed by inflation, insurers must carefully manage their investment portfolios, adapt pricing strategies and maintain adequate reserves.
Omosehin, who was represented by the Head, Lagos Control Office NAICOM Julius Odidi, noted that it is pertinent to reiterate that the Commission plays a vital role in fostering innovative business solutions that address pressing economic and social issues in Nigeria’s insurance sector, adding that this commitment extends to ensuring prompt
settlement of legitimate claims, promoting market growth through innovation, and driving commercial value within the industry.
The regulator submitted that in achieving the objective of revitalising the insurance industry, stakeholders must of necessity address the following fundamental issues plaguing the sector, which include among others; low insurance penetration: lack of public trust; market fragmentation; regulatory reforms and digital transformation and adaptation.
“While the surge of COVID-19 raged in year 2020-2021 threatening global
safety and testing the abilities, resilience and preparedness of nations globally to deal with the unexpected outbreak, the pandemic highlighted the need for digitalisation.
“In the insurance sector for instance, while lockdowns negatively impacted traditional distribution channels, they also encouraged insurers to develop digital offerings. This has come to show that investing in technology, online platforms, and mobile apps can improve customer experience and accessibility,” he posited.
He maintained that essentially, revitalising the Nigerian insurance industry to risk-manage Nigeria’s One
trillion Dollar economy literally speaks to the insurance industry’s readiness and preparedness to de-risk the activities that is projected to galvanize productivity, innovations, economic growth and development. “With the rapid changes in technology and economic/business environment, this discuss is not just timely but also topical to reawaken the need for our dear industry to rise up to the current realities of what is expected of us as an industry,” he stated.
The Commissioner submitted that the insurance sector must embrace innovation to meet up with the rapid market
changes, changes in consumers’ preferences, tastes and lifestyle. “We must develop products that meets the demands of our market as innovation have taken the driving force in the financial services sector,” he added.
He said more critical to the theme is the issue of financial soundness and stability of insurance institutions, as a strong financial base is key to our success as an industry.
Having sufficient capital that is commensurate to the Risk of an insurer has become inevitable if the industry is to meet up with up with the consequential effect of a growing economy, managing a one trillion economy and compete with our counterparts across the globe in management of risks, he said.
