From left: Chairman, Nigerian Insurers Assocition and Deputy President, Chartered Insurance Institute of Nigeria, Eddie Efekoha; Commissioner for Insurance Mohammed Kari and Governor of Ogun State, Ibikunle Amosu at the event.
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Chuks Udo Okonta
The National Insurance Commission (NAICOM) would soon begin the experimentation of the industry’s planned Risk-Based Supervision (RBS) with 10 selected insurance companies, its Deputy Commissioner Technical, Sunday Thomas, has said.
He disclosed this yesterday at the on going Chartered Insurance Institute of Nigeria (CIIN) 2017 Professional Forum in Abeokuta, Ogun State, stressing that the companies will be used to test run the initiative before its full implementation.
It was learnt that the commission will soon inform the firms that will be involved in the exercise and that its executives would be deployed to the firms to assist them in the implementation of the initiative.
The Commissioner for Insurance, Mohammed Kari, said in line with the RBS initiative, insurance institutions must therefore, review and where necessary, enhance their capital, risk management and governance in order to survive the interesting future ahead,adding that barring hindrances such as high costs of implementation, paucity of requisite data and skills and political obstacles; and that it was posited that a intelligence implementation of a strategic consolidation in Nigeria will boost the overall performance of the industry and position it as one of the foremost in the continent.
“As a result of increased risk coverage, there will also likely be an increase in the minimum capital requirements and potential reduction in qualifying capital of insurance companies. We expect this to lead to further consolidations and stability in the industry which will subsequently create an influx of foreign investment.
After such an exercise, we would have no reason to continue with the suspension of issuance of new operating licenses. For the period since that policy was introduced, there had been no local merger or acquisition and I believe once more the market had lost an excellent opportunity to strengthen itself from within. It is no surprise that big international players are taking position in our market, they obviously see something you don’t. In the field of fairplay there is hardly more than a couple of companies that can complete with them,” he said.
He noted that the insurance market by all standard deserves to be reckon in the International playground of insurance, but wonder how that can be achieved when operators operate in uncoordinated silos. “We have to wake up, sort ourselves out and be ready to play our role at least in the sub-region. For operators that are members of the West African Insurance Companies Association, (WAICA) it is common knowledge that the integration of members countries into a single market is on the front burner,” he said.
