* Targets N1 trillion premium by 2024
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Chuks Udo Okonta
The National Insurance Commission (NAICOM) seems to be looking towards year 2024 for the implementation of risk-based recapitalisation that will enable each insurance company underwrites risks based on their capital.
The Commissioner for Insurance, Sunday Thomas, in an interview with journalists recently in Abuja, said NAICOM would this year, be closing on the implementation, adding that before he finishes the first tenure, which will end in 2024, as he was appointed Commissioner in 2020, the initiative would be operational.
Thomas stated that NAICOM started the pilot scheme on risk-based capital last year, stressing that some companies have tasted what it means to have risk-based supervision environment.
“It has been quite revealing about the operations of these institutions. We are taking it to a new level, risk-based capital. If you know the history of capital in this country, it has been an issue and we want to remove that. You can trade, for instance, as a motor third party insurance company, based on your capital.
“Then, if you want to trade in the highly volatile business environment of oil and gas, you also must provide the needed capital to be able to run at that level. That is where we are going now. The one cap fits all, will no longer be the case.
“This year, we will be closing on that and before I finish the first tenure, it will be operational. We are in partnership with the multilateral institutions in our quest to evolve, this risk-based capital. Our staff members have gone through a lot of training in this area and it’s been quite helpful,” he posited.
The NAICOM helmsman, who is optimistic of great strides in the insurance industry, said insurance business has continued to thrive since his appointment, stressing that as at that time, he was appointed a deputy commissioner by President Muhammadu Buhari, the market production was about N320 billion, adding that he was deputy commissioner until around August 2019.
He said when he was appointed Acting Commissioner, the market production in terms of premium was about N400 billion to N520 billion. But by 2022, the market recorded more than N730 billion.
Thomas said he is still not satisfied yet, because his target before he finishes his first term in office is N1 trillion. “The total asset moved from about N1.3 trillion in 2018 to about N2.5 trillion in 2022. We are making progress but looking at our economy, these, to me, are small numbers. I will also say that our methodology is also changing. Inspection used to be compliance-based with a checklist. But now, the world has moved to risk-based supervision,” he said.
