Subsidy removal could relegate insurance demand, NAICOM warns

From left. Representative of the Commissioner for Insurance, Mr. Ajibola Bankola; Guest Speaker, Chief Executive Business School Netherland, Lagos, Prof. Lere Baale; Deputy President, Mr. Tunde Oguntade; Vice President, Mrs. Ekeoma Ezeibe and Executive Secretary, Mr. Tope Adaramola at the 2023 CEOs’ Retreat of the Nigerian Council of Registered Insurance Brokers held in Ogere.

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Chuks Udo Okonta

The National Insurance Commission (NAICOM) has said the recent subsidy removal by the federal government exacerbates the need to project the value proposition of insurance beyond the conventional perception, as there will be a “complex rationing” which could further relegate insurance demand.

The Commissioner for Insurance Sunday Thomas, said this in his keynote address presented at the Nigerian Council of Registered Insurance Brokers (NCRIB) 2023 Chief Executive Officers Retreat held yesterday at TCC Ogere, Ogun State.

He noted that brokers must upscale their business models to attract individuals who are leaning towards creating sinking funds, adding that economic activities may reduce in the short run, so brokers must optimize their management expenses in order to avoid the pressure of an off-peak period, while not forgetting to prepare for the possibility of cost-push inflation.

noted that he always look forward to the forum which affords him the opportunity to interact with members of the Nigerian Council of Registered Insurance Brokers, stating that the theme for this year’s retreat “Planning” is precise and will encapsulate all efforts towards instituting a solid foundation for growth and development of insurance industry.

“I want to appreciate the cooperation and support of the NCRIB to the Commission’s effort towards ensuring professional and ethical standards amongst its members as well as the continued support and representation of the NCRIB in various Industry Committees instituted by the Commission, such as the AfCFTA Committee, Committee on the Insurance Bill, amongst others. I must emphasize that irrespective of the differences in approach or methodology, we are all committed to deepening insurance penetration and growth of the Nigerian insurance industry.

“It has therefore become imperative that we all work towards aligning our collective vision and goals for the industry in order to present a formidable front. We must break from an industry that is perceived as one that is always at logger-heads on matters that ordinarily are for the progress of the industry. This cannot be achieved without being true to ourselves as professionals in this time honoured industry.

“Let me emphasize here that for this industry to remain sustainable, we must accept changes that come with modernization and technological advancement. This is why we must realize that distribution channels for insurance products must be expanded beyond the traditional norms. Every arm of the sector must hugely invest in technology in order to compete or be able to meet the expectation of clients,” he said.

Thomas said it has thus become imperative to support the Commission’s efforts to bring emergent online platforms for distribution or provision of insurance under the Commission’s regulatory purview in the interest of the Nigerian insurance industry.

He submitted that an important issue is the need for operational standards to prevent or reduce, to the barest minimum, unethical practices which ridicule or impugn the integrity of the Nigerian insurance industry, adding that it is his humble view that strong and sound firms are better able to invest in the much needed information technology solutions to ease operational pain-points within the industry, hence the need to dissuade portfolio broking firms.

The insurance industry regulator noted that insurance brokers must begin to re-examine the insurance broking value proposition beyond the traditional perception, stressing that this is necessary to enable the insuring public/insureds appreciate other values offered, as the rhythm has changed and people may only use services that provide priority values to them.

“I must also emphasize that insurance brokers have very important roles to play in our collective aspiration to reposition the industry. This includes projecting the additional values created by the new regime of Third-Party Motor insurance cover, the NAICOM Portal, improved soundness and stability of insurers, better market conduct practices and fair treatment of insurance consumers, as well as ongoing collaboration with state governments on compulsory insurances, among others,” posited.

He maintained that
regulatory changes are continuous given the changing dynamics of the operational market environment, and that brokers must therefore avoid the obvious temptation to resist innovative regulatory and supervisory initiatives intended to make the industry more relevant to the economy.

He said brokers cannot continue to wait; but must confront their challenges before their challenges consume us.

He reiterated that collective planning is as necessary as individual planning; adding that if brokers do not collectively plan to succeed then they might fail collectively.

The NAICOM boss said the Commission remains committed to the development and growth of the Nigerian insurance industry and would continue to collaborate with all stakeholders in promoting and entrenching good business practices.

President of the NCRIB, Rotimi Edu, said the CEOs Retreat has remained a permanent feature of the Council’s yearly programmes bringing together top notch executives of each of the member companies for the purpose of learning, relaxation and networking.

Edu, who was presented at the event by the Deputy President, Tunde Oguntade, said
this is an auspicious occasion for him to once again express his delight that with members cooperation, the “Brokers-Centric” focus of the current leadership has been recording good success.

“We are all witnesses to the increasing tempo of members interest in activities of the Council, while the same interest is being stimulated amongst insurance companies who do everything possible to collaborate with our Council for their enhanced bottom-line and ultimate corporate progress,” he submitted.

He assured members that the council would continue to commit to these lofty ideals for all of them, with their sustained cooperation and support.

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