The National Insurance Commission (NAICOM) has confirmed that the reforms in the industry in the last five years has witnessed tremendous changes that will raise the standard of practice and boost consumers confidence in the industry.
The Commissioner for Insurance, Mohammed Kari, speaking to journalist in Lagos recently said that the regulator has been able to restore some measure of consumer confidence in the industry through recent policy initiatives including an outright directive to operators to settle all legitimate claims.
He said the industry has witnessed significant progress in operational performances and service delivery in recent past following measures put in place by the commission for operators to manage the business according to international standards, laws and guidelines in the industry. He explained that some of the negative publicity about the industry was largely based on wrong perception.
According to the NAICOM boss, “the formation of the insurers’ committee was necessary given the fact that the Nigerian insurance market in recent past had undergone substantial structural and regulatory reforms following the market intervention and the evolution of the financial sector in the last decade in order to initiate policies and facilitate implementation to drive the growth of the sector”.
He said that the committee comprising six sub-committees is expected to meet regularly to discuss developments in the industry.
However, according to the Nigerian Insurers Association (NIA) yearly report 2014/2015, confirmed progress made in the industry. In 2014, the estimated value of business underwritten by the insurance industry was N319 billion as against N285 billion posted in 2013; this represents an increase of about 12 per cent.
The industry claims payments in 2012 was N72.208 billion, it increased to N92.951 billion in 2013.
The report said “it should be noted that this did not come easy as the Nigerian insurance landscape was plagued by several challenges. As we know, the insurance sector cannot be separated from the vagaries and vicissitudes of the national economy”.
“Therefore, the challenge of poor power supply, weak infrastructure and the continuing insurgency in the North East contributed to slow down the pace of growth of the industry. The introduction of innovative products strategic business models and improved service delivery however helped to up the ante for the industry.”
According to the report, “The enforcement of ‘No premium No Cover’, implementation of IFRS, strict adherence to anti-money laundering guidelines, better corporate governance structures and tighter supervisory oversight and the shift to development oriented regulation by the National Insurance Commission contributed significantly to the improvement in quantum of premium that are reporting today”.
From the yearly report of operators, for instance, the interim chairman of Leadway Assurance Company Limited, Jeremy Rowse, in the company’s 2015 yearly report said “The efforts of the National Insurance Commission at reforming the insurance industry yielded remarkable returns in the year 2015 with the final release of the Prudential Guidelines and market conduct guidelines for insurance institutions in Nigeria at the twilight of the administration of the immediate past commissioner of insurance.
There was a change of guard at the commission with the appointment of Alhaji Mohammed Kari following the expiration of the tenure of Fola Daniel as commissioner of insurance.
His appointment was followed with the inauguration of the insurers’ committee similar to the Bankers’ committee, which comprises all the chief executive officers of insurance companies in Nigeria and creates a platform to engage the commission on the issues and challenges of the sector and proffer solutions to foster insurance penetration.
“With the new leadership and the release of various guidelines aimed at reinforcing standards and encouraging growing presence of foreign interest the Nigeria’s insurance industry is taking a leap for future growth within the operating environment and creating an opportunity to effectively compete amongst the global insurance industries.”