NAICOM lists initiatives to deepen insurance penetration in Nigeria
By Grace Airhule
Nigeria’s insurance industry regulator, the National Insurance Commission (NAICOM), has embarked on a number of initiatives with a view to stimulating growth in the industry, according to Sabiu Abubakar, NAICOM’s deputy commissioner for Insurance Technical.
Abubakar stated this at the second edition of the Chartered Insurance Institute of Nigeria’s 2022 Business Outlook held in Lagos.
He listed some of the initiatives to include market development and restructuring initiative (MDRI)/compulsory insurance, collaboration with state governments, compulsory insurance task force, financial inclusion and micro insurance.
Others are Takaful Insurance, bancassurance, insurance of government asset guidelines, regulatory innovations, web aggregator guideline, sandbox guideline and local content regulation.
Abubakar disclosed this against the backdrop of the 6.2 percent year-on-year growth rate recorded by the insurance sector at the end of March 2022 in spite of macroeconomic challenges facing businesses in Nigeria. He said the market size of the sector also grew at 15 percent in the same period, thus standing out as one of the fastest sectoral assets expansion in Nigeria during the period. The insurance industry also held a commendable market average retention of 73.3 percent in the first quarter of 2022, he said.
Abubakar said despite this impressive growth, Nigeria has the lowest insurance penetration in Africa, at 0.5 percent computed as Gross Premium Income as a percentage of Gross Domestic Product.
The NAICOM deputy commissioner said the Commission has strengthened its regulatory oversight and implored operators to settle genuine claims within a reasonable time to ensure perfect achievement of their obligations.
He said insurance regulation and supervision are the bedrock of national economic development, stressing that he believed NAICOM’s reforms and regulatory initiatives would positively impact the insurance industry if achieved and that the industry would witness tremendous development and growth.
Furthermore,he implored insurance practitioners to remain compliant and support the commission’s efforts in developing the sector.
Abubakar said NAICOM was getting ready for the full implementation of Risk-based Capital (RBC) in 2023 or 2024, adding that the Commission had penciled down another eight companies for commencement of the RBS examination this month.
He said the Commission had started training its staff on Risk-Based Capital (RBC) in collaboration with FSD, Africa.
He said while hoping for the full implementation of Risk Based Supervision, insurance operators were expected to carry out capacity building of their workforce on RBC as the involvement of the operators on the RBC framework was very demanding in terms of human technical capacity and other resources.