The Commissioner for Insurance and Chief Executive of the National Insurance Commission, NAICOM, Mr. Mohammed Kari, has said that strengthening existing practices and creating room for better practices in the insurance industry can boost the economy.
Kari who spoke at the Insurers’ Committee first annual retreat in Abuja noted that a strong insurance industry could create a successful economy.
The Insurers Committee is made up of chief executives of insurance companies and NAICOM and is fashioned after the Bankers Committee.
Kari said, “It is long overdue that we make a change in the right direction. Successful economies are characterized by a strong investment culture of which the insurance industry plays a vital role. So we literally need to re-energize the insurance industry and commence playing our key role in boosting and growing our sector, and the Nigerian economy.”
Kari noted that repositioning of the industry can create positive changes adding that “once we can successfully navigate this corner, we could be on our way to entrenching a financially solid, vibrant, viable and active insurance sector that would bring about, not only an increase in penetration, but the industry’s contribution to GDP, accumulation of long-term funds for infrastructural financing, job creation, and an improved standard of living.”
He explained that the industry has witnessed series of changes owing to the new reforms embarked upon by NAICOM but must work on them for better result. He stated: “These reforms include financial reporting reforms, No Premium No Cover, Corporate Governance Code, Risk Based Supervision, Information and Communication Technology advancement, Financial Inclusion, Claims Settlement, Market Conduct, Expansion of Distribution Channels, etc all aimed at building confidence, trust and enhancing our market value.
“It is pertinent to note that these changes are imperatives and have arguably had a considerable impact on efficiency, market structure and performance in the insurance industry. Suffice it to say that these reforms will not stop but continue. We shall continue to introduce new reforms and initiatives in line with international best practices in our march towards achieving our full potentials.
“As we already know, insurance in Nigeria has under-performed the banking sector and even the recently established pensions sector. For us as the industry regulator and supervisor, we have chosen to elevate the regulatory ladder. We cannot therefore over emphasize the paramount importance for us to fashion a development plan for the repositioning of the sector.”
However, Kari urged the committee to pay attention to the things that can bring growth to the industry adding “We are glad that Takaful and Micro-insurance is now taking firm root in the industry. It is also noteworthy that insurance companies have started to make good attempts at shifting focus from corporate segment to retail segment of the market.
“Notwithstanding, this encouraging development in the retail end of the market, it is obvious that the industry needs to do much more in this area. We have also long identified the potentials inherent in embracing financial inclusion products in the growth of the industry. It is this realization that led the Commission into introducing financial inclusion products into the market a few years back.”