The National Insurance Commission is engaging other regulatory bodies on how to assist the insurance companies to meet up with its recapitalisation requirements.
The Acting Commissioner for Insurance, Mr Sunday Thomas, said this during a one-day conference on the theme, ‘Corporate governance, the panacea for sustainable growth and development of insurance in Nigeria,’ in Lagos.
The event was organised by NAICOM in collaboration with the College of Insurance and Financial Management – the training arm of the Chartered Insurance Institute of Nigeria.
Thomas said, “The recapitalisation exercise is on and the reports submitted by the companies on their recapitalisation plans have been good, I can only encourage sustained efforts at earlier completion of the plans.
“Meanwhile, the commission is engaging other relevant regulatory bodies and agencies of government for possible palliatives that will reduce the cost of recapitalisation and the response is looking good.”
The acting commissioner said that insurance in Nigeria with a contribution to the nation’s Gross Domestic Product at less than one per cent had underperformed its potential, especially when compared with other sectors in the financial services industry.
He said, “I believe that once we can successfully navigate this corner, we could be on our way to entrenching a financially solid, vibrant, viable and active insurance market that would bring about not only an increase in penetration but a substantial increase in the industry’s contribution to the GDP.
“This will also simulate accumulation of long-term funds for infrastructural financing, job creation, and an improved return on investment.”
The acting commissioner said successful economies were characterised by a strong investment culture of which the insurance industry played a vital role.
In the last few years, he added, the insurance industry had witnessed series of changes owing to reforms embarked upon by NAICOM.
He said these reforms included financial reporting, 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, and recapitalisation with all aimed at building confidence, trust and enhancing its market value and profitability.
Thomas assured that the commission would continue to introduce new reforms and initiatives in line with international best practices in its march towards achieving the full potential of the industry.
The President, CIIN, Eddie Efekoha, said the event was a continuing capacity building session for directors of insurance companies, who were a critical set of stakeholders in the insurance ecosystem.
He said, “Insurance business is unique in terms of its operations, products and business models. Similarly, members of the boards of insurance companies come from various backgrounds, sectors and professions and all have had to comprehend the uniqueness of insurance business.”
Efekoha said the event was apt, especially, when it was a time when various initiatives including but not limited to recapitalisation and market development were being put forward for the purpose of attaining sustainable growth and development in the insurance sector.