The National Insurance Commission, NAICOM, has challenged insurance industry operators to be innovative and think ahead in order to survive challenges that arises with unforeseen economic disruptions.
Commissioner of Insurance, Mr. Sunday Thomas, who spoke on sustainability initiatives charged practitioners to embrace disruptive business models in order to be able to build an industry that would withstand future changes in the sector.
Thomas, spoke at the Lagos Chamber of Commerce and Industry’s (LCCI) 2021 Insurance Stakeholders’ Consultative Forum with the theme “Nigeria’s Insurance Industry: Breaking New Frontiers,” hosted virtually in Lagos.
Insurance operators should avoid too much reactive thinking and embrace disruptive innovation since the things the industry has been leaning on might not sustain it in the nearest future, the Commissioner advised.
According to Thomas: “We are living in an age of disruption. The insurance sector is facing significant waves of disruption and important decisions about market positioning, ecosystem relationship, technology, investments in skills requirements need to be taken,” adding that, “key drivers of change include the changing nature of risks which are now too complex to fit into the insurance industry’s traditional lines of business structure.
“The time for talent development for disruptive innovation is now for a new market and value network. It, therefore, means that to break new frontiers is to at least be an inch ahead of unavoidable disruptions of our business models, markets etc. So, it is not just innovating but rather disruptive innovation.”
He said the quest for talent development and disruptive innovation would enable the industry to move from the status quo, adding that, “one assurance I can give is that the NAICOM will never go against any great idea that will create desired results. Let all of us come together and look for ways we can create a future for our industry.
“We want innovations that are disruptive to create the needed market. Therefore, we must have a mindset that is disruptive.”
He said it was expected that companies should ensure capital management in ways that would create value in the face of the new market frontiers, while,”its primary objective must be to optimise capital structure, performance and adequate risk undertaken.”
Thomas, noted that the prevailing low insurance penetration in the country, “is a sign that there are more grounds to be tilled and more harvests to be made.”
He said there was a need for regulatory reforms that would reposition NAICOM for both today and the future by breaking existing barriers in the insurance sector because, “we (NAICOM) are concerned about our service delivery and it is important for us to focus on it.”
He also added that the new insurance bill, which is before the National Assembly, would introduce improvements in the legal regulatory framework of the Nigerian insurance industry.
The President of the LCCI, Mrs. Toki Mabogunje, in her opening remarks said the essence of the forum was to facilitate exchange of ideas that would move the insurance sector forward and enable it to play its sustainable role in the Nigerian economy.