Yemisi Izuora
Godwin Wiggle has said that reforms by the National Insurance Commission (NAICOM) will certainly transform the sector and make its contribution to the Gross Domestic Product (GDP) significant.
Wiggle said that with GPW in 2013 at N314.95b ($1.93b) the figure is expected to reach N1 trillion ($6.13b) by 2019.
This represents a cumulative average growth rate of 21 percent over 6 years which is typical of a developing market where premium growth outpaces GDP growth and will also lead to a 0.9 penetration by 2019.
Wiggle who is the chief executive officer (CEO) of Linkage Assurance attributed some of the successes to regulatory policies of NAICOM who he said has made several reforms to reduce apathy in the Insurance Industry.
Speaking on one of the reforms, the Market Development and Restructuring initiative (MDRI), Wiggle stated that the initiative was launched in 2009 with the objectives of transforming the industry from N160 billion premium income to a trillion Naira industry.
According to him, This was to be done through the enforcement of five compulsory insurances stipulated by the insurance act of 2003 which are third party motor insurance; Statutory Group Life Insurance; Employee’s Compensation, Occupier’s Liability and health Care Professional Indemnity Insurance.
The project was launched in six geo-political zones of the country and enforcement commenced in March 2011.
He also mentioned that the MDRI has the objective of creating 50,000 jobs through the agency system, while also targeting to fight against fake insurance.
Wiggle unfortunately observed that the first phase of the MDRI which was from 2009-2012 did not achieve the trillion naira insurance market objective, as the industry’s premium has remained at N339 billion as at 2014, but noted that NAICOM hopes that the industry will reach the target by the conclusion of phase 2 in 2017.
On reform initiative of the regulator, the CEO said through the intervention of NAICOM, the industry has migrated from the Nigerian Accounting Standard Board System to International Finance Reporting Standard (IFRS).
The industry also launched Cooperate Governance Structure and the Anti-Money Laundry Structure in order to remain globally competitive and in 2010, the commission launched the guidelines on insurance of oil and gas business in Nigeria as a way of ensuring the local content policy of federal government is implemented in the insurance industry, he said.
He however, observed that lack of continuous insurance education, ignorance, low level of disposable income and even religion and some other factors have contributed to the apathy observed towards the insurance industry.
He also observed declining premium as a result of rate cutting, tough regulatory requirements, volatile business environment, liquidity freeze, mounting claims profile in the mist of declining premiums and poor perception of the industry, as some factors challenging the sector.
Wiggle however assured, “We will continue to strive to create awareness and improve Consumer Confidence in Insurance, and at the same time, bring the market closer through microinsurance products.
NAICOM is doing great in enforcement as can be seen from the many organizations that have been sanctioned for non-compliance. Today the regulators are more serious than ever”.