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Over the years, NAICOM has actively undertaken measures to advance the insurance industry in alignment with its regulatory responsibilities. A primary objective of these efforts is to boost insurance penetration, a goal that remains challenging, with current levels hovering at less than two percent. Despite concerted endeavors to reverse this trend, achieving sustainable growth in the sector has proven elusive.
The recent National Insurance Conference held in Abuja witnessed a significant revelation. Mr. Olorundare Sunday Thomas, the Commissioner for Insurance and CEO of NAICOM, hinted at a 10-year transformation roadmap for the insurance industry. This strategic endeavor, spanning from 2024 to 2033, is constructed upon seven key pillars:
1. Regulatory Transformation
2. Risk-Based Capital Models
3. Insurance Promotion and Adoption
4. Product Diversification
5. Distribution Channel Optimization
6. Digitalization
7. Talent Development and Support for Nigeria’s Economic Transformation
The choice of this occasion for the unveiling was fitting, given the conference’s theme, “Redefining Safety – Insurance Solutions for Public Buildings and Buildings under Construction.” Thomas emphasized that these strategic objectives would guide NAICOM’s transformation initiatives over the next decade. He also announced the impending launch of the ‘Guidance Note for Insurances of Government Assets and Liabilities.’
One of NAICOM’s strategic initiatives is the National Insurance Conference, designed to incentivize law enforcement agencies, state governments, relevant professional bodies, and stakeholders. This conference plays a vital role in raising awareness of the importance of insurance in redefining safety in Nigeria.
Furthermore, President Bola Tinubu is expected to launch the insurance sector’s 10-year strategic roadmap and the Guidance Note for the Insurances of Government Assets and Liabilities. This event brings together stakeholders to discuss current and emerging issues, generating actionable strategies for the effective enforcement of compulsory insurances and improvements in national safety standards.
Under Mr. Thomas’s leadership, NAICOM remains resilient and dedicated to implementing projects that enhance the Nigerian insurance industry’s development. These projects, part of the medium-term NAICOM Strategic Plan 2021-2023, include:
– Enhancing safety and soundness in the Nigerian insurance sector through improved prudential regulatory tools and corporate governance practices.
– Migration of the supervisory regime to align with global best practices, improving distress management and market restructuring.
– Implementation of project e-regulation through the Business Process Management Solution and the NAICOM portal, streamlining insurance applications and policy identification.
– Actuarial capacity development to produce more Actuarial professionals for the industry.
Furthermore, the commission has made significant strides by licensing 12 new entrants and expanding insurance distribution channels, increasing the availability of insurance products and local capacity in Nigeria.
As part of its support for government initiatives, NAICOM mobilized the insurance industry to contribute N500 million and provide free life insurance cover for front-line workers during the COVID-19 pandemic. The commission continues to engage with state governments and security agencies to enforce compulsory insurance.
Additionally, NAICOM has provided financial assistance to tertiary institutions in Nigeria to facilitate the education of professionals needed by the insurance sector.
Despite these advancements, the roadmap acknowledges challenges that hinder the desired growth of the insurance industry. These challenges include the talent gap, low public awareness, insurance affordability, trust and confidence issues in insurers, cultural and religious biases, inadequate distribution channels, and low enforcement of insurance.
In terms of performance, between 2014 and 2022, the industry’s premium income grew at an average of 13.6 percent, and total assets increased by an average of 12 percent.
The insurance industry’s journey along the seven strategic thrusts seeks to transform the regulatory environment, transition to a risk-based capital model, promote insurance awareness and adoption, expand product offerings, enhance distribution channels, foster digitalization, and support Nigeria’s economic transformation.
In conclusion, the National Insurance Conference serves as a critical platform for raising public awareness of compulsory insurance. It strengthens collaboration with government and non-government agencies, paving the way for effective enforcement of all classes of compulsory insurance nationwide. Analysts believe that discussions at the conference will lead to the formulation of policies beneficial to the insurance industry and the Nigerian economy as a whole.
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