The Insurance industry during President Muhammadu Buhari’s first 100 days in office exhibited a high level of market discipline. This may be an indication that better days are here.
The insurance industry is one of the sectors of the economy that has placed high hopes on the present administration led by Muhammadu Buhari as the regime that will bring a major turnaround to its fortunes, especially in its long walk of transition to a trillion Naira market from present level of N300 billion premium.
Indeed industry operators are optimistic that many things left undone by past administrations in the effort to reposition the insurance industry as alternative contributor to the nation’s economic growth in the presence of continued decline in the price of oil would be accomplished by the Buhari’s administration.
As Buhari clocks 100 days in office, industry operators and stake holders have paused to count their gains from the administration.
They noted that the present administration has accorded high recognition to the industry in that it has shown interest in driving insurance to the fore front of the financial services sector in Nigeria.
Within the period, the immediate past commissioner for insurance Mr. Fola Daniel noted that the Buhari’s administration is very sensitive to the fact that insurance is key to building a virile economy and has therefore called for the contributions of the industry to the new transition committee set up by the administration.
Describing this as first in history for the industry from the federal government, Daniel said the future holds a lot for the insurance industry under Buhari’s administration.
Generally, the industry has during the Buhari’s first 100 days in office shown signs of high level of market discipline, which industry stake holders have been yearning for among operators in their business conduct.
For instance, within this period, about three companies have been sanctioned; boards of directors have been replaced with interim managers while warning memos have been issued to some firms.
Within this period, the industry regulator, the National Insurance Commission (NAICOM) has vowed to implement to the last, recommendations and guidelines stipulated by the world bank on supervision of insurance institutions.
The commission, which early this year sent signal to the industry operators on its plans to implement
the Risk Based Supervision model had within this 100 days of Buhari’s administration informed the operators that in exercise of the powers conferred on it by section 49 of the insurance act of 1997, it has released what it termed Market Conduct and Business Practice Guidelines for all insurance Institutions in Nigeria.
The commission also released another document tagged: ‘Prudential Guidelines for Insurers and Reinsurers in Nigeria.’
Brandishing to the insurers the 78 page market conduct and Business guidelines for insurers recently in Abuja, Deputy Commissioner for Insurance, Finance and Admin Mr. George Onakhene said the document contains frame work for fair policies and procedures, effective claims management, trade practices and fair treatment of customers.
According to him, it also contains operations, pricing , commissions and associated returns as well as foreign facultative reinsurance placements for reinsurance brokers.
The 62 page prudential guidelines for insurers and reinsurers the deputy commissioner said sets out the minimum prudential standards for underwriting reinsurance, investments, reserving , outsourcing among other activities required from insurance institutions with a frame work for the establishment of policies and procedures for internal controls.
Onakhene urged the insurers to endeavor to put their house in order to survive in the face of the guidelines.
Also within the period, there have been signs of implementation of professionalism and values among operators by the regulator.
There have been crusades on this by the past administrations in the commission, but this time there appear to be pronounced zeal for practical implementation of professionalism and sound ethical conduct by the regulator.
Recently, the new commissioner for insurance Alhaji Mohammed Kari has called for what he described as professional re-awakening and embracing of professionalism and core values among insurance industry practitioners in order to correct wrong perception on insurance by Nigerians.
Kari who made the call the investiture of Mrs. Isioma Chukwuma, the new president of Chartered Insurance Institute of Nigeria (CIIN) in Lagos said the re-awakening effort among insurers has become necessary to ensure that only trained personnel are allowed to practice insurance in Nigeria.
“You will agree with me that insurance services are being rendered by persons and bodies without adequate training, we must embrace professionalism as core value in our industry insisting that to achieve this, the industry must train all persons that carry its flag to consumers.
“Insurance practitioners and professionals should be seen to uphold the tenets of the profession both in their words and actions. It is not enough for the Institute to breed and certify insurance professionals only, but must also ensure that they are regularly updated through training and refraining to enable them measure up with current global trends,” he insisted.
But in spite of these, the operators said there are a lot of expectations yet to be realised from the administration.
According to the operators, they are yet to realise their dream of having all airline operators insure every aircraft that flies in Nigeria , although recently in a chat with THISDAY in his office, the
Public Relations Manager of the Nigerian Civilian Aviation Authority (NCAA) Mr. Fan Ndubuoke had said that all Aircrafts that fly in Nigeria have insurance cover, the insurers observed that some airline operators hardly buy insurance for their aircrafts and some where they buy, prefer to patronise foreign insurers rather than indigenous insurers there by going against the local content law of the federal government.
Against this backdrop, the operators have appealed to the Buhari’s administration to cover up the gap.
Making the appeal, the president Nigerian Council of Registered Insurance brokers Mr. Ayodapo Shoderu urged the administration to ensure that henceforth, no airline operates without adequate insurance cover especially from a registered indigenous insurer.
“They should also ensure that no airline operator is allowed to operate without adequate insurance cover. Adequate insurance will guarantee that in case of any unfortunate incident, the bereaved families will have something to fall back on. On our part as insurance brokers, we have taken our awareness campaign to the Airline Operators of Nigeria (AON). We have had meeting with the representative of the Association and a further meeting is to be rescheduled for a later date, not only with AON, but also other professional bodies in the aviation industry, to ensure that the mechanism of risk taking provided by law is strictly adhered, to avoid double tragedy for the families of victims,” Shoderu stated.
He however called on government to also throw its federal might behind the entrenchment of insurance policies not only in aviation industry but all other sectors especially in the area of enforcing compulsory insurances.
“There are almost six compulsory insurance policies that have been highlighted by our regulator; we need government support and backing to enforce them. It is of common knowledge that incumbent
administration will not tolerate corruption of any sort, I like to say that avoidance of compulsory insurances is high level of corruption, therefore, it must be included in the ongoing fight against corruption,” Shoderu said.
It is on record that, five years after the launch of the various compulsory insurances in the country, enforcement has remained a major problem. Against this backdrop the operators had hoped that the present administration would see to enforcement of the compulsory insurances but this has not come to be as the compulsory insurances are still not enforced.
The operators said they are yet to see change in government recognition of insurance especially with regard to insurance of its properties.
Over the years, the insurers had accused government of paying lip service to the industry grumbling that insurance is the only sector that government hardly patronises.
Managing Director Nem Insurance plc, Mr. Tope Smart speaking in this regard lamented that up to the present time government does not believe in insurance and does not contribute to its development. He said as a result, the Nigerian insurance industry has continued to suffer stunted growth. He also pointed out non enforcement of compulsory insurances as opportunity which government denied the industry.
“If you look at what obtains in other parts of the world where there are compulsory insurances and government creates an enabling environment where it ensures that people comply, they enforce the laws. In Nigeria, enforcement is the problem and without enforcement, premiums are lost to fake insurance. Don’t be surprised that a lot of people still carry fake insurance certificate of non-existing companies like Lion of Africa, victory, ACEN, vigilant insurance, etc. and it is because there is no enforcement and nobody bothers to look at that area.
So you will discover that a lot of money is being lost and until government comes in to actually enforce these laws, we will continue to lose money. For instance, look at the area of group life, government has tried to an extent by saying that you must have your group life certificate to do a lot of things as a company. They are enforcing it through PenCom. If government can do this in the area of motor insurance, building under erection and other products, it is going to bring a lot of income for the industry and the Nigerian economy”, he stated.
In overall, the insurance industry operators said what they have experienced within this short period of 100 days are signs of good days ahead for the industry. They have expressed hope that the future will be better for the industry.