National Insurance Commission office
Nnamdi Duru with agency report
Insurance expert and consultant to the National Insurance Commission (NAICOM) on Market Development and Restructuring Initiatives (MDRI), Chief Yemi Soladoye, has flayed the inability of the 49 insurance companies in the country to cumulatively rake in N1 trillion premium income by the end of this year.
According to him, the realities of the delay in implementing the project and enforcing the compulsory insurances made it impossible for the operators to meet the targets set for them initially under the programme.
According to a report by InsPen Online, Soladoye said the failure by the operators to start implementing MDRI in 2009 impacted negatively on their ability to cross the N1 trillion premium targets this year.
He recalled that the N1 trillion projections, which he described as a turning point for the industry, was hinged on a four-year strategic plan, adding that there was no way the target would be achieved when full implementation of the project commenced last year.
“To assess a project effectively, you must look at where you are coming from. The initiative is a turning point because the operators, regulator, support service providers, journalists and government realise the fact that there is something going on in the industry.
"MDRI is also a turning point because it is from that stage we saw the regulator leading the market. There is a united focus for all of us. Whether you adopt it or not, we all know that there is a project on ground and there is a destination to reach and there is a direction as to the way we can go for us to secure increased penetration for insurance business in this country. Everywhere in the world, implementation has always been the challenge to achieving projects. MDRI is a case of delayed implementation,” Soladoye said.
According to him, stakeholders in the project and Nigerians generally never related the promises under MDRI to the date its enforcement started, saying this was why they still expected the operators to meet the N1 trillion target for this year.
“Most people are reading the strategy document and not relating it to when implementation took off. If there is a projection that in year four, we will get N1 trillion and as we could see from the paper, we were to start in 2009; we had what we are to achieve in 2009, 2010, 2011 and 2012.
“So, N1 trillion is in year four which is 2012. If implementation started in 2011, it will be a case of shifting the deliverables forward based on the difference on the ground between the strategy crafting and the implementation. The initiative is a watershed in the history of the industry and it is also an evergreen thing,” he said.
He noted that the initiative cannot be wished away, as it has brought about many developments, adding that efforts by NAICOM to reposition the industry through micro-insurance, takaful and more are strategic plans stated in the MDRI document.
MDRI is a project is a medium term plan spanning across 2009 and 2012 meant to grow the industry’s premium income to N1 trillion by the end of next year from N160 billion and create about 50,000 fresh jobs through the Agency Network System and increase in the industry’s contribution to the nation’s Gross Domestic Products (GDP).
It is also meant to increase insurance penetration in the country and seeks to enforce some of the insurances mandated by various laws in the country in the past.
Between 1987 and 2004, 16 insurance products were made compulsory by means of statutory provisions in the country, five of which are very prominent and capable of generating significant premium income for the industry.
Some of the insurances mandated by the various laws in Nigeria include third party motor vehicle insurance, insurance of public buildings and buildings under construction and group life assurance for the benefit of workers to be taken by their employers and professional indemnity cover for medical professionals among others.