Experts who spoke at the 2017 National Insurance Conference, organised by the Insurance Industry Consultative Council, agreed that the surest way to fix Nigeria’s ailing economy was for government to collaborate with the private sector to enthrone an enabling environment for businesses to thrive. Ebere Nwoji who was in attendance reports
Insurance managers, in their strategic search for the way forward for Nigeria’s ailing economy, recently assembled a cream of experts from various sectors of the economy to brainstorm on how to make Nigeria a good investment destination for both domestic and foreign investors.
The forum was the 2017 National Insurance Conference, an annual public discourse organised by the Insurance Industry Consultative Council (IICC).
This year’s edition of the conference held at Transcorp Hilton Abuja, has the theme, ‘Nigeria Open For Business’.
The conference, the third in the series, witnessed a kind of paradigm shift from the usual focus on insurance matters to issues affecting the economy as a whole, especially on the need for collaboration between the various arms of government and private sector operators in providing an environment where business can thrive.
Since the inception of the conference three years ago, discussions have always centered on how to promote insurance awareness and make an average Nigerian see the need to patronise insurance.
But this year, perhaps, having realised that insurance can only thrive in a healthy economy, the insurance managers, resolved to take a wholistic look at the state of the economy and proffered ways to its exit from the current recession.
According to the chairman organising committee of the conference, Shola Tinubu, this year’s conference, was aimed at aligning with federal government’s Ease of Doing Business initiative to remove all inhibitions against growing insurance business in Nigeria.
“It is insurance practitioners and stakeholders’ pleasure to applaud the federal government for the all policy directions, especially against the backdrop of the nation’s recessive economy.
Delivering his key note address, Chairman of Heirs Holdings, Mr. Tony Elumelu listed strategies that can be adopted to promote, attract and retain investments, as well as areas of improvement to ensure the country achieves long-term goals – employment, empowerment, and economic opportunity for our people.
He said: “The facts are startling: Nigeria accounts for nearly 50 percent of West Africa’s population and is currently home to 184 million inhabitants – a figure expected to double to over 380 million by 2050. Out of this, 60percent will be under 30 years of age.”
Elumelu, who is also the Chairman of United Bank for Africa and founder of The Tony Elumelu Foundation said that for Nigeria to successfully position herself to promote domestic business and attract investments, the public sector must improve its process of doing business.
He noted that the private sector can only thrive with the support and enabling environment created by government and its agencies.
“We need the public sector to be willing partners in establishing the right, investment-worthy business environment we need in Nigeria. This is the only way Nigeria can be truly open for business. I must recognise here the good efforts of the Buhari – Osinbajo administration.
“But you must go one step further. You must re-orientate the minds and disposition of the executives charged with implementing your vision. They must buy into it. They must begin to see themselves as business enablers. They must realise the urgency of the moment and the need to quickly reposition our economy lest disaster of monumental proportions befall us all. They must be willing and committed apostles who share the vision of the masters – otherwise, there will only be motion without movement”, Elumelu, mentored.
Elumelu said that the government needs strengthening and capacitisation of major institutions in the various sectors. He spoke on the status of Nigeria’s Judiciary, saying the presence of an independentJudiciary ensures the objective enforcement of rule of law, guarantees the protection of properties and contracts, and assures investors of a neutral platform to settle unforeseen business disputes in a timely fashion.
He advised: “The adjudication mechanism in Nigeria must be improved to support government’s efforts in getting Nigeria ready for business.”
On the legislative arm, Elumelu said: “This arm of government is especially critical. As elected representatives of their constituencies, legislators must pass laws that are good for business, enable job creation, and encourage the inflow of investments.
“The only way legislators can put their people first is by focusing on designing a business climate that creates Jobs Jobs Jobs.”
Elumelu also observed that some bills that have the potential to transform the entire industries and should be passed into laws are delayed for too long, pointing out that the best way these institutions of government can function effectively and ensure the country is open for business is for them to work together with a shared purpose, consensus and deep alignment to accomplish the three Es – employment, empowerment and economic opportunity for Nigerian people.
He further said to position Nigeria as the destination for global investment, the three arms of government must agree on the vision for the country; the roadmap to achieve this outcome; as well as the role that each respective arm must play to accomplish this vision.
The UBA chair also noted that Nigeria can only be open for business if transport system is efficient, especially road the network, sea infrastructure, air and rail system.
He said: “Poor infrastructure at best increases the cost and time for doing business, and at worst breed uncertainty which is difficult to measure, and thus, dissuades investors from doing business in a country.
“Nigeria’s infrastructure gap, currently estimated at $14 billion annually, may be considered as one of the greatest impediments to doing business in the country but in my opinion, also represents tremendous opportunity for discerning investors who can plug this deficit.”
On the insurance sector he said: “I also appreciate the current on-going industry reforms which I hope will take the insurance industry to its rightful leading position in our financial service sector, as is the case in the developed world.
“In more advanced economies, the insurance industry leads the financial service sector, even owning banks in several cases. I expect this to happen very soon in Nigeria given the reforms in the pipeline.”
Recommending the way forward for the sector in particular, Elumelu said that regulators must wear a different hat or improve as the industry is transforming and modernising.
He urged insurance operators to be predictable and put on sense of urgency, responsiveness to encourage more Nigerians to participate in the insurance industry .
In his paper titled Insurance Industry, Navigating the Odd, the Group Managing Director, Custodian and Allied Insurance Plc, and a former Chairman Nigerian Insurers Association, Mr. Wole Oshin, called for a build up of a mega insurance industry that will encompass insurance itself, pensions and health insurance schemes.
He said this has become necessary to make Nigerian insurance sector be in tandem with the insurance sector of country like UK where Nigeria drew its insurance experience.
Oshin, noted that insurance industry in Nigeria, has over the years been struggling for survival, adding there is need to reinvent the industry.
He also challenged the industry operators to push out more value in the compulsory insurances than just waiting for government enforcement.
Oshin said it is unfortunate that while stakeholders in the industry often compare Nigerian insurance sector’s annual premium with those of other countries and conclude that the sector’s turnover falls much below those of other countries, they forgot the fact that the quantum of premium often quoted by insurance sectors of those countries include their insurance premium, pension assets and health insurance proceeds.
He said there is need to bring pension and health insurance scheme back to insurance so as to have a mega insurance sector.
Also speaking at the event, the Commissioner for Insurance, Mohammed Kari said insurance is but a vital link in the vast chain of business activities in any economy.
According to him, insurance is also the best vehicle for reducing economic losses as it serves as a stabiliser and promoter of an economy’s commercial activities.
“In the spirit of the Executive Order issued by the Acting President, Professor Yemi Osibanjo,on the ease of doing business, the commission, has commenced a review of its processes, which include timelines and datelines as stipulated and the longevity of time period for certain documentations e.g, approvals, licensing and permits”, Kari stated..
According to him, the Nigeria development plan vision 2020 described the Nigeria insurance sector as “a gross untapped opportunity “with low market penetration.
He said the foreign investors, having noted these great opportunities, are attracted by the huge potential in the Nigerian insurance space, noting that the investors are ready to position themselves for the future, hence the likes of Axa, Prudential, Liberty, Swiss RE, Sunu Group, Saham, have taken positions in the industry and in partnership with indigenous companies for development and growth.
Kari noted that the country witnessed three foreign acquisitions into the sector in 2014, two in 2015, five in 2016 while two Companies are now in progress.
He said despite that, the growth of the Nigerian insurance industry is hinged on right products, innovation, prompt claims payment and healthy competition between local players and their foreign counterparts.
“It is worthy to note that insurance entities have been working hard on clearing some of the misconceptions inhibiting insurance penetration and growth by planning massive sensitisation campaigns across multiple communication channels. Once the consumers understand and value the actual benefits of insurance, the Nigerian insurance industry will grow sharply and prosper, as it has been the case in many other countries. The presence of foreign insurers in the Nigerian market is another incentive expected to boost penetration, technical capacity and service delivery”, he said.