The National Insurance Commission (NAICOM), has said that in spite of macro economic challenges which has bedeviled businesses in Nigeria, insurance sector recorded a year-on-year growth rate of 6.2 per cent at the end of March, 2022.
The commission also said the market size of the sector also grew at 15 per cent in the same period, thus standing out as one of the fastest sectoral assets expansion in Nigeria during the period.
NAICOM’s Deputy commissioner for Insurance Technical, Sabiu Abubakar, who stated this while speaking at the second edition of the Chartered Insurance Institute of Nigeria’s (CIIN) 2022 Business Outlook held in Lagos, also said the insurance industry held a commendable market average retention of 73.3 per cent in the first quarter of 2022.
Abubakar said in line with this achievement, NAICOM has strengthened its regulatory oversight and implored operators to settle genuine claims within a reasonable time to ensure perfect achievement of their obligations.
He however regretted that despite the above improvement indices, the insurance penetration in Nigeria still remained low at 0.5 per cent computed as Gross Premium Income as a percentage of Gross Domestic Product) which he said was the lowest in Africa.
To deepen penetration, Abubakar said the Commission has embarked on a number of initiatives with a view to stimulating further growth in the industry.
Some of the initiatives embarked upon by the Commission, he said, include Market Development and Restructuring Initiative (MDRI) /Compulsory Insurance; Collaboration with state governments; Compulsory Insurance Task Force; Financial Inclusion and Micro insurance.
Others according to Abubakar are Takaful Insurance; Banccassurance; Insurance of Government Asset Guideline; Regulatory Innovations; Web Aggregator Guideline; Sandbox Guideline and Local Content Regulation.
Abubakar said that insurance regulation and supervision were the bedrock of national economic development, stressing that he believed NAICOM’s reforms and regulatory initiatives would positively impact the insurance industry if achieved and that the industry would witness tremendous development and growth.
He implored insurance practitioners to remain complaint and support the commission’s efforts in developing the sector.
The NAICOM’s Deputy commissioner said the Commission was getting ready for the full implementation of Risk-based Capital (RBC) in 2023 or 2024.
Abubakar said the Commission had penciled down another eight companies for commencement of the RBS examination this month of August.
He said the Commission had started training its staff on Risk-Based Capital (RBC) in collaboration with FSD, Africa.
He said while hoping for the full implementation of Risk Based Supervision, insurance operators were expected to carry out capacity building of their workforce on RBC as the involvement of the operators on the RBC framework was very demanding in terms of human technical capacity and other resources.