Controversies trailing the purchase of N4 billion building in Abuja by the National Insurance Commission has been described as the usual volatile behavior of insurance industry workers’ towards innovations, writes Ebere Nwoji
Stakeholders in the insurance sector have reacted to the on going Controversies surrounding the intended purchase of a N4 billion property by the National Insurance commission (NAICOM) in Abuja.
The stakeholders said given the latest explanation by the commission on the due process followed in the purchase of the property and the dual purpose for which the commission said it wanted to use the property for, it was a step in the right direction.
The stakeholders who anchored their support for the property purchase on the dual purpose for which the commission said it was meant for, which are the NAICOM Academy and new office complex for the commission, described the ensuing agitation on possible non payment of staff salary after the purchase and probe by some board members on the usual volatile attitude often exhibited by the industry whenever the regulator attempts to bring innovative change towards uplifting the status and standard of the industry.
Operators’ views
One of the stakeholders and chief executive officer of a big insurance firm in Lagos who spoke to THISDAY on anonymity, lamented that agitations like this is exactly what has kept the industry at its present backward position when compared to its counterparts in other climes. This attitude, he added, has kept the insurance industry in its present position of poor cousin of the banks.
The insurance technocrat went down memory lane to recall that agitations like this made recapitalisation in the industry an impossibility and has kept the entire industry at a ridiculous capital base level to the extent that today, capital base of Micro finance bank is higher that capital base of insurance underwriting firms who suppose to be a tripod on which the entire economy stands.
He recalled that the last recapitalisation in the industry was done in the year 2007.
He noted that despite the high inflation rate in the country, several attempts to upgrade the industry’s capital has proved impossible as similar arguments, probes and thousands of reasons why the commission should not do that have always been raised by some industry stakeholders and their supporters and government through the judiciary had always helped them to have their way.
He said these developments in the industry had in the past removed many commissioners for insurance who initiated such changes and had apparently kept the industry at its present stagnant position.
New Plan, Similar Initiatives
Commenting on the present move to purchase the NAICOM academy building, the insurance technocrat noted that since the launch of the industry’s medium term plan in 2009- the Market Development and Restructuring initiative (MDRI), both the commission and the industry operators have been working tirelessly to uplift the insurance market standard.
He said they are doing this through repackaging of their operations, refining and restructuring of the industry’s products and rebuilding of physical structures housing the various insurance firms.
He cited examples of a good number of world class buildings commissioned by NAICOM in the industry after the MDRI launch as the Leadway Assurance building in Iponri, NEM insurance building along Ikorodu road, former WAPIC Insurance building now Coronation Insurance building along Awolowo road, the Insurance house at 5 Moloye street Yaba housing the National Secretariat of the Nigerian Council of Registered Insurance Brokers and the latest being the magnificent insurance house built by the Nigerian Insurers Association(NIA) at Saka Tinubu, Victoria Island Lagos.
He also mentioned the college of insurance and Financial Management house along Lagos Ibadan Express road saying these are world class structures that tend to redefine the future of the industry to give it the much desired global best practice face lift.
The insurer argued that if these bodies regulated by the commission should go extra mile in changing the face of the industry through modern and befitting structures, “will it be too much for the commission which stands as the custodian of every thing concerning insurance in the country to have a structure like the one it has moved to purchase.”
Describing the ongoing agitations by some staff of the commission and their supporters as the usual propaganda that has continued to retard the progress and advancement of the industry the insurance technocrat said the NAICOM academy was overdue to be established by the industry.
This is, he stated, is because there is lack of insurance technical personnel like actuarial scientists, which the commission has been struggling to see that the industry starts breeding at home.
NAICOM’s stand before now
THISDAY recalled that the Commission had two years back at the investiture ceremony of the former President Chartered Insurance Institute of Nigeria (CIIN), Sir Muftau Oyegule said that it would set up an institution it tagged, ‘NAICOM Academy,’ to provide the training need of regulators across West Africa.
The Commissioner for Insurance, Mr. Sunday Thomas, had explained that establishment of the regulators’ training academy was necessitated by NAICOM’s concern for specialised regulators’ training.
“It is no longer news that the Commission is committing huge resources to actuarial development in the country in collaboration with the institute through the College of Insurance and Financial Management though the entire process has been affected by the advent of the COVID-19.
“What this means in essence is that insurance practitioners must learn to inculcate the new world order brought about by the COVID-19 experience. This has become an imperative rather than an option,” Thomas said.
FG’s Industry Mandate
President Muhammadu Buhari had at the 47th AIO conference hosted by Nigerian insurance industry last year said that the Nigerian Insurance sector needs the right mechanism to thrive and take the lead in Africa.
Buhari noted that there was a great future for insurance industry in Africa urging insurance firms in Nigeria to take advantage of efforts by the federal government to grow the non-oil sector of the economy through innovations.
“There is a great future for the insurance industry in Africa. We only need to put the right mechanism in place for it to thrive. I assure you that this administration has and will continue to support insurance growth in Nigeria and Africa at large, “he said.
Also at the event, Vice President Yemi Osinbajo, had in his closing remarks, charged Nigerian insurers to work towards having homegrown international insurance conglomerates like the country’s banks with operations in many African countries.
He said, “Nigerian financial services companies, especially banks, are already in many African countries, the likes of Zenith, Access, UBA. How about insurance companies? We should now be looking at developing homegrown international African insurance conglomerates. The time is now.”
Analysts’ View
Given the present agitation on the purchase of the structure for the insurance academy, industry analysts have viewed that if these agitators were allowed to have their way as has been the case in the past, hardly would the commission as the regulator succeed in any move targeted at moving the industry forward from its present position.
The analysts recalled that former commissioners for insurance like the late Emmanuel Chukwulozie and Oladipo Bailey paid dearly with loss of their jobs just because of one innovation or the other they introduced which was misinterpreted by some staff and other stakeholders.
They also recalled that even the immediate past commissioner for insurance, Alhaji Mohammed Kari, paid dearly with his second tenure in office for making a move for recapitalisation in the industry.
The analysts were of the opinion that the same industry insiders were the ones raising these false allegations whenever innovation are introduced by the commission as a regulator and government will always dance to their tune of arguments and allegations.
Questioning how long this would continue to happen, the analyst said government should trade with caution in dancing to the tune of those they described as false whistle blowers if the industry must shift from its present backward position.
Following the controversy surrounding recent move by NAICOM to buy a structure in Abuja for its proposed new office complex and NAICOM Academy, the federal government had ordered the suspension of the transaction till further notice and had set up a committee to probe the commission’s intended action.
NAICOM’s Defense
NAICOM had in its reaction to reports on the planned building purchase defended its action saying: “The attention of Management of the National Insurance Commission, NAICOM is drawn to the above captioned publication in the Vanguard Newspapers of August 29, 2022 in which the Commission was among other things alleged to have deceived President Muhammadu Buhari GCFR and the Federal Executive Council into approving the purchase of a new office building in Abuja.
“It was also stated in the publication that the Commission said it was buying a “ready to use magnificent office complex” rather than an uncompleted building.
“While the Commission does not intend to join issues with the media, it has become imperative that the general public be availed with the facts as they are. It is on this premise that the Commission state as follows: That the management of the Commission through the Honourable Minister of Finance, Budget and National Planning presented to the Federal Executive Council presided over by His Excellency, President Muhammadu Buhari, GCFR an unfinished property for approval to be acquired as NAICOM Academy and office accommodation following the approval by the immediate past Governing Board of the Commission.
“All documents relating to the property clearly state that the property was in an unfinished state. The Commission had prior to FEC approval, obtained a “No Objection” from the Bureau of Public Procurement (BPP) following the valuation of the property by the Federal Ministry of Works and Housing. Adequate due diligence was conducted on the property for acquisition and all relevant approvals were secured by the Commission.”
“Provision was made in the 2022 approved annual budget of the Commission for the purpose of acquiring the building for the Commission. The building is to serve the dual purpose of housing the newly established NAICOM Academy, which is an initiative of the present leadership of the Commission to address knowledge gap in the insurance sector regulation and supervision not only in Nigeria but across Africa and beyond and also serve as the new head office of the Commission.
“In order to address the problem of low insurance penetration, entrench the culture of insurance in every part of the country and enhance the effectiveness of its surveillance in all the geopolitical zones of the country, the expansion of the Commission’s infrastructural facilities is inevitable thus the Commission requires a befitting Office accommodation to curtail any future office space crises. This clarification has become necessary to clear any doubt in the minds of the public with respect to the process followed by the Commission in its efforts at acquiring the property, ”the commission stated.
