NAICOM Determines To Improve Contribution to GDPBusiness Monday, May 26th, 2014
…Premium on Compulsory Insurance Hits N28.68b in three years
“The recent rebased GDP of Nigeria’s economy which placed the country first in Africa, 26th largest economy in the world has placed enormous responsibility on the insurance industry, the sector barely contributed 0.7 per cent, this therefore calls for more dynamic strategies to enable the industry make meaningful contribution to the GDP”, the Commissioner for Insurance, Fola Daniel, said.
Daniel, said this at the 2014 seminar organized for members of the National Association of Insurance Correspondents (NAICO) in Uyo, Akwa Ibom State, that it is no doubt that the challenge of rebased economy has put underwriting companies on their toes which was evident in the volume of claims settled under the compulsory insurance scheme.
Going forward, the commission assured that it will consolidate on the gains made so far and ensure proper implementation of the compulsory insurance products to be able to enhance the industry contribution to GDP.
Meanwhile, NAICOM incepted the Market Development and Restructuring Initiative (MDRI) in 2009, to among others enforce compulsory insurances and eradicate fake insurances in the country. The initiative has been vigorously pursued by the Commission across the six geo-political zones of the country.
From 2008 to the end of 2012, the volume of premium written by the industry on the classes of compulsory insurance business increased by 92 per cent from N14billion in 2009 to N28.68billion.
The Commissioner for Insurance also said that the number of insurance policies written under the compulsory insurance by insurance companies in the last three years also appreciated shapely by 111 per cent from 72,180 in 2009 to 152,181 at the end of 2012.
He maintained that the industry in the last three years has had some geometric projections, adding that the industry will achieve well over 100 per cent at the time the performance of 2013 is added to the figures available.
Though the Commission was unable to attain the N1trillion mark it planned to achieve through the Market Development Restructuring Initiative (MDRI), in 2009, he said that the performance so far shows that industry players are voluntarily meeting up to their obligation without the commission getting involved, adding that they are also meeting up to their responsibility of claims payment.
He noted that the various state governments has continued to show interest in insurance business, adding that group of underwriters have come together to enforce the motor vehicle third party liability insurance in Imo state in collaboration with the state government and the scheme is working very well.
Moreover, he said another group of 19 underwriters are enforcing the Occupiers Liability Insurance in Enugu State, in partnership with the State Government. The commission is working to get more states to embrace these models, he pointed out.
The commission, he stated, recognised the need to develop the retail insurance market, which has remained grossly untapped, considering the vast population of the country. He equally disclosed that, last month, the regulatory body formally launched the Delta State Micro Insurance Scheme in Asaba, Delta State, adding that, Takaful Insurance and Micro Insurance scheme were launched as part of NAICOM’s strategy of financial inclusiveness.
Speaking on Takaful Insurance, he said a good number of companies have indicated their interest in this line of insurance.
“A recent survey reveals that Muslims in the country are willing to buy Takaful products and are in dire need of such alternative to conventional Insurance. This is an indication that there is a ready market for this line of insurance business and the commission is determined to bring such Muslim faithful within the financial inclusion strategy,” Daniel added.
Insurance is a business of selling promises, but when these promises made to policyholders and investors are not kept, he said it then becomes NAICOM’s business to intervene and ensure these promises are kept.
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