In a bid to combat the abysmal level of insurance penetration in Nigeria, which currently stands at 0.4 percent of the total population, the Nigerian Council of Registered Insurance Brokers (NCRIB) is urging the Federal Government to give insurance its rightful place while embarking on its rent to own projects designed to curb housing deficits in the country.
The council, which noted section 64 & 65 of insurance act 2003 that stipulates a compulsory insurance for ongoing construction projects, wants the Federal Government to insist that appropriate insurance policies be in place for these houses at the construction stage, and for the win-win benefits the project holds for government, the allottees and their families.
Nigeria stands comparably low with South Africa and Kenya, which has insurance penetration of 17 percent and 3 percent respectively. This can however change significantly when the government through laudable initiatives like the rent to own scheme make insurance packages statutory for beneficiaries.
The Federal Government recently announced that N197 billion has been spent to construct 26,002 houses across the country, while 13,953 homes across the country were also renovated.
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“As a professional body, the NCRIB wishes to laud the Federal Government’s Rent-to-Own product designed to enhance affordability by eliminating the need for down payments and other costs associated with normal mortgage loan arrangements.
Definitely, this will go a long way to address the housing deficit, a serious challenge that any government should tackle headlong.
However, the Council wishes to enjoin Federal Government to give insurance its rightful place,” Sola Tinubu NCRIB president told insurance journalist in Lagos recently.
Speaking on efforts carried out by the council towards this goal, Fatai Adegbenro, executive secretary of the NCRIB, said that “what we do annually at the secretariat is that we write to all MDAs, government agencies, as well as the secretary of the federal government sensitising them about the need to make provision for insurance and to ensure that they cover up their assets and liabilities because all these are necessary.
We also consider ministries like ministry of power/works who engage in series of contract works and sensitise them on the need to make use of brokers to assist them in arranging these insurances as well as making adequate provision for the budget, because if it’s not factored into the budget, there is no way they will be able to do that. On a quarterly basis, we also send them reminders.”
Tinubu, the council’s president further explained that because of the focus the brokers want to have on the rent to own project, which the government is currently working on, “what we have to do is to exert a bit more engagement. We have a very good relationship with the minister in charge of housing. He was present at my investiture to give a keynote address and he had mentioned that he is broker-friendly. So it’s about continuing the discussion on this specific area,” Tinubu said.
Seizing the opportunity to dwell on upcoming national issues, the council of brokers penned an advice to the government on the upcoming 2019 general elections.
According to them, there is no better catalyst for investment in any economy than the stability of the polity.
“Therefore, we enjoin our politicians to make the welfare and progress of the nation and its people their primary agenda and the focus of their noted actions.
“As we are all aware, the country’s political process is gathering momentum towards the 2019 general elections. Though as a professional body, we must stay above party politics but are duty bound to positively impact on our political environment as it must not elude us that economy and politics are inextricably woven.
The council would like to use this medium to enjoin politicians to endeavour not to overheat the polity in view of the potential negative effects of such actions on the socio-economic development of the nation.”
Expressing caution on the recently announced recapitalisation exercise in the insurance industry, which would be partially introducing the risk-based capital model in a three-tier recapitalization system, the brokers noted that although it will ensure virility of the industry the tier system or process is independent of the assessment for solvency.
The brokers thus noted that the gap creates a situation such that companies classified as top tier could possibly have significant solvency issues.
“Invariably, insurance companies would be looking at different options to respond before the deadline of January 1, 2019. It is definite that the companies would contemplate several options, including the options of injection of capital and mergers and acquisitions.
“Whichever strategy is chosen and no matter how disruptive, I would like to enjoin the companies to focus on how to grow the insurance industry as well as how to make insurance an imperative,” Tinubu further stated.