By Zainab Iwayemi
Sunday Thomas, Nigeria’s commissioner for insurance and chief executive of National Insurance Commission (NAICOM) has revealed that as a way of sanitising the insurance sector and redeeming its image, the commission was compiling a list to detail insurance companies with huge unsettled claims for necessary regulatory action.
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The insurance commissioner at the 2020 insurance directors’ conference it organised in Lagos, told the board of directors of various insurance companies, that insurance has gone past the age of huge backlog of claims and that companies should live up to the task of being responsible to their clients as a good strategy.
“The era of a huge backlog of claims should no longer be associated with our companies, and while the commission is profiling companies with huge unsettled claims for necessary regulatory action, companies that are responsive to the plight of their clients in prompt settlement of claims are encouraged to sustain the good business conduct. To be able to meet their claims obligation at all times and participate in high ticket businesses, especially in the oil and gas sector, operators in the industry must strengthen their human and financial capital for effective participation in big-ticket risks,” Thomas said.
Comparing Nigeria’s insurance with its counterparts in developed economies, Thomas attributed the cause of ‘lack of faith’ in Nigerian insurance to unfavourable government policies.
“It has been observed that the gains of domestication policy of the government as enshrined in Nigeria Content Development Act 2010 is gradually losing its meaning for the insurance sector. More businesses especially in the oil and gas and the aviation sectors are now being reinsured abroad. Of more concern is the declining participation of life companies in the annuity business which is the emerging business for our industry. These are the areas where the industry can impose itself on the economy through the control of funds for national development.”
Furthermore, the commissioner also stressed on the need for the insurance industry to invest substantially in technology as a key driver for developing the market in Nigeria.
“The institutions should be prepared to digitalise their processes, procedures and systems in order to make their operations seamless and real-time. The commission is investing heavily in automating its processes and expects nothing less from the insurance institutions. An industry Information Technology Guideline has been issued for the operators, and the commission requires your support and cooperation for effective compliance,” Thomas emphasized.
He, therefore, called on companies to engage in massive awareness programmes on relevant insurance cover for lives and properties of individuals and all businesses, citing that recent crises within the sector can be attributed to the youthful restiveness from the recent #ENDSARS protest, which was hijacked by hoodlums and louts who turned a peaceful action into social unrest leading to the vandalizing of properties and lootings amongst others.
“This is indeed an eye-opener for the Nigerian insurance market,” he said.