Lagos, Jan. 1, 2024: The insurance industry in the year 2023 recorded unprecedented success with the launch of its 10-year strategic transformation roadmap to re-sharpen the sector’s landscape, positively.
Stakeholders, however, view this development as a strategy for upgrading the industry as a market leader in the foreseeable future.
Mr Sunday Thomas, Commissioner for Insurance, who spoke at the launch of the roadmap, said that the 10-year roadmap, which would run from year 2024 to 2033, is expected to revolutionise the industry with a well-coordinated implementation approach.
Thomas said that by 2033, insurance penetration, expected to move from the current rate of 0.4 per cent to 2.1 per cent, would substantially improve the rating of the Nigerian insurance market on the global map.
He noted that the industry would seek to continue its transformation journey along seven strategic thrusts with the objective of achieving the corresponding goals.
The thrust of the strategic plan, according to him, include transformation of the regulatory environment to sustain industry growth and transition to risk-based capital model.
It also involves promotion of insurance awareness and adoption, broadening of insurance product offerings, and improvement of the effectiveness of its distribution channels.
The strategy would also enhance industry digitalisation, deepening talent pool and capabilities, as well as support of the country’s economic transformation and sustainability agenda.
The commissioner said the performance and potential of the insurance sector over the years experienced an average steady year-on-year growth of 15.1 per cent in premium income.
This development, he observed, is far below the opportunities provided by the Nigeria economy, as records indicate that the cumulative assets of the Contributory Pension Scheme (CPS) stands in excess of N17 trillion.
He stated that the sector was expected to maximise its share of the growing fund; hence, the need for stakeholders to support the government towards reviving the economy and de-risking individual and business ventures.
Thomas said: “In pursuit of the drive by President Bola Tinubu towards a thriving economy, the insurance sector must be strengthened to play its role in realising this laudable national objective.
“NAICOM (National Insurance Commission) is very mindful of our collective responsibility to ensure that insurance institutions prosper; for it is in that prosperity that lies our attainment of our regulatory objectives of safeguarding insurance.
Mrs Ebelechukwu Nwachukwu, Chairman, Sub-Committee on Publicity of the Insurers’ Committee in an interview with the News Agency of Nigeria(NAN) described the 10-year roadmap as a dynamic plan for the industry within the next decade.
Nwachukwu, who is the Managing Director, Royal Exchange General Insurance, maintained that the insurance industry regulatory environment had improved significantly.
She noted that continuous improvement, Risk-Based Supervision(RBS) and Risk-based pricing as well as capital is an indicator to the growth of the industry.
In achieving the strategic thrust, the managing director stated that NAICOM had commenced mobilisation of the RBS in some insurance companies to set standards for the operators.
Nwachukwu observed that the regulator had, consequently observed descripancies, including unlicensed agents and brokers by some insurance companies.
She emphasised that NAICOM would, henceforth, not condone employment of quack agents and brokers by operators.
In broadening insurance product offerings and effectiveness of distribution channels, Nwachukwu said that the regulator had encouraged insurers on underwriting annuity policy.
To ensure that annuity, as a product line, grows significantly, she revealed that insurance operators had agreed on the need to increase awareness and continue to build trust.
“With the amount of money in the pension industry, we should expect that a lot of that should be downloaded into the insurance industry by way of annuity.
Commenting, Mr Edwin Igbiti, President, Chartered Insurance Institute of Nigeria (CIIN), said that sustainability has become a critical agenda in all sectors and the insurance industry, not an exception.
To him, the responsibility of the regulator and operators to ensure that insurance remains a viable and sustainable industry for the benefit of all stakeholders must be paramount.
He noted that while the industry is faced with the challenges of balancing economic growth with environmental and social responsibility, technology has offered opportunities to create positive change in the coming years.
The CIIN president said to drive insurance sustainability, operators must start a rethink of assessing and managing risks.
While emphasising the role of technology in this jet age, Igbiti said that operators now, more than ever before, accurately assess risks and tailor insurance products accordingly.
“By leveraging real-time data, insurers can identify vulnerabilities, anticipate potential losses, and proactively manage risks.
“This not only benefits the insurers themselves but also promotes sustainability by encouraging preventive measures and reducing the overall environmental and social impact.
“Furthermore, technology offers insurers the opportunity to explore innovative insurance products and services that address emerging sustainability challenges.
“Climate change, for instance, presents unique risks that require adaptation and mitigation strategies.
“By leveraging technology, insurers can develop innovative coverage options that protect against climate-related events more comprehensively.
“This includes parametric insurance products that trigger payouts based on predefined weather patterns or satellite data, enabling faster claims settlements and minimising administrative costs,” he said.
According to him, insurers can foster a culture of sustainability and contribute to a greener future by encouraging policyholders to adopt sustainable lifestyles and offering rewards for responsible choices.