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Monday, August 15, 2022

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An Industry Roadmap for Next Commissioner for Insurance

Considering the contests Nigeria has experienced to have candidates elected into political offices this year, I would sometimes wish that other offices, though professional but equally political, undergo such contests involving manifesto-based campaigns and broad consultation with stakeholders.

More than the just concluded elections, the emergence of a new Commissioner for Insurance (CFI) and helmsman of National Insurance Commission (NAICOM) through appointment by the President matters and should matter for many Nigerians.

This is because the Nigerian insurance industry bears the promise of employment to increasing number of young job seekers, the opportunity of long term investible funds as we enhance our infrastructural base and the hope for improvement in the management of the emergent risks associated with decisions concerning our national economy.
It would therefore have been exciting to see and hear persons interested in the office of CFI express their views on topical issues in insurance and their plans and programmes for the industry during their tenure. That office has become too important for someone to be quietly moved in, especially when it is a 4-year tenure with the option for re-appointment!

The CFI serves the broader Nigerian economy and represents the Country internationally, hence should not be viewed as a position that only deals with industry operators as it has been over the past years. Insurance can earn its rightful place as a key aspect of our national economic engine, if the next CFI has, firstly, the mindset of a Regulator and then understands the developmental nature of insurance.

Simply put, the insurance industry is confronted by critical challenges which require very bold decisions and an integrated plan of action to safeguard the nascent efforts by the out-going CFI to put the industry on its next growth path. The critical challenges I will like an interested candidate for the position of CFI to speak about are:

Promoting Insurance Education
To address the public apathy towards insurance, the next CFI must be in the forefront of educating Nigerians about insurance, using a well-articulated multi-year communication plan which will be anchored on active participation in the areas that Nigerians readily show up namely: Entertainment, Sports and Social Media. Visits to prominent persons and places across Nigeria will secure the acceptance and approval of the public and surely the conversations on insurance will heighten.

The next CFI should not get burdened by internal issues at NAICOM where there are very capable hands as Deputy Commissioners to handle them. He should rather identify with the efforts of some Nigerian entrepreneurs and their benefactors with a view to engaging the next generation both in terms of seeking career opportunities and investing in the industry.

You can imagine the impetus such promotional campaigns will give serious operators to engage the markets and rack up the policies while more Nigerians will willingly subscribe to insurance. This is how some of the recent developments like introduction of Micro-insurance and Takaful (Islamic Insurance) will be deepened.

Insurance must be indeed for all of us! On this I will like to have the views of any interested person in the position of the CFI.

Amending/Updating the Governing Laws

The progress made by the out-going CFI to get the amendments signed into law must be concluded while renewed efforts must be made to ease the process of amending and updating the governing laws. Though, I have always believed that so much could have been achieved with the current status of the law, so I expect the next CFI to start from where he/ she meets it, work with it and address what the law permits while seeking the new reviews.

The relationship with the supervising Ministry –Federal Ministry of Finance must improve to the extent that the National Assembly will put insurance on its priority list of economic issues. The CFI must earn greater respect of the Finance Minister to the extent of being recommended for inclusion in the National Economic Management Team set up by the President.

As part of the updating of the law, in my view, the insurance eggheads should seriously consider encouraging persons with other professional certification and leadership acumen to serve as Chief Executive Officers of Insurance Companies (not Brokerage Firms yet) rather than wait for the implosion that may occur in the next few years.

It is unthinkable that while the business world has settled with the idea of successful CEOs crossing from automobile industry to food and IT to lead them successfully, the Nigerian insurance industry is stuck with insisting that only professionals with insurance certification will hold the position of CEO at insurance companies. I believe the growth-to-its-potential for the insurance industry in Nigeria rests on this issue.

Little wonder the position of Chairman in some insurance companies have again become active because of this issue and NAICOM knows that the CEOs at such companies are not in charge. So the next CFI must take a serious view of this as he/she seeks to update the laws.

The other painful issue is that of sanctioning insurance operators who fail to meet minimum operational conditions. In the past 5-6 years, not a few insurance companies have been operating from an insolvent position, incepting new businesses and struggling to honour their obligations to policyholders and employees.

These companies have encouraged rate-cutting because the bigger ones are afraid of losing transactions to them and claim settlement process remain fraught with disappointments in spite of the introduction of Service Level Agreements to check such unprofessional and illegal practices.
What could be the reasons for the next CFI to tolerate such misdemeanours as the out-going CFI has done and giving reason that the insurance industry will lose public confidence and the positive gains recorded especially, with the enforcement of the- “No Premium, No Cover” regime.

It will be interesting to take the views of potential appointees to the office of CFI on these issues and more.

Expanding NAICOM Operational Presence

NAICOM is readily compared to CBN by many industry watchers but we know that the similarity stops at being the Regulator of an industry. So while CBN can afford to be sparsely present, operationally, across the country, except for its Currency Centres, NAICOM needs to be seen in every State.

This is because of the peculiar position of insurance which is not as accepted as banking and the need to engage the public more as expressed in the first challenge. Indeed, NAICOM should lean more on the experience of FIRS which has been transformed into a friendly agency of Government on an issue of tax which many Nigerians had abhorred.

The real issue is, even with serious investment of time and resources in enlightening the public about insurance, NAICOM needs to be easily accessible so members of the public can bring feedback and enquiries that will strengthen the engagement.

NAICOM should consider having desks at Points of Sale for insurance including Vehicle Licensing Offices and the Ports to guide and inform the public on the spot, thus giving more confidence to the process and also directly debarring touting and fake documentation.

The Commission must do more work with the Consumer Protection Council and the Insurance Consumers Association of Nigeria across the States where it will be located to ensure that public complaints are not kept until complainants can reach Abuja or get online. Far too many Nigerians that need insurance are yet to get online.

It is my conviction that the insurance industry is indeed the next BIG thing but it will only happen when we take some breakthrough steps as mentioned here. The insurance industry can boost the employment efforts of Government and can provide a better sense of personal finance to save many great dreams as we know Nigerians have. We await the next Nigerian Commissioner for Insurance!

Ola Gam-Ikon

Business Journal
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