Tony O. Elumelu, Chairman, Heirs Insurance Group, called for the urgent recaptalisation of insurance companies in Nigeria, as part of a six-point agenda to completely transform the insurance industry.
He made the call at the 2023 National Insurance Conference, organised by the insurance regulator, NAICOM, in Abuja.
Elumelu began his keynote speech by commending the Commissioner for Insurance, Mr. Sunday Thomas, for his foresight and courage in tackling the critical shortcomings of the industry, while encouraging him to do more.
During his presentation, he stated that the current capital base requirement limits the capacity and capabilities of key players in the industry. To address this, he proposed an upward review of the capital base from N5 million to N1 billion for Brokerage firms, N8 billion to N20 billion for Life insurance companies and from N10 billion to N30 billion for General Insurance companies respectively.
He said: “This recapitalisation is not about increasing the barriers to entry into the industry. We must ensure that the sector has the financial muscle and backbone to handle more complex insurance transactions”.
Elumelu also called for a review of the dichotomy in insurance licenses between life and non-life companies that has hindered the progress of the industry. He charged the regulators to open the offering of composite licenses, adding that consolidated operators could operate with a capital base of N50 billion.
In addition to the points, Elumelu also highlighted poor legislation, stifling policies, and inefficient claims processes, as barriers to achieving sustainable growth in the industry. He challenged all insurance companies to jointly commit 0.5% of revenue to drive industry-wide awareness and acceptance campaigns.
Commenting on the talent and workforce within the industry, Elumelu called for a change in approach. According to him: “We need a younger and more agile workforce. We have so many young people, but the insurance sector is not attractive to them in the way banking, oil and gas, fast-moving consumer goods, IT/technology, and creative areas like Nollywood are. We need to attract the youth of our country into the sector.”
In conclusion, Elumelu emphasised the critical role that regulators and the government must play in making insurance a common right of every Nigerian citizen.
He added: “It is embarrassing that Nigeria has less than 2% insurance penetration, in a nation of over 200 million people, struggling to survive, amidst the harshest economic realities. We must re-assess and eliminate the stifling policies, roadblocks, and complacency in the insurance system, to encourage innovation and provide our people with simple and accessible insurance, not as an option, but as a fundamental right to secure their future.”
Heirs Insurance Group is the insurance subsidiary of Heirs Holdings, one of the leading pan-African investment companies, with investments across 24 countries and four continents, founded and led by Tony Elumelu.
With a rapidly expanding retail footprint and an omnichannel digital presence, Heirs General and Heirs Life serve both corporate and individual customers across Nigeria.
Heirs Insurance Group is championing financial inclusion and leading the digital insurance play in Nigeria, demonstrating its mission to democratise access to insurance.
As part of its unique proposition, the Group rolled out digital and mobile channels to simplify access to insurance and make insurance accessible to everyone.
