The chairman of Heirs Holdings, Mr Tony Elumelu has suggested that the Nigerian Insurance sector be opened to young, brilliant and innovative minds.
He urged the National Insurance Commission (NAICOM) to limit years of experience only to technical areas.
The global financial icon also proposed a N50 billion capital base for consolidated insurance companies operating in Nigeria, with general business N30 billion and life businesses N20 billion.
Elumelu, made the call today in Abuja at the on-going National Insurance Conference 2023, organized by National Insurance Commission (NAICOM) with the theme: ‘Redefining Safety: Insurance Solutions For Public Buildings and building under construction’.
Elumelu said it had become necessary to recapitalise the insurance industry firms in in the country as current N8billion capital base for life and N10 billion for general is inadequate.
He also called for review of the dichotomy in Insurance authorisations/licences between life and non-life, adding that consolidated operators should have N50billion. “Let us use regulation to shape behaviour and enforce compliance.”
“NAICOM should allow brilliant minds to come into the insurance sector and limit years of experience only to technical areas. Let us open the insurance sector in Nigeria to our young and innovative minds.”
He said with the right enabling environment, we will see the transformation of the Nigerian insurance sector.”
“Let me emphasize that our regulators and the government have a critical role to play in making insurance a common right of every Nigerian citizen”
Elumelu also recommend N1billion recapitalization for brokers, while noting that with “the devaluation of the currency, you are talking about USD 8 million, USD10 million capital requirements for an insurance company in Africa’s largest economy.
“How can an industry intended to ‘insure’ and mitigate the risks associated with economic growth of a country with such low capital requirements.
“Let me be clear, recapitalisation is not about increasing the barriers to entry into the industry. Gatekeeping is not the objective here.
“But we must ensure that the sector has the financial muscle and backbone to handle more complex insurance transactions whilst extending reach. That is the only way the industry can scale and expand operations out of Nigeria and into Africa!.”
He also called on the commission to focus on substance and things that will shape the sector and stop approving adverts.
He said the commission should use the time for approving adverts for more important aspects of regulation and save taxpayers money for more catalytic actions.
He also recommended that the industry should mandatorily contribute 0.5 percent of total revenue to drive industry awareness for 5 years, noting that the leadership of Nigeria insurers Associations (NIA ) should administer this initiative professionally.
“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. All within a regulatory framework that serves both clients and grows our industry.”
Earlier, the commissioner for Insurance Sunday Thomas in his welcome remarks said the Commission under his leadership has remained resilient and focused on implementing initiatives that will foster development of the Nigerian insurance industry and align its fortune with that of the nation as the Africa largest economy.
He said Commission as part of its medium term NAICOM Strategic Plan 2021–2023: is ensuring improved safety and soundness of the Nigerian insurance sector to continue to de-risk economic activities of Nigerians through the enhancement of our prudential regulatory tools and good corporate governance practices; Migration of the Commission’s supervisory regime to align with global best practices. This initiative has enhanced the Commission’s distress management and market restructuring; Implementation of Project E-Regulation through operationalized Business Process Management Solution and NAICOM Portal. The BPMS is currently being used to process applications from insurance institutions while the Portal remains the focal point for generation of unique policy identification numbers for all policies as well as repository for statistical data including verification of insurance policies issued in Nigeria.
