Prospective operators are optimistic that opening the insurance industry to new investors will spur huge growth for the insurance market. To this end, they are calling on the Federal Government through the National Insurance Commission (NAICOM), to open the insurance industry for more innovative and competitive market.
The Commission had before now, said it would not issue fresh operating licences to new investors but would rather support acquisition of existing insurance companies. Despite this pronouncement, the Commission issued licences to investors which it deemed would add value to the industry.
Presently, there are 19 brokerage and underwriting firms seeking to commence operation in the sector. Some of the concerned underwriting and brokerage investors have, however, expressed the need to get response from the regulator on the state of their applications almost a year after applications were submitted.
Section three of the Insurance Act 2003 states that no person shall commence or carry on any class of insurance business in Nigeria unless the insurer is registered by the commission. The section of the act further explains that the commission would only give approval when it was certain that it would not be against public interest or the interest of the policy holders.
At a press briefing in Lagos, the Commissioner for Insurance, Mohammed Kari, confirmed that the commission published the names of some operators who applied for new licences last year. He said it was made public to create opportunity for comments on those that applied.
Some industry analysts said that to increase insurance penetration in the country, it is important for NAICOM to intensify efforts on micro-insurance and take full initiatives to make insurance available to more Nigerians and encourage new investors to invest in insurance.
They said the commission should consider reduction of the capital base for micro-insurance and should grant approval for licences quickly. According to them, development of insurance will increase employment in the sector and encourage new investors to make their contributions to insurance growth and development, which is what the sector needs now.
Sunday Thomas, the Director-General, Nigeria Insurers Association (NIA), said the public patronage of the industry is yet to reach the desired level notwithstanding the various legislations enacted to promote patronage. He believes that since the Nigerian insurance industry is largely untapped, it was replete with investment opportunities. “The insurance industry in Nigeria presents a lot of growth opportunities due to the low insurance penetration. Attention should be given more to the development of the retail market while waiting for corporate accounts rebound. Presently, insurance seems to have become investors’ delight,” he added.