In spite the inability of insurance operators to meet their last year's N1 trillion income projection, they are optimistic that the entrenchment of some basic foundamentals will prop the industry to a lofty heights this year. Chuks Udo Okonta reports
Insurance operators were optimistic that by this year, they would be in the trillion naira premium club, but the belief seem elusive as their last year perfomance shows that they are far away from their targets.
To effectively reposition the industry, stakeholders have identified proper budget implimentation, enforcement of insurance laws, adherence to ethical practice among others are key drivers that will propel growth in the industry.
Proper budget implimentation
The President Chartered Insurance Institute of Nigeria (CIIN) Wole Adetimehin, said the operators hope and pray that the implimentation of the budget would be timely and decisive, adding that the government has raised the hope of the public by ensuring that the budget was past before the close of last year.
"We hope they would move strictly to its implimentation. A situation whereby in September, in terms of budget performance, they were recording 40, 50 per cent, that would have definately affected so many sector of the economy. These are the factors that would drive and proper economic growth this year, with insurance sector not been an exemption. We look up the prompt implimentation of the budget," he said.
President Nigerian Council of Registered Insurance Brokers (NCRIB) Mrs Laide Osijo, noted that government should ensure that the budgetary provision for insurance should be strictly used for the purpose, and that it should not be diverted into other purposes.
Insurers response to the budget
The response of the insurers to the budget would also help to drive the industry, observers believed. They said the ability of operators to study the budget to ascertain where to take pragmatic steps to tap into it would help drive the industry to lofty heights.
Enforcement of mandatory insurances
The full enforcement of compulsory insurance laws such as motor third party policy, insurance of buildings and buildings under construction amongst others, would really help prop the the industry.
Observers believed there should be a colloboration between the industry and government's security authorities to ensure implimentation of the the laws.
Managing Director Riskguard-Africa Nigeria Limited Yemi Soladoye, said N1 trillion projection tied to the Market Developement and Restructuring Initiative (MDRI) programme failed due to delayed implimentation.
He noted that the programme was to commenced in 2009, but took off in 2011, therefore, leaving two years out of the the implimentation schedule.
"Most people are reading the strategy document and not relating it to when implimentation took off. If there is a projection that in year four, we will get N1 trillion and as we could see from the paper, we were to start in 2009, we had what we are to achieve in 2009, 2010, 2011 and 2012. So, N1 trillion is in year four which is 2012. If implimentation started in 2011, it will be a case of shifting the deliverables forward base on the difference on the ground between the strategy crafting and the implimentation," he said.
Adhering strictly to the no premium no cover policy
The policy on No Premium No Cover has been adjudged as one of the best initiative taken in recent time to sanitise and boost the industry's premium income.
NCRIB boss, Osijo, said what the present administration in National Insurance Commission (NAICOM) has done to bring sanity in the industry is a good thing in the right direction, adding that the idea of underwriters accusing brokers of non remittance of premium will now be a thing of the past with the introduction of no premium no cover.
NAICOM has said from January 1, this year, any underwritering firm that provides insurance cover without collecting the premium would be liable to a penalty of N500, 000 or lose its license.
It noted that insurance covers shall only be provided on a strict 'no premium no cover' basis, adding that only cover for which payment has been received, directlt by the insurer or indirectly through a duly licensed insurance broker, shall be recognised as income in the books of the insurer.
NAICOM said any insurer, who grants cover without having premium in advance or premium receipt notification from the relevant insurance broker, shall be liable to a penalty of N500, 000 in respect of each cover so granted , and in addition, may be a ground for suspension of of the license of the insurer.
Practising professionally
The important of professionalism cannot be gainsaid as high level of professionalism is considered a great treasure in business growth.
To this end, the Chartered Insurance Institute of Nigeria (CIIN) has threatened to withdraw its certificates from members who engages in unethical practices.
Its President, Adetimehin, said the i
nstitute reserves the right to withdraw its certificate from any holder, if it discovers any breach of the examination process, adding that further reason for such withdrawal of certificates may emanate from acts unbecoming of a holder of the Institute’s professional qualification.
"Permit me to reiterate the policy of Council in regarding all Certificates issued by the Institute as the Institute’s property which could be withdrawn from the holders if the Institute has good reasons to do so.
"Let me state categorically that the Institute reserves the right to withdraw its certificate from any holder, if it discovers any breach of the examination process. A further reason for such withdrawal of certificates may emanate from acts unbecoming of a holder of the Institute’s professional qualification,"he said.
Avioding unethical competition among brokers and underwriters
Curbing the unethical competition between underwriters and brokers, observers say would enhance the industry performance and build a last trust that would make the industry grow high premium income.
Over the years, underwriters and brokers have often engaged in premium war which observers believed has harmpered growth.
Nigerian Content Act
Proper implimentation of the Nigerian Content Act on insurance would open up the billion dollar oil and gas business to insurance operators, who have been empowered to underwrite 70 per cent risks in the oil and gas sector.
Insurance operators have called on oil and gas operators to lower the hurdles placed on their engagement. They believed their engagement would give them the opportunity to acquire more knowledge on oil and gas underwriting.
Insurance brokers have expressed worry on the enormous demand by the Nigerian National Petroleum Corporation (NNPC) in engaging them for its risks.
Our investigation revealed that NNPC has placed difficult hurdles to restrain the brokers from qualifying for risks allotted to local brokers by the Nigerian Content Policy. 34 brokers were engaged for the NNPC account in 2011, but the number was reduced to 14 last year and insurers have called for a rise in the number this year.
Infrastructural development
Operators believed that the development of infrastructure would reduce their overheads and enable them enhance their operations.
CIIN boss, Adetimehin, said: "We do hope the government would do a lot more this year to ensure better developement of right infrastructure in the area of power supply, energy and job creation. Because, these are basic elements that could propel economic performance."
Fight against corruption
Observers believed proper fight against corruption would help insurance attract positive image home and abroad.
They appeal to the pubic to join hands with government in the fight against corruption in the country. Stressing that corruption is a Cankerworm that can hardly be fought by government alone.
They noted that though the public look-up to government to set the pace, the citizenry should at their levels begin to operate on high integrity to ensure that they shun corruption, so that the nation's image and ranking before the rest of the world could be improved upon.
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