Insurers deploy over N600b for business

Insurers deploy over N600b for business

Chuks Udo Okonta

Insurers deploy over N600billion in pursuit of business the Commissioner for Insurance Fola Daniel, has said.

He told Inspen that with the enormous opportunities in the economy, the industry has the potential to achieve N2trillion income. He said the operators are under trading with the cash at their deposer stressing that the industry after five years of recapitalisation ought to have been a model to insurers across African and other part of the globe.

He said: “The issue of how close or far the industry is towards the achievement of the target would not have a straight answer. I think what we need to do is really to go back to the fundamental of the figures behind that target we gave ourselves. On the basis of what we have in the nation, should we really be talking of N1trillion income? Five years after recapitalisation, should we not be talking on something more than N1 trillion? If we deploy N500billion to N600billion to do business, should not be looking at doubling that amount of money? Or even making it triple? I think we have the wherewithal to generate income in excess of N1trillion.

“How much of it we have gotten, I cannot say, because the 2011 account has just reached the commission, I do believe that by the time we get most of the accounts, we would be able to say; yes this is where we are exactly. I think the underlining thing should be, do insurers have the capacity? Do we have a business environment that can support the premium income of N1 trillion or even N2 trillion? And the answer is yes.”

He noted that the Insurance industry is assiduously working to net over N100billion from motor insurance, adding that going by the statistics provided by the Federal Road Safety Commission (FRSC) which put vehicles in the country at over 10 million, the industry through its initiatives will net over N100billion from that class of insurance.

Daniel said the industry also hope to achieve gross premium income of N1.10 trillion, create additional 250,000 new jobs, make substantial contribution into the Fire Service maintenance fund as provided in section 65(5) of the Insurance Act, attain3.0 per cent insurance contribution to the nation’s Gross Domestic Product (GDP) and attain premium per capita contribution of N7, 500 from N1, 200.

He said if available statistics are anything to go by; the MDRI’s target of N2.5 trillion gross industry premium incomes by the end of 2015 and N6 trillion by the end of 2021 is on course.

Daniel said in terms of average growth rate, the industry has recorded 36.0 per cent for 2007-2009 up from 11.67 per cent for 2004-2006, adding that although complete figures for last year are not yet available, there are strong indications from what is available that the industry will record significant increase.

“The insurance sector in Nigeria has just emerged from the dormant stage where despite a huge population advantage; it failed to achieve an appreciable growth in 35 years. Suffice to say however, that in 2008 the sector entered into its early growth years and has been making steady progress,” he said.

He said the National Insurance Commission (NAICOM) will continue to adopt developmental strategies to move the industry forward and that errant operators will be sanctioned to improve the industry’s image.