80% of insurance firms have not paid dividends for five years - NAICOM

Daniel

Chuks Udo Okonta

Shareholders of insurance firms have continued to count their losses, as the National Insurance Commission (NAICOM) said 80 per cent of the companies have failed to pay dividends in the past three to five years.

The Commissioner for Insurance Daniel, who disclosed this at a forum organised by the Nigerian Insurers Association (NIA) in Lagos, said insurers have continued to take Capital Market crash of 2009/2010 as justification for the poor turn of event, adding that whereas other sectors have achieved reasonable recovery the industry has not shown great signs of recovery.

He said: “Suffice it to say that the growth of the industry has remained constrained by the near total absence of risk management practice and appropriate product pricing amongst other issues plaguing the industry. The consequence is massive loss of premium and wealth to stakeholder.

“No doubt therefore, that the price of listed insurance companies rarely record market gain while shareholders have not received dividends in the past three to five years in 80 per cent of member companies.”

“The Commission had chosen to show some understanding against the backdrop of massive investment losses following the Capital Market crash of 2009/2010.  Whereas other sectors have achieved reasonable recovery, Insurers and NAICOM may no longer be able to invoke the excuses of the market crash as justification for the poor turn of event.”

Daniel noted that the commission will henceforth, have zero tolerance for solvency gaps in the ensuing year in the interest of the insuring public and for the avoidance of exposure of NAICOM to regulatory risk.