The National Insurance Commission (NAICOM) said that despite macroeconomic challenges that have plagued businesses in Nigeria, the insurance sector recorded an annual growth rate of 6.2% at the end of March 2022.
The commission also said that the market size of the sector also grew by 15% over the same period, thus standing out as one of the fastest sector asset expansions in Nigeria during the period.
NAICOM Deputy Technical Commissioner for Insurance, Sabiu Abubakar, who said this during the second edition of the Chartered Insurance Institute of Nigeria (CIIN) Business Outlook 2022 held in Lagos, also said that the insurance industry held a commendable average market retention of 73.3 percent. cent in the first quarter of 2022.
Abubakar said that in line with this achievement, NAICOM has strengthened its regulatory oversight and implored operators to settle genuine grievances within a reasonable time frame to ensure full compliance with their obligations.
He however regretted that despite the above signs of improvement, insurance penetration in Nigeria remained low at 0.5% (calculated as gross premium income as a percentage of gross domestic product), which , according to him, was the weakest in Africa.
To deepen penetration, Abubakar said the Commission has embarked on a number of initiatives to drive the future growth of the industry.
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Some of the initiatives launched by the Commission, he said, include the Market Development and Restructuring Initiative (MDRI)/compulsory insurance; Collaboration with state governments; Working group on compulsory insurance; Financial inclusion and microinsurance.
Others according to Abubakar are Takaful Insurance; bancassurance; Guideline on Government Property Insurance; regulatory innovations; Web Aggregators Guideline; Sandbox Directive and Local Content Regulations.
Abubakar said insurance regulation and supervision was the foundation of national economic development, stressing that he believed NAICOM’s regulatory reforms and initiatives would have a positive impact on the insurance industry if carried out and the sector would experience considerable development and growth.
He implored insurance practitioners to continue to complain and support the commission’s efforts in developing the sector.
The NAICOM Deputy Commissioner said the Commission is preparing for the full implementation of risk-based capital (RBC) in 2023 or 2024.
Abubakar said the Commission had selected eight more companies for the start of the RBS review this August.
He said that the Commission has started training its staff on venture capital (RBC) in collaboration with FSD, Africa.
He said that while hoping for the full implementation of risk-based supervision, insurance operators need to proceed with capacity building of their workforce on RBC, as the involvement of operators on the framework RBC was very demanding in terms of human technical capacity and other resources.