The recently announced risk based capital requirements prescribed by the National Insurance Commission (NAICOM) for the insurance industry is viewed broadly as a welcome development.
Speaking during an interview with journalists in Lagos recently Wole Oshin, group managing director/CEO of Custodian Investment Plc stated that Custodian views the development as “a catalyst that will propel the group to strengthen its balance sheet and risk management tools’
“We anticipated this day would come and are prepared to remain a leading player, able to provide the requisite cover and protection to a broad spectrum of the market while remaining professionally in tune with global best practices in risk-based underwriting and investment,” Oshin said.
He said the customers and the general insuring public would be the greatest beneficiaries of this development, as they would be better protected and can rest assured that their insurer is able to provide them with timely and adequate succour whenever any insured risk crystalizes.
Oshin, who confirmed that Custodian would continue to retain its leading role in the top tier of the industry, added that the insurance business is quite significant in the group’s business portfolio and as such they monitor events in the sector closely.
He further said the group’s shareholders funds and assets under management (AUM) is in excess of N35 billion and N300 billion respectively, and the group ranks high amongst companies on the Nigerian Stock Exchange’s Other Financial Services Sector.
According to him, it as a step in the right direction and can be said to be consistent with global best practice. He stated further that the entire insuring landscape would be the better for it as the big corporations would have greater confidence in the industry players’ capacity to honour obligations whenever the need arises.
He confirmed that Custodian has more than adequate solvency capital to underwrite special risks such as Aviation and Oil & gas risks even with the new requirements.
Oshin also commended the regulator for its commitment towards strengthening the industry and bringing it to global standards. “With such actions, the country’s Insurance industry is the better for it as it will ultimately rank favorably amongst top markets in developing economies,” he said.
According to Oshin, as companies brace up for the new system, there is a need to determine early where an operator would want to play in the three-tier system; adding that the beauty of the system is that it is not stagnant as it allows for mobility within the tiers depending on capital adequacy and appetite.
He stated further that the new initiative would ensure that all companies participate and no one is left out as organizations have the leeway to take decisions on where to play based on available capital and allowable risk threshold within the legal and regulatory framework of the insurance industry.
