The National Insurance Commission (NAICOM) says the key pillar objectives of the ongoing insurance industry recapitalisation exercise earlier slated to be concluded on December 31, 2020 have been hindered by the coronavirus (COVID-19) pandemic.
Expectations on the key pillars including consolidation, foreign direct investment and attraction of local investors, which the insurance industry regulator said were to reposition the industry for new phase of growth, have suffered setback as a result of the novel virus that has affected Nigeria as well as global economy.
Sunday Thomas, commissioner for insurance/CEO, NAICOM, made the disclosure at the NAICOM-FITC Webinar Conference with the theme ‘Post-COVID-19: Impact on the Insurance Industry’.
Thomas said post pandemic, NAICOM would issue a new guideline for the recapitalisation, after considering all the scenarios.
“We are re-strategising and considering different scenarios, after which we will look at available models to see which one will be more appropriate and result oriented,” Thomas said.
“With what the economy is going through now, the game has changed. As far as the recapitalisation is concerned, those things that formed the pillar of the recapitalisation objectives have been hindered by reason of COVID-19 pandemic. The moment we are out of this situation, we will release new guideline for the recapitalisation exercise,” he said.
The insurance industry in Nigeria is in a recapitalisation exercise that requires operators to shore up their paid-up share capital to as much as 300 percent.
The exercise, which commenced on May 20, 2019 with a deadline of December 31, 2020, requires that life companies increase their paid-up share capital from N2 billion to N8 billion; general business from N3 billion to N10 billion; composite business from N5 billion to N18 billion; and reinsurance companies from N10 billion to N20 billion.
The webinar organised by FITC in partnership with NAICOM witnessed presentations from other industry players including Eddie Efekoha, managing director/CEO, Consolidated Hallmark Insurance plc, as moderator; Ganiyu Musa, managing director/CEO, Cornerstone Insurance plc; Shola Tinubu, managing director/CEO, SCIB Insurance Limited; Rashidat Adebisi, executive director, AXA Mansard Insurance plc, and Chizor Malize, CEO of FITC, as the host.
Thomas also spoke of the importance of a stronger and more flexible insurance legislation, stating that this has been a major drawback to the effective supervision of the industry.
According to him, efforts would be doubled to ensure the coming on board of a new insurance law to enable effective policy direction for the industry.
The players who also shared their opinions on the COVID-19 era and how insurance will remain relevant emphasised a new work culture that has emerged as result of the lockdown, which now sees insurers as well as other businesses provide services from remote locations, and with help of technology.
According to them, insurers would have to embrace more technology and innovation as well as flexibility to align with the new expectations of the consumer.
For underwriters, they agreed that they must rise to the challenge of providing end-to-end service from the point of policy issue to claims payment, as that is the way to go.
The brokers, for whom the COVID-19 era has limited their face-to-face contact with clients, they would have to also embrace technology to intermediate for consumers going into the future.
They speakers also brought to the fore the importance of new product developments to meet the needs of the consumer, as the pandemic has thrown up many challenges for consumers and the insuring public, which will also mean opportunities for the industry.
