Insurance

NAICOM pushes strategic innovations to increase penetration

by Modestus Anaesoronye

October 11, 2017 | 12:35 am
  |     |     |   Start Conversation

To increase insurance penetration and enhance the sectors contribution to the country’s GDP, the National Insurance Commission (NAICOM) is looking at innovative strategies that companies in the industry can take advantage of to reach the unreached populace.

NAICOM believes that companies should move beyond their comfort zones and implement innovative models that have helped other markets in advanced economies to increase penetration and achieve growth.

At a two days Seminar for Insurance Correspondence held in Kaduna, Kaduna State, the Commission drawing from experience operational in other markets, challenged companies to look at add-on opportunities in existing products and offerings to increase penetration.

Mohammed Kari, commissioner for Insurance and CEO of NAICOM said in the second phase of its Market Development and Restructuring Initiative (MDRI), the commission plans to partner with the State governors to make sure compulsory insurances are implemented in across the country.

Kari, while speaking during a courtesy visit to the Kaduna State Government noted that such partnership will allow the commission to set up its branch in Kaduna, at a time it is considering to open more new branches across the country.

To him, such partnership will not only improve the Internally Generated Revenue (IGR) of the States, it would also generate employment, while transferring the burden of compensating the victim of accidents and catastrophes from the government to the insurance companies.

Pius Agbola, director, Authorisation and Policy, NAICOM speaking on the topic ‘Reaching the Unreached: Enhancing Access to Insurance In Nigeria: Concepts, Challenges and Way forward”, said that though there are several reasons hindering insurance penetration, but critical amongst them is its lack of availability to those who need them. 

Agbola said that the distance of the insurance providers to the rural areas or the unreached is a common barrier/challenge facing the industry.

According to him, companies are concentrated in the cities doing mostly corporate and public sector businesses, with almost non presence in the rural areas.   

He further stated that NAICOM, having noted these gaps, has started developing appropriate frame work/guidelines in many areas such as NGO/Community Based/Trade Associations, Microfinance Banks, Independent Agents, and some of these has been exposed for stakeholders input.

He stated that appropriate and sustainable distribution channels that recognize these groups are necessary. “The importance of appropriate technology to drive micro insurance and to reach the unreached cannot be over-emphasised”

While the operators are urged to embrace modern technology at all front of their operation (front office, back office, process flow, etc) to drive growth, the regulatory and supervisory frame work needs to be friendly and adaptable to technology innovation/changes.

“Appropriate collaboration by the operators and regulators with the distribution channel institutions are very imperative, Agbola stated.

Bareneka Thompson, director, Inspectorate of the Commission, speaking on the topic ‘Innovation and Healthy Competition as Engine of Growth for the Nigerian Insurance Industry”, emphasised on the need for companies to compete in terms of innovations, rather than pricing.

According to him, there are a lot of add-on that companies could bring in to the business that will make a difference between them and other competitors.

He said that innovations in terms of product development, service delivery and value additions, will increase penetration and bring about the needed growth in the industry.

Sunday Thomas, deputy commissioner for Insurance, Technical said NAICOM has set in motion regulatory priorities for 2017 to 2020, which he said embodies the different phases of implementation of the MDRI.

A key plank of the regulatory priority is the plan by the Commission to utilise the machinery of the States to drive implementation of compulsory insurances.

According to him, arrangements were being made to meet the Governor’s Forum, stating that it is a partnership that is already gaining the support of the states.

Another priority of the plan includes tackling the issue of unpaid claims in the industry.

Thomas stated that the Commission is making arrangement to take unpaid claims from the statutory deposits of insurance companies, as provided under the law.

Also part of it is the implementation of Risk Based Capital in the industry, which the pilot scheme he said, will commence soon. There is also the issue of information technology, as well as training for directors of insurance companies.

Modestus  Anaesoronye

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by Modestus Anaesoronye

October 11, 2017 | 12:35 am
  |     |     |   Start Conversation

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