Insurance 2010: Operators hinge growth on Motor, Oil & Gas and Compulsory insurance
By Patience Sghana
Insurance operators have expressed optimism for increased growth in insurance premium saying motor insurance, oil and gas insurance and the six compulsory insurance products are the factors that would drive sectoral growth in 2010
The six compulsory insurance products are Third Party Motor Insurance (Section 68 of Insurance Act 2003); Builders Liability (Section 64 of Insurance Act 2003); and the Occupiers’ Liability (Section 65 of Insurance Act 2003). Others are the Workmen’s’ Compensation of Section 40 of Workmen’s’ Compensation Act 1897; Health Care Professional Indemnity of Section 45 of the Nigerian Health Insurance Scheme 1995 and the statutory group life of Section 3(2) and Section 9(3) of Pension Reform Act 2004.
The National Insurance Commission (NAICOM) has expressed determination to enforce the six products from this year, through its new strategy, the Market Development Initiative Restructuring programme.
“I think 2010 will be very challenging for the Insurance industry”, Mr Femi Okunniyi, Managing Director of Goldlink Insurance Plc said in his preview of the year.
He said though the budget has been laid before the National Assembly, it’s yet to be approved. Our economy is far from recovery since little or nothing was done by the government. The first half of the year will be slow as a result of our political situation except a solution comes our way on the health of Mr. President.
The Goldlink Insurance boss said, “There is likelihood of growth on total premium generation due to the implementation of Compulsory Insurances introduced by government through the National Insurance Commission. The major income will still come from automobile insurances and group life being compulsory insurances. The oil and gas insurance will not be left behind if government is able to continue on the implementation of local content policy”.
Mr Tope Smart, Chief Executive Officer of Nem Insurance Plc expressed belief that the Nigerian economy will pick up in 2010, adding that it will also rob off on the nation’s insurance industry.
Smart strongly believe that though motor still retaining its number one position in driving the market premium growth aside oil and gas, he said this year’s motor insurance premium will triple owing to the consciousness of the Nigeria populace on the need to insure coupled with the increasing confidence of the insuring public on the sector.
The Nem Insurance boss also expressed hope that there will be an increase in the volume of oil and gas businesses far more than what the sector had witnesses in the last two years.
Mr Fatai Lawal, Managing Director of Sterling Assurance Company opine that 2010 offers a ray of opportunity for growth and further development of the insurance Industry.
Lawal notes that most individuals or businesses can no longer afford the luxuries of replacing stolen, damaged or lost items from their own internal resources in view of the economic meltdown as insurance offers a buffer in the event of unforeseen contingencies.
He said “With the on_going sanitization effort by the supervisory authority, NAICOM, ably led by the Commissioner, Mr. Fola Daniel, insurance business is expected to be done with some level of dignity in 2010″.
The efforts of key players and the Chartered Insurance Institute of Nigeria (CIIN) in creating public awareness for the insurance business will go a long way in improving market penetration and boosting the turnover of insurance companies, Lawal optimises.
He adds that the on_going cooperation among insurance operators regarding pricing and payment pattern will help in improving the balance sheet position of most companies.
He notes that Government will do the insurance industry a lot of good if the implementation of increase in local content from the 40percent to 70 percent is achieved. This he said will increase more participation of the insurance industry in the oil and energy business, adding that increase in government patronage will generate more production for insurance Companies.
