By Patience Saghana
The federal government has given insurance company in the company a deadline of December 31st 2015 to achieve a single west African insurance market.
Professor Joe Irukwu, Chairman Insurance Law Review Committee confirmed this to Vanguard in Abuja last week adding thatÂ insurance operators are even looking beyond a single sub_regional market to a single African market
He said, “The desire of most of us is to have a single insurance market like the European Union countries have done”
ThisÂ will enable insurance companies in NigeriaÂ to go to Ghana , Kenya , Gambia , Liberia , Sierra Leone etc and beyond to set up offices without any inhibition”
Irukwu said though he supports the idea of offshore business but he is against a situation whereby the home market is yet to be developed and companies are going offshore.
“We do not have a national insurance culture and that is our greatest problem”Prof Irukwu who spoke the minds of practitioners in the sector saidÂ that what he objected to is the idea of insurance companies that are not doing well in their home countryÂ goingÂ outside the nation in the name of offshore and therebyÂ humiliatingÂ Â the insuranceÂ Â industry in Nigeria.
Meanwhile the insurance Industry has as a 10 year deadline to complete eleven key programmes geared towards making the sector a major hub in the global insurance business.
The eleven key programmes that the insurance sector have to complete from 2010 to 2019 are; Review of insurance laws and regulations by December 31, 2010; Evolvement of international best practice of corporate governance principles and establishment of reliable statistics and IT database by December 31, 2011; Solving of image problem and promotion of local risk retentionÂ by December 2012.
Others include; Protection of policyholders;Â Building of IT content by December 2013; Widening of avenues for insurance consumers to seek redress; Reduction of insurance gab from 95 percent to 30 percent;Â And the promotion of single insurance market by December 2015Â whilst the sector has a deadline of being the 15th largest insurance market by December 2019.
Mr Fola Daniel, Commissioner for Insurance explained that the need for the change in the insurance industry is necessitated by theÂ Financial Sector Strategies (FSS 2020) which requires the accomplishment of these initiatives.
He further explained that, that was why the commission launched the Market Development Initiative project to facilitate the reduction of insurance gab from 95 percent to 30 percent,Â protect policyholders and grow the market to become the 15 best market in the world in terms of premium income by 2020Â andÂ employment generation in the country.
NAICOMÂ believe that ifÂ the MDRI programmes areÂ implemented as planned, there would be no reason or whatsoever why the sector’s premium income benchmark of N6trillion by 2020 cannot be achieved byÂ The MDRI is part of efforts being made by NAICOM to improve on the fortunes of the nation’s insurance industry. If the project is implemented as envisaged, the insurance industry’s gross premium income would rise beyond a N6 trillion market by the year 2020.
The MDRI project is meant to help the operators and regulator alike grow the industry to a trillion Naira market by exploring ways the industry could leverage on existing laws to plug many of the leakages in terms of insurance premium.
On a specific note, the MDRI project is aimed at addressing the issues of compulsory insurance products, insurance agency system, fake insurance institutions and risk based supervision.
Already, 16 different insurance products have at various times been made mandatory by various statutes directly or indirectly. However, only six of these were very prominent and capable of generating about 55 percent of the industry premium income as envisaged under this initiative.
According to NAICOM “The MDRI project has been structured as a medium term plan (2009 _ 2012) of installing the first phase of the necessary reforms in the areas of industry capacity, market efficiency and consumer protection in the Nigeria insurance market”.