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Another reform of insurance industry imminent, Muhtar

By Patience Saghana
INSURANCE and reinsurance companies may begin from now to prepare their companies for another reform which according to the Minister of Finance, Dr Mansur Muhtar, is imminent.

Dr Muhtar has stated that the nation’s insurance industry would soon experience another reform  that would boost the importance of insurance sector in the development of the nation.

According to him, “Insurance industry will soon witness another reform.  Insurance business is of significant importance for economic development than to allow unwholesome practices to deter its growth”.

The Minister of Finance dropped the hint at the public presentation of BGL Research and Intelligence publications on Getting banks to lend again in Abuja  recently.

Dr Muhtar remarked that the BGL’s report provides the country fresh perspective and insight for the private sector and also make governance more transparent.

He noted that the reform in the banking sector was a prize to be paid for the nation to attain economic stability through a sound banking system while he said that government’s searchlight would soon beam towards the nation’s insurance sector to bring sanity to the industry.

The finance minister who admitted that the federal government had commenced the process of sanitizing the insurance sector further, noted that the huge pool of resources in the insurance sector should be protected by government in the interest of the insuring public and the nation’s economy at large.

Mr Albert Okumagba, Group Managing Director of BGL Plc bemoaned the state of the nation’s insurance industry, stating that studies had shown that of the estimated 20 million people in formal and informal sector across Nigeria, less than one million has personal insurance policies in spite of the huge population of 150milion people in the country.

He noted with disappointment the low insurance penetration of insurance in the country worst still, when the sector has is compared with  insurance industry in other Africa countries..

According to him, “Nigerian insurance companies are accurately aware of their need to grow their contribution to the GDP as well as assure a leadership role in the African market’’.

He however, identified some of the challenges facing insurance companies in country as  market penetration; improved product distribution; local content policy especially on oil and gas; prompt claim settlement; competent management; corporate governance; innovative products; adequate technology and the competitive structure of the industry which, he said that was further compounded by the large number of insurance brokers>

He stated, “The success of the Nigerian insurance industry to a large extent is dependent on resolution of these identified challenges particularly the enforcement of compulsory insurance’’.

Okumagba stated that  BGL’s strengths, capability and core competences are in the areas of economic research, sectoral analysis as well as equities and fixed income research.

The BGL boss affirmed that company’s desire to continually strive to provide extensive and innovative research with a balanced approach to both country and sectors, ‘as well as our intent to identify and analyze government policies, financial information, strategic issues and trends that affect companies, industries, sectors, and markets on a regional and global scale has formed the premise and basis of this publication launch’, he stated.


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