The National Insurance Commission has outlined a comprehensive plan to assist the market grow its premium from the 2008 position of N179.3billion to N1.1trillion in three years. The blueprint has as its main drivers, the enforcement of mandatory insurances in the relevant laws affecting insurance.
Out of a total industry capital base of N550billion in 2008, only N179billion was generated as premium indicating gross under utilisation of capital. But NAICOM says it is its responsibility to develop the market to optimal capacity.
Consequently, through its Market Development and Restructuring Initiative, the Commission says it will collaborate with insurance companies to harness those insurance compulsory by law.
Commissioner for Insurance, Mr Fola Daniel who unveiled the plan to insurance correspondents at a three day retreat in Benin, the Edo State capital said the plan represents a minimum estimate derivable from implementation of 6 out of the 13 compulsory insurances.
â€œWhat my colleagues and I at NAICOM have done with the MDRI initiative is to look at ways the industry could leverage on existing laws to plug many of the leakages in terms of insurance premium,â€ he stated adding, â€œwe believe if the implementation is as envisaged, there is no reason why the premium income benchmark of N6trillion by 2020 estimated in the initiative cannot be surpassed by the industry.â€
To leapfrog the industry current performance by over 300 per cent by 2012 require hard work, says Mr Sunday Thomas, the Director of the Commissionâ€™s Inspection Directorate noting that efficiency is core to achieving the target.
Thomas spoke on Achieving The Trillion Naira Market with MDRI at the event weekend in Benin.Â He said the current broker-led channel of distribution cannot deliver on mandate and thus the need to restructure the distribution channel to strengthen agency operations throughout the country.
If well implemented, insurers will ride on the success of the plan to work their way through micro insurance.
Thomas also said that elimination of fake insurances is vital to achieving the set targets but emphatically stated that it can be achieved with full cooperation of players and relevant agencies of government.
By the time the target is achieved, consumer recognition in insurance would have boosted to a higher level. In the same vein, insurance contribution to GDP would rise to 3 per cent from its current level of 0.7 per cent. It is also envisaged that insurance density would have grown exponentially to N7500 from its existing position of N1200 and thereby strengthen products distribution channels.
Aside skills and technology to deliver on target, Thomas said a disciplined and highly skilled agency network need to be developed on a continuos basis.Â But he was certain that the desire of â€œthe Commission to lead a trillion naira market by the year 2012 is doable with the commitment and cooperation of all stakeholders.â€
â€œThis is the least we must attain to take the driving seat in the financial intermediation in Nigeria and be in the forefront among the emerging economies in the world,â€ he affirmed.