2015 is an election year and it is expected that economic activities will be slow because politicians will concentrate more on politicking than on the economy. However, stakeholders in the insurance sector are hopeful that it will turn out to be a positive year for the sector.
For Director General of the Nigerian Insurers Association, NIA, Mr. Sunday Thomas, the forecast for the insurance industry in 2015 will not be accurate without a review of activities in 2014 because there were policy initiatives as well as challenges that will influence what will happen in 2015.
Thomas said that a key policy initiative of the previous year which will shape activities in 2015 is the ‘no premium, no cover’ of the National Insurance Commission, NAICOM. Having gone through the teething challenges that accompanied the implementation of the ‘no premium, no cover’, insurers are now used to it and have settled down to embrace the policy which will shape the books of insurers positively going forward, Thomas said.
Thomas also said that the enforcement drive of the regulator, the National Insurance Commission, NAICOM, to regulate the sector in accordance with international best practices will add value to the system.
“These and some other issues which insurance operators had to cope with in the market in 2014, will be stabilised in 2015 because they are beginning to overcome most of them now,” Thomas stated.
On the NIA side, Thomas said that the Association will commence the marine module of the Nigerian Insurance Industry Database, NIID in 2015. Recall that the motor module of the NIID had been in place since 2012 and it is a platform where all genuine motor insurance are stored.
Thomas said that because 2015 is an election year, things might slow down a little because governments at all levels will have to find their feet after the election. On the issue of declining oil price, Thomas said that there will be efforts by government to put safeguards in place to guard against adverse effects of declining oil price.
“Due to the fact that 2015 is an election year, there is the likelihood of slowdown in implementation of policy initiatives. Also after the election, it will take the government time to organise itself. So the first half of 2015 is likely to be slow which could slow down purchase of insurance products and services. Also, passing the budget into law could be delayed and the government being the largest spender might slow down in releasing money into the system. Also, foreign investors could be hesitant in committing their investments into the economy if the budget is delayed,” Thomas said.
On his part, Chairman of NIA and Managing Director of Linkage Assurance Plc, Mr. Godwin Wiggle, said that insurers are optimistic that 2015 will be better judging by the economic growth in recent times.
According to Wiggle, “2015 is an election year, however; we are hopeful that things will be better. In terms of the ‘no premium, no cover,’ we will begin to benefit from the policy because we now collect premium on the go. So now, we are writing less business with more cash unlike in the past when we are writing more business with less cash.”
For Managing Director of Sovereign Trust Insurance Plc, Mr. Wale Onaolapo, 2015 is expected to be positive in terms of insurance contribution to the Gross Domestic Product, GDP. He said that all along insurance contribution to GDP is very low so there is a lot of room for improvement for insurers in 2015.
“Our economy is the biggest in Africa and there is still a lot of ground for insurers to cover. So for insurers that know their onions, 2015 is another opportunity for them to capitalise on the huge opportunities staring us in the face and cue into the growth trajectory of the economy. The insurance public has been waiting for this and it is time we meet their need,” Onaolapo stated.
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