By Rosemary Onuoha
CHIEF Executives of insurance firms have identified consolidation, cybercrime cover, the insurance industry rebranding project, and enforcement of compulsory insurances nationwide amongst others as are factors that will influence the direction of the subsector 2018.
In his outlook for this year, Managing Director of Mutual Benefits Assurance Plc, Mr. Segun Omosehin told Financial Vanguard that a major event that will impact the industry is the rebranding project scheduled to commence in the first quarter. It will be recalled that the industry designed an awareness campaign programme aimed enhancing public confidence in the industry.
Omosehin said, “The rebranding campaign is a joint effort and collaboration by all players in the industry. The essence is to clear some misgivings as to the image of the industry. We are hoping this will yield some positive results.”
Chief Operating Officer of Aiico Insurance Plc, Mr. Babatunde Fajemirokun said that this year, the insurance sector could likely witness some possible consolidation as the Risked Based Supervision, RBS, comes into full force.
He said, “The RBS will lead to better solvent companies and help in repricing of risks, profitability, and even planning for dividend payment in the future. With better solvent companies, insurers will be able to meet the requirements of shareholders and investors a lot better.”
Chief Compliance Officer of Leadway Assurance Company Limited, Mr. Temilolu Aduloju said that issues of capital inadequacy, solvency margin have been plaguing operators in the sector. In essence, to beef up capital, consolidation in the form of mergers and acquisition could suffice.
According to the National Insurance Commission, NAICOM, with RBS, companies will not be allowed to transact in business above their capital.
Enforcement of compulsory insurances
Commissioner for Insurance, Mr. Mohammed Kari said that since last year, NAICOM has been putting machineries in place to commence full enforcement of compulsory insurances all over the country. It will be recalled that the regulator last year visited some state governments to orientate them on the need to implement the compulsory insurances in their states. Accordingly, in 2018, NAICOM said that it could kick-start enforcement of the policy.
Aduloju said, “As Nigeria advances in utilization of cyberspace technology, cybercrime is bound to increase. The culture of slow adoption of technology by corporate entities is fast edging away leading to speedy ICT implementation. In essence, the Nigerian insurance industry is gearing up to create insurance covers for cybercrime as corporate outfits are constantly at risk of cyber system hacking.”
Challenges that will persist
According to Aduloju, despite the expectations for this year, the sector will continue to grapple with challenges of multiple regulation, unethical competition and rate-cutting.