By Rosemary Iwunze
As the insuring public increasingly becomes aware of their right to make claims when their insured risks crystallize, growth in insurance industry total liabilities has been surpassing growth in assets in the last two years.
Vanguard findings show that while industry total assets increased by 11.8 per cent to N2.148 trillion in 2021 from N1.921 trillion in 2020, industry total liabilities went up by 13.9 per cent to N1.551 trillion in 2021 from N1.361 trillion in 2020.
Meanwhile, total assets had increased by 27.2 per cent to N1.921 trillion in 2020 from N1.510 trillion in 2019 while total liabilities skyrocketed by 35.3 per cent to N1.361 from N1.006 trillion.
Insurers were forced to commence recapitalisation moves to beef up their capital following the introduction of the recapitalisation mandate by the National Insurance Commission, NAICOM, in 2020.
However, the recapitalisation exercise which should have ended in September 2021 was halted by litigation from aggrieved stakeholders.
Accordingly, NAICOM introduced the Risk Based Supervision, RBS, last year.
Speaking on the prospects of the RBS, Commissioner for Insurance, Mr. Sunday Thomas, noted that RBS has become a reality with the take off.
He said: “The supervisor is expected to assess systemic risk that affects the industry as a whole, and then analyse the level of risk specific to each firm. It takes a holistic approach, and studies the business units within the enterprise, each of which may carry varying levels of risk.
“The relevant persons have been trained, the necessary skills have been acquired and the instruments that will enable implement have been development, what is left is to do the finishing touches for the take off.”