ROSEMARY ONUOHA

The National Insurance Commission, NAICOM, has charged insurance brokers in the country to avail themselves of the opportunities in the Local Content Act and carve a niche for themselves.

Commissioner for Insurance, Mr. Fola Daniel, who gave the charge, stated that the Local Content Act has given brokers a huge leverage as well as a rare opportunity to participate in the oil and gas sector.

Daniel, who made the appeal at the 2011 National Insurance Conference, organised by the Nigerian Council of Registered Insurance Brokers, NCRIB, reiterated that the Nigerian Oil and Gas Industry Content Development Act 2010, has given insurance brokers in Nigeria a leverage, adding, “It is significant that by section 49 of the Act, all oil and gas insurance businesses in Nigeria must be transacted through a Nigerian registered insurance broker.

“This is indeed a rare opportunity. However, brokers require technical, as well as Information Technology (IT) capacities to take effective advantage of the provision.”

Towards developing the needed capacities, Daniel advised that building strategic alliance with some established foreign insurance brokers may be helpful in addition to deliberate efforts to develop human and technical capacities.

The Insurance Commissioner, however, regretted that brokers have not brought sufficient energy into the Market Development and Restructuring Initiative, MDRI of NAICOM.

Daniel stressed the need for a more energetic and proactive collaboration from brokers than is being seen at the moment, adding that there is the need for the brokers, and indeed the insurance industry to reflect on how to tap into the vast insurance opportunities that currently abound in the country, as these were yet to be fully exploited.

Daniel noted that in the past two years, the Commission has been under the burden of developing and expanding the insurance market and by extension, increasing the insurance sector’s contribution to the nation’s Gross Domestic Product, GDP, and part of the efforts is the introduction of the MDRI in 2009.

He said, “For emphasis, one of the key objectives of the MDRI is continuous availability of genuine insurance products at the grassroots. Naturally, fake insurance products will thrive in the absence of genuine.

“We therefore need more brokers and agents at the grassroots. Towards achieving this objective, the Commission has tended to be more liberal with licensing of brokers and agents. Notwithstanding, it appears that brokers have continued to be concentrated only in our major commercial cities.

“This trend must change if we are to truly develop the insurance industry in Nigeria. Beyond MDRI, brokers now have the opportunity even to explore Micro and Takaful insurances. This is important especially in the face of the renewed efforts by world governments towards financial inclusiveness.”

The insurance commissioner stated that the government has demonstrated renewed commitment for developing the agricultural sector through the launching of the Nigerian Incentive Based Risk Sharing for Agricultural Lending, NIRSAL project currently coordinated by the CBN.

“The insurance element in the project is indeed a big plus for the insurance industry. A necessary fallout of this development has been the proposal for deregulating agricultural insurance in Nigeria. At the moment it seems that the Nigerian Agricultural Insurance Corporation, NAIC Act, has conferred on NAIC the exclusive right to insure all subsidised agricultural risks. However, opportunities still abound in the areas of commercial unsubsidised agricultural risks.”

Daniel noted that going forward, the Commission shall give appropriate consideration to underwriters desiring to underwrite’ agricultural insurance under the relevant provisions of the law, noting that existing underwriters are well advised to take advantage of the capacity already accumulated by NAIC. As a means of attaining sufficient capacity for large risks, the Commission shall actively support pool arrangements, co-insurance