BY ROSEMARY ONUOHA

The insurance industry in Nigeria is working hard to take its rightful place in the economy; as a result, all efforts are geared towards making the industry contribute meaningfully to the Gross Domestic Product (GDP) of the country.

Nigeria’s gross premium per capita of $8.9 is low when compared to $1,072, $29.9 and $49.3 for South Africa, Kenya and Ghana, respectively. Insurance penetration as a percentage of GDP is 0.43 per cent; and only an estimated 6 per cent of the population has any form of insurance.

Before 1992, the insurance industry was being supervised by the National Insurance Supervisory Board.  Initially, the industry was being supervised by the Insurance Department in the Federal Ministry of Trade, headed by the Registrar of Insurance.  And from inception, NAICOM has been reporting to the Federal Ministry of Finance.

This is quite unlike other regulators in the country’s finance market including the apex bank, Central Bank of Nigeria and the 10 years old National Pension Commission (PenCom).

In recognition of this challenge, the four insurance Commissioners that the country had have worked hard and recorded several positives in raising the stakes of the industry.

It is therefore pertinent that the tenures of all commissioners be reviewed here.

Okwor

Chief Eugene Okwor, who was appointed as Registrar of Insurance, Federal Ministry of Trade, Lagos in 1974 and later appointed Director of Insurance in 1977, became the pioneer Commissioner for Insurance, National Insurance Supervisory Board, and the body which metamorphosed into the National Insurance Commission (NAICOM).  He served in this capacity from 1993 to 1997 when he voluntarily retired.

In this capacity Okwor supervised the carving out of the Insurance Department at the Federal Ministry of Finance and subsequently establishing the National Insurance Commission (NAICOM) as the regulator for insurance industry.

Bailey

The seven and half years tenure of Chief Oladipo Bailey was spent mostly tearing down bad structural defects and setting up new structures that formed the bedrock of what achievements that the insurance industry has recorded in the last 10 years.

At different times, Bailey confronted recalcitrant operators, particularly the insurance brokers’ fraternity that held other operators hostage and would not want any interference from any regulator who want the situation changed.

The greatest achievement of Bailey was the protection of the insurance industry from predation by banks and other hawks in the finance sector.  He warned and lobbied government to stop banks, under the guise of universal banking, from taking over insurance business, warning that it would cause serious crisis in the economy.

Universal banking policy was introduced to enable financial institutions to provide all classes of financial services under one platform, with the insurance industry as the target.  His agitation has been rewarded with the reversal of universal banking by the Central Bank a few years back.

Bailey also supervised the upward review of the capital base of insurance companies as prescribed by the Insurance Act, 1997; from N20 million, N50 million for life and special risks business to N150 million, N200 million respectively.  The capital base for composite and reinsurance companies were raised from N90 million to N350 million at the same time.  This inadequacy in this capitalisation led to its upward review during the tenure of his successor.

Chukwulozie

Chukwulozie supervised the last recapitalisation exercise in the industry, when in 1997, the Federal Government mandated reinsurance companies to raise their capital base from N350 million to N10 billion, while life and general insurers were asked to raise theirs from N150 million to N2 billion and N200 million to N3 billion respectively.

At the end of the exercise, the capital base of the industry was raised from a paltry N2 billion or thereabout to over N200 billion.  The capacity of the industry to take on high ticket risks, meet claims obligations and train its workforce improved significantly at the end of this exercise.