By Favour Nnabugwu

THE National Insurance Commission (NAICOM) will take action against non-compliance of insurance companies to prune their management expenses as 50 companies spent N91billion and N95 billion in 2015 and 2016 respectively, bringing the two years total expenditure  to N185 billion.

A breakdown of the N185 billion insurance operators spent on management expenses in which Vanguard Insurance got, revealed that 50 companies spent over N91billion in 2015 and N95 billion in 2016 while NAICOM is still collating the figures on the expenses of other companies.

Also, The Nigerian Insurers Association (NIA) 2016 report of the industry showed that operators spent N294.90 billion on management expenses between 2010 and 2014. The huge figures, according to industry sources may force the regulator to impose restrictions on expenditure of companies in order to ensure that the companies remain afloat, pay claims and give shareholders return for their investments.

Though, management expenses of insurance companies are far lower compared to that of the banks. Banks operating expenses for three years of 2012 to 2014 was N3.3 trillion, with 69 per cent of total operating income for the period going into financing this expense.