INSURANCE SECTOR OF FSS2020
To become an insurance market of first Choice in Africa noted for high level of capacity, transparency, efficiency and safety and attains the 15th position in world insurance premium generation by the year 2020.
To develop an Insurance Sector that drives and protects the economy through effective and efficient market structure.
Insurance sector objectives:
The FSS2020insurance sector objectives In collaboration with NAICOM are:
- Ensuring Insurance credibility and protecting policy holders
- Embedding governance and risk management framework for the Insurance Companies
- Enhancement of access to finance (financial inclusion) with business development support and new products
- Risk based capitalization of Insurance Companies.
FSS2020 INSURANCE SECTOR TRANSFORMATIONAL PROGRAMS (TPS).
There are 3TPS under the FSS2020 Insurance Sector; TP15, TP16 and TP17
(a) TP15- Mass Insurance Encouragement and micro Insurance program(Takaful)
(b) TP16– Insurance Market Conduct framework – to increase the sector’s credibility and protect policy holders.
(C) TP 17– A framework-coordination for Insurance Regulatory Enforcement.
Why reforms in the Insurance sector?
- a) Ensuring that the sector is financially sound (capacity wise)
- b) Creating an efficient, profitable market structure to transform overall penetration and gross premium (efficiency wise)
(c) Creating consumer trust in the sector (safety)
(d) To leverage on ICT to drive insurance penetration in modern times and enhance communication and advocacy.
ACIVITIES IN INSURANCE SECTOR.
- A proposed Insurance Amendment Bill is in the works to strengthen the regulatory oversight of NAICOM.
- Micro Insurance scheme– The target is to ensure market penetration and deepen the insurance industry. Contribution of Insurance to GDP is low about 0.44%.
- Enforcement of Compulsory Insurance: Pursuant to Sections 64 and 65 of the Insurance Act 2003, NAICOM is reenergizing on the campaign towards enforcement of compulsory insurances in Nigeria to enhance the industry’s contribution to GDP.
- Awareness and Confidence Building: FSS2020 is collaborating with NAICOM to ensure massive public awareness is created in the insurance industry and restoration of insurance credibility and reliability in Nigeria to restore public confidence and attract patronage.
- Prompt Settlement of Claims: FSS2020 collaborates with NAICOM to sensitize the organisation on the need to promptly settle all claims to the holders of insurance policy in the industry once the risk occurs. This is extensively on –going with several claims now paid promptly.
- Attraction of International Investors and new products: The regulatory body –NAICOM is also working hard to ensure credible Insurance Brokers and international investors are allowed to breast the tape and make inroads in the market with new products available.
- Insurance And Ease of Doing Business in Nigeria– Working in collaboration with Presidential Committee on ease of doing Business to lessen the difficulty in doing business and enhance investors’ confidence in the industry with adequate incentives and enabling environment for the business to thrive.
- Proposed Insurance Forum: FSS2020 is working closely with NAICOM,NIA, NCRIB, actuaries, brokers, and other key insurance companies to hold an insurance sector forum to discuss ways to improve the insurance industry in Nigeria and pass the outcome to NAICOM for consideration and implementation..
- Recapitalization of Insurance Companies, Capital adequacy, verification of insurance companies, Corporate Governance framework and review of Insurance guidelines for brokers and licensing agents.
Notwithstanding these laudable activities there are inherent weaknesses, threats and other key sector challenges which the Regulatory body has to squarely address in order to catch up with the best global practice and fortify the sector.
THREATS OF THE INSURANCE SECTOR
There are also some threats that hamper the growth of the insurance industry which need to be addressed which include but not limited to:
- Public perception of insurance;
- legislative bottleneck in the passage of Insurance Amendment laws
- Prevailing economic conditions e.g. rate of inflation on policy payouts, double taxation on policy holders
- Crime level in the society;
- Insufficient data about insurable populace
- Lengthy and expensive judicial processes in resolution of disputes
PROPOSED AREAS OF INTERVENTION AND MITIGATION
In order to address the challenges and weaknesses of the insurance sector, FSS2020 is proposing the following interventions:
- Enactment of a minimum standard for claims settlement
- Engagement of stakeholders for inclusion of Insurance studies in the curriculum of tertiary institutions
- Collaboration with NAICOM & NIA to create more avenues/ channels to redress complaints and meet quarterly at the FSS2020 Insurance forum for update
- Facilitate publication of Insurance Act into major languages for understanding of the general public and enhance insurance awareness
- Facilitate the use of technology in insurance industry
- Support NIA & NAICOM in the implementation of market conduct guidelines
- Facilitate capacity building for Insurance Inspectors (to monitor compliance with standards on claims and market conduct)
- Facilitate the creation of an insurance database of all existing policy certificates
- Employ the services of Financial Ombudsman for quicker dispute resolution
- Facilitate Enlightenment and advocacy Programmes on the available insurance products, services and options.
- Immediate amendment of the Insurance Act 2003 to empower NAICOM and give it autonomy for its oversights.
- Continuous collaboration with NAICOM to embark on mass insurance literacy and simplified policies.
- Advocate for capacity building in insurance market operations for operators, regulators and the public
- Advocate for autonomy of the regulatory body and ensuring the amendment of the Insurance Act 2003
- Collaborate with NAICOM to ensure transparency in the industry
- Recapitalize the insurance industry to meet the huge insurance risks and best practice.