Daily Independent (Lagos)
Sola Alabadan
2 December 2008
Stakeholders in the Nigerian insurance industry have been charged to create more awareness so that the teeming populace can understand the importance of insurance to man and society in general.
Participants at insurance parliament jointly organised by Risk Analyst Insurance Brokers Limited and Financial Standard Newspapers in Lagos recently said greater awareness should be created by the regulatory body, National Insurance Commission (NAICOM), insurance operators and the Chartered Insurance Institute of Nigeria about the efficacy of insurance.
The parliament also resolved that the government must provide the enabling infrastructural environment for insurance business to thrive and support the development process, thereby contributing its expected quote to the nation's Gross Domestic product (GDP).
The government, participants at the conference noted should, through the appropriate regulatory agency, enforce the provision of the Pension Act 2004 as it relates to the compulsory procurement of group life assurance policy for employees by their employers.
On the part of the operators, they were advised to ensure that compliance with the code of ethics and good corporate governance practices remains the driving force of the sector as it seeks to redeem its battered image.
Besides, insurers were urged to make sure that they expeditiously do claims verification and settlement in order to sustain the interest of the policy holders, while developing attractive and affordable product offerings based on felt needs of users.
On the subsisting Insurance Act 2003, the lawmakers at the National Assembly were encouraged to revisit the law with a view to making it responsive to the emerging business scenario as the view that it was prepared by the regulated for the regulator, was rife.
To further redeem the image of the industry, insurance policy documents should be stated in simple and understandable language devoid of hidden legal provisions, while insurers should place greater premium on training and retraining of their personnel as strategy for enhancing their competitiveness.
Notwithstanding the fact that there was no regulation on rates to be charged by insurance companies, insurers should desist from price undercutting as they might end up paying not only salaries and claims from shareholders' funds but also become victims of receivership and liquidation, if they default in meeting their obligations, the parliament warned.
To ensure that insurers are liquid at all times, the operators were told to invest their premium income more in government bonds and treasury bills as these were risk free.
Insurers, the participants added should expand their networks beyond the frontiers of the nation as a strategy for strengthening their capacity, as well as collaborate to be able to undertake high-risk businesses in marine, aviation, oil and gas.
Another communiquÈ issued was that the insurance profession should be open to graduates of various disciplines in order to enhance the versatility of practitioners. Accordingly, insurers should take a cue from banks by providing jobs to graduates from other fields like Engineering, Sciences, and so on, as they will help drive the industry better.
While canvassing consolidation in the industry, which should be market induced, the parliaments said insurers should explore the huge but largely untapped potentials of life assurance business in order to enhance their premium income profile.
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