The Commissioner for Insurance, Mr. Fola Daniel, has reaffirmed the commitment of the Nigerian insurance industry to grow its premium income from the present N300 billion to N1 trillion by 2017.
Daniel stated this in an interview with Bloomberg in Dubai, United Arab Emirate Wednesday.
However, the new date is in variance with the original plan by the National Insurance Commission (NAICOM) to grow the industry's premium income to N1 trillion by the end of this year.
Daniel told Bloomberg that the country planned to more than triple the value of its insurance market in the next four years, hinging his prediction on the improvement in the industry's reputation in recent times.
"Our people don't trust insurance," he stressed.
"We've done a considerable amount of housekeeping to make sure the companies respect the rules," Daniel added.
The value of insurance contracts in the country, according to him, should rise to about N1 trillion ($6.4 billion) in 2017, about three per cent of Gross Domestic Product (GDP), from N300 billion now, or less than one per cent of GDP.
Penetration should increase to 22.50 per cent of the insurable population in four years from 10 per cent currently, Daniel added.
The chief regulator explained that compulsory motor-vehicle insurance, which makes up most contracts now, should remain at about 10 per cent by 2017, while life insurance should constitute seven per cent, non-life insurance business insurance three per cent while oil and gas insurance business is expected 2.5 per cent.
He also observed that oil and gas multinationals would continue to cede their risks in their local operations to international insurance and reinsurance companies going by the fact the local capacity for such business is still very low.
Before now, NAICOM had introduced the Market Development and Restructuring Initiative (MDRI), a medium-term plan spanning 2009 to 2012, meant to grow the insurance industry's premium income to N1 trillion by the end of this year from N160 billion.
The initiative was also expected to help create about 50,000 fresh jobs through the Agency Network System while raising the contribution of the industry to the nation's Gross Domestic Products (GDP) significantly.
The project, according to the commission, focused on four key areas including enforcement of compulsory insurances, sanitisation and modernisation of the insurance agency system, wiping out of fake insurance institutions and introduction of risk-based supervision.
It is also expected that as fallout of the collaboration between the different government and self-regulatory authorities involved in the process, revenues would be generated for the Fire Service through the establishment of the Fire Service Maintenance Fund.
In addition, it is expected that the collaboration between the Police, Vehicle Inspection Officers (VIO), Federal Road Safety Corps (FRSC), Fire Service, Planning Authorities, and Council of Registered Engineers in Nigeria (COREN), Nigerian Insurers Association (NIA), Nigeria Council of Registered Insurance Brokers (NCRIB) and Association of Registered Insurance Agents of Nigeria (ARIAN) would make things better.
This collaboration is in the form of enforcement teams in all the 36 states of the federation charged with monitoring compliance with the compulsory insurances laws.