The Nigerian insurance industry is growing on the average 40 per cent from less than three per cent in the last three years on the back of reforms by the National Insurance Commission (NAICOM), according to the commissioner for insurance, Mr Fola Daniel.
Daniel who spoke at a media chat in Lagos said the industry has the capacity to grow between 200 and 400 per cent if compulsory insurance and the 'no premium no cover' policy among other reforms are strictly adhered to.
Specifically, he mentioned that the commission initiated the Market Development and Restructuring Initiative (MDRI) in 2009 to among others, enforce compulsory insurances and eradicate fake insurances in the country. This initiative, according to Daniel, has been vigorously pursued by the Commission across the six geo-political zones of the country.
He attributed the positive developments in the industry to a series of new reforms embarked upon by NAICOM lately. These reforms, according to him, include the introduction of risk-based supervision, migration to International Financial Reporting Standard (IFRS) from the Nigerian Generally Accepted Accounting Principles (NGAAP), and market conduct reforms.
Others include claims settlement reforms, and financial inclusion amongst others, all geared towards developing the industry and improving the general perception about insurance.
He said the reforms are in line with the Federal Government's vision 2020:20 of deepening insurance penetration to become the insurance industry of choice among the emerging markets in terms of capacity, safety, transparency and efficiency.
"Nigeria is much likely to attain a sustained economic growth and development if it can adapt its insurance industry with innovative ways that will bring on board the generality of the country's population," he said.
He added: "the Nigerian insurance sector has great potentials for massive growth. You will agree with me that the population size of the country, if adequately harnessed, gives an added advantage to the insurance industry to further develop its market.
"This is what we intend to achieve with the various initiatives incepted by the Commission in recent times. We will definitely appreciate the unflinching support and cooperation of all of you in this drive." In order to ensure adequate understanding and build capacity amongst the stakeholders, the NAICOM is conducting a series of workshops and seminars for all stakeholders.
On the vexed issue of delayed or non-payment of claims, he said the Commission commenced the implementation of section 50 (1) of the Insurance Act 2003 on January 1st 2013 to put a stop to it, and that the effort is paying off.
Daniel specifically said that in 2012 a total of N1.2 billion claims were settled by insurers with the intervention of NAICOM. The figure according to him increased to N2.2 billion in 2013.
"Having also recognised the urgent need to develop the retail insurance market which has remained grossly untapped considering the vast population of the country, it became imperative for the Commission to incorporate micro-insurance and takaful as important vehicles for achieving greater insurance penetration in the country," he said.
NAICOM recently released the Takaful Guidelines and the micro-insurance Guidelines to the market, which is now ready for implementation. Equally it's set up an industry steering committee for micro-insurance under the Chairmanship of the director-general of the Nigeria Insurers Association (NIA), Mr. O. S. Thomas.