Lagos — The federal government has set a target of N1 trillion annual insurance premium by the year 2020 LEADERSHIP can exclusively report.
It is gathered that the government is partnering the 36 states of the federation, including the Federal Capital Territory (FCT), to meet the target.
Insurance industry is currently generating about N300 billion annual premium, which is considered meagre, considering a huge population of 160 million people, with majority of them exposed to daily hazards.
The partnership being spearheaded by the National Insurance Commission (NAICOM) will, however, ensure that all the 36 states domesticate insurance in their respective state laws.
Moreover, it was learnt that if this could be achieved, each state could be generating about N30 billion premium annually for the insurance industry, which would, in turn, allow the federal government meet its N1 trillion premium target soon.
Already, NAICOM is holding talks with four states that will serve as pilot states, with a plan to extend it to other states as time progresses.
The four states are Lagos, Ogun, Gombe and Kaduna, which are to domesticate insurance laws in their respective states in a bid to enforce the five compulsory insurances at the state level.
With such domestication, LEADERSHIP findings revealed that the federal government can now deploy the state apparatus to enforce the five compulsory insurances in the adopting states.
Investigations also showed that state agencies such as Environmental Sanitization Board, Revenue Generation Board, Fire Brigade, among others, would be deployed to enforce builders' Liability Insurance, as there are plans to raid shops, filling stations, and houses to ensure that they have adequate insurance cover. This will also ensure that all public buildings are comprehensively insured.
The Federal Road Safety Corps (FRSC) and the states' Vehicle Inspection Offices (VIOs), on the other hand, would be used to enforce comprehensive and third party motor insurance policies.
To this end, the insurance industry would be generating billions of naira on a monthly basis from these states, while it would also improve the Internally Generated Revenue (IGR) of the adopting states, allowing the insurance industry to eventually realise its N1 trillion insurance premium target.
Speaking exclusively to LEADERSHIP, NAICOM's commissioner for Insurance, Alhaji Mohammed Kari, said, "If we sign a Memorandum of Understanding (MoU) with Lagos State government, which we are almost finishing, Lagos State will use Environmental Sanitization board, Revenue Generation Board, Fire Brigade, which we (NAICOM) has an agreement signed with them and since every state has its own fire brigade, the business would be done state by state to enforce insurance adoption.
"So, you can see now how much this will bring to state and insurance industry as well".
The Fire Brigade, Kari said, is empowered by law to enforce building insurance and the agency, alongside the state Inland Revenue, will be visiting organisations, offices, shops, filling stations and houses to request for their insurances.
He continued: "They will visit your place and ask you to show your evidence of insurance and if you can't provide that, they will fine you for not insuring. That is under their law. They will seal your business and you will continue paying fines every day till you have insurance. We have finished arrangement with the Fire Brigade.
"At the state level, we are going to go through their environmental Sanitation Board, Inland Revenue Board, among others, to check insurance, and that is why we need to have offices in those states. Any public building or property ought to have insurance and fire brigade will help us enforce this".
Also speaking in an exclusive interview with LEADERSHIP, the Executive Secretary/CEO, Nigerian Council of Registered Insurance Brokers (NCRIB), Mr. Fatai Adegbenro charged federal, state and local governments to lead by example by insuring all their assets, including public buildings, to increase insurance penetration and profitability.
Government, according to him, should lead in the implementation of the 'No Premium, No Cover' policy by insuring all its buildings, while making budgetary provisions for insurance of its Ministries, Departments and Agencies (MDAs).
He said, "Instead of budgeting funds that could have been used for developmental purpose for compensating victims of mishap or natural disaster, insurance is the best alternative, as there is no amount of intervention that could return the victims back to their financial status before the disaster struck, except insurance".
This, he said, would boost the premium income of the insurance industry and allow it meet the N1 trillion-premium income target.
Former Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, had at Nigeria Insurance Summit in December 2014 said the government is working assiduously to grow the Insurance Written Premium (GWP), which was then at N300 billion, to N1 trillion in the next three years and to N5 trillion in the next 10 years.
She pointed out that to widen access from three million policy holders to its targeted 10 million in 2017, there was need to extend micro-insurance and Takaful Insurance (Islamic-complaint insurance) to rural parts of the country, especially to Nigerian farmers who are exposed to various climate risks.
But one month to December 2017, which was the earlier deadline set to achieve N1 trillion premium income benchmark, the insurance industry is only trading a little above N300 billion.