Elumelu wants NAICOM to raise capital base for Non-life companies to N30b, N1b to re-capitize insurance brokers
Chairman of Heirs Holding, Tony Elumelu has called on National Insurance Commission (NAICOM) to raise the capital base of Non-life insurance companies to N30billion and N20 billion for life insurance firms.
Elumelu who spoke at the National Insurance Conference 2023, with the theme: ‘Redefining Safety: Insurance solutions for public buildings and building under construction said, currently with the capital requirement for insurance sector set at N8 billion for life insurance and N10 billion for general insurance with the devaluation of out currency, it’s about $8 billion for life and $10 billion for general.
“And these are insurance companies in Africa largest economy and how can an industry intended to insure and pay the risk associated with economy growth for a country with a low capital requirement?”
Speaking on a theme paper, Redefining Safety: Insurance solutions for public buildings and building under construction, he said in 2019 alone, 43 recorded building collapsed in the country, with further estimated 6,000 building faces impending collapsed in the country.
He also recommended for a rise in re- capitization for insurance brokers to N1billion, and urged the regulator to review the dichotomy in insurance license.
He said, “Review the dichotomy in Insurance authorisations/licences between life and non-life. Consolidated operators should have N50 illiobn. Let us use regulation to shape behaviour and enforce compliance.
“NAICOM should focus on substance and things that will shape the sector and stop approving adverts. Use that time for more important aspects of regulation and save taxpayers money for more catalytic actions.”
Elumelu also called on all insurance companies to make a mandatory contribution of 0.5 per cent from their total revenue to drive industry awareness for 5 years period.
In his part, Commissioner for Insurance, Sunday Thomas, said the commission under his leadership had remained resilient and focused on implementing initiatives that will foster development of the Nigerian insurance industry and align its fortune with that of the nation as the Africa largest economy.
He said, the commission in opening it the insurance supply side through licensing of 12 additional new entrants and expansion of insurance distribution channels “has enhanced availability of insurance products as well as increase local insurance capacity in Nigeria. This was historic considering that the last time an insurance company was licensed by the Commission before those recently licenced was 10 years ago while that of any Reinsurance company was 32 years ago.
“The Commission as part of its support to government initiatives mobilized the insurance industry to contribute the sum of N500 million and free Life Insurance cover for front line workers in the management of the COVID-19 Pandemic.”
In terms of its performance, he noted that the industry premium income between 2014 and 2022 grew at an average of 13.6%; from a premium income of N282 Billion to N726.2 billion. The total assets of the sector also grew at an average of 12% for the same period; from an asset base of N827.5 billion in 2014 to N2.33 trillion in 2022.
