Brace up for fuel subsidy removal effects on insurance, says NAICOM
The recent fuel subsidy removal by the Federal Government will affect the demand for insurance, Commissioner for Insurance, Mr. Sunday Thomas, has said.
While delivering a keynote address at the Nigerian Council of Registered Insurance Brokers (NCRIB) 2023 Chief Executive Officers Retreat at The TCC Ogere, Ogun State, the commissioner said insurers must upscale their business models to attract individuals who are leaning towards creating sinking funds.
He stated that economic activities might reduce in the short run, so insurance operators, including brokers, and insurers, must optimise their management expenses to avoid the pressure of an off-peak period, while not forgetting to prepare for the possibility of cost-push inflation.
He said an important issue that needs to be tackled is the need for standards to prevent or reduce, to the barest minimum, unethical practices which ridicule or impugn the integrity of the insurance industry.
He commended the NCRIB for the cooperation to the commission’s effort to ensure standards among its members as well as the continued support and representation of the NCRIB in various industry committees instituted by the Commission, such as the AfCFTA Committee, and Committee on the Insurance Bill.
He, however, emphasised that irrespective of the differences in approach or methodology, they were committed to deepening insurance penetration in the industry.
He said: “It has, therefore, become imperative that we all work towards aligning our collective vision and goals for the industry in order to present a formidable front. We must break from an industry that is perceived as one that is always at logger-heads on matters that ordinarily are for the progress of the industry. This cannot be achieved without being true to ourselves as professionals in this time honoured industry.
“Let me emphasise that for this industry to remain sustainable, we must accept changes that come with modernisation and technological advancement.This is why we must realise that distribution channels for insurance products must be expanded beyond the traditional norms. Every arm of the sector must hugely invest in technology to compete or meet the expectation of clients. It has thus become imperative to support the Commission’s efforts to bring emergent online platforms for distribution or provision of insurance under the Commission’s regulatory purview in the interest of the insurance industry.
“An important issue is the need for operational standards to prevent or reduce, to the barest minimum, unethical practices which ridicule or impugn the integrity of the insurance industry. It is our humble view that strong and sound firms are better able to invest in the much needed IT solutions to ease operational pain-points within the industry hence the need to dissuade portfolio broking firms.
“Insurance brokers must begin to re-examine the insurance broking value proposition beyond the traditional perception.This is necessary to enable the insuring public/insured appreciate other values offered, as the rhythm has changed and people may only use services that provide priority values to them.”
Thomas also emphasised that insurance brokers have important roles to play in repositioning the industry.
This, he said, includes projecting the additional values created by the new regime of Third-Party Motor insurance cover, the NAICOM portal, improved soundness and stability of insurers, better market conduct practices and fair treatment of insurance consumers, as well as collaboration with state governments on compulsory insurances.
He reiterated that regulatory changes were continuous given the changing dynamics of the market environment.
“We must, therefore, avoid the obvious temptation to resist innovative regulatory and supervisory initiatives intended to make the industry more relevant to the economy. We cannot continue to wait; we must confront our challenges before our challenges consume us. It is important to reiterate that collective planning is as necessary as individual planning; if we do not collectively plan to succeed then we might fail collectively”.
He added that the Commission remains committed to the development and growth of the Nigerian insurance industry and would continue to collaborate with all stakeholders in promoting and entrenching good business practices.
NCRIB President, Mr. Rotimi Edu while speaking on the the theme of the retreat “Planning” said it is precise and will encapsulate all efforts towards instituting a solid foundation for growth and development of Insurance industry.
He stated that the “Brokers-Centric” focus of his leadership has been recording good success.
We are all witnesses to the increasing tempo of member’s interest in activities of the Council, while the same interest is being stimulated amongst insurance companies who do everything possible to collaborate with the Council for their enhanced bottom-line and ultimate corporate progress.
Edu assured that they would continue to commit to these lofty ideals for all their members.
He added that the Council is stridently trying to retool the minds of members to the growing expectations of the public about the quality service they expect from them.
(Culled From The Nation)