Ebere Nwoji
The Nigerian insurance sector, in 2018, grew its total premium from N363 billion in 2017, to N400 billion in 2018.
This
represented a 10 per cent growth in the volume of business written by
the industry operators. But it was below the decade old target of N1
trillion.
Disclosing
this at the 48th Annual General Meeting of the umbrella body of
insurance underwriters,
the Nigeria Insurers Association(NIA). Held in
Lagos, President of the association, Mr Tope Smart, said during the
year under review, the insurance industry contended with a lot of
negative factors. He highlighted these to include poor operating
environment which the insurance sector like every other sector of the
economy waded through in the year under review. In addition, he
identified poor power outage, which according to him continued to be a
major challenge to businesses in Nigeria,
He further noted that failure to abolish or amend the CITA 2007 remained a huge burden to the insurance companies.
Section
16 of the company income tax requires insurers to pay tax on every
claims that is up to 25 percent of their gross premium which they saw as
double taxation.
Highlighting
other negative factors that affected the insurers and the economy in
general during the year, Smart, said “Growing herdsmen/farmers’ clashes
across the country, insurgency and armed banditry in the north, rising
cases of kidnapping, armed robbery and other violent crimes as well as
communal clashes in some states all combined to negatively affect the
bottom line of many insurance companies.”
He
however said the association was working closely with the National
Insurance Commission (NAICOM) to promote the business of insurance and
increase its contribution to national Gross Domestic Product (GDP).
“Some of
these initiatives include the insurance industry rebranding project,
regulation on micro insurance, collaboration on financial inclusion,
bancassurance guidelines and others which will impact positively on the
business of insurance companies,” he explained.
The NIA
chairman, noted that the circular issued by NAICOM on the new
capitalisation for insurance and reinsurance companies, was part of the
regulator’s initiative towards promoting the insurance industry.
The
regulator, had on May 20th, announced a new capital regime for the
industry, saying that with effect from June 2020, insurance firms
underwriting life business should increase their operating capital from
the present level of N2 billion to N8 billion, those into General
business are expected to increase theirs from N3 billion to N10 billion,
composite firms would raise their capital base from N5 billion to N18
billion, while reinsurance firms would move from N10 billion to N20
billion.
Smart,
however, noted that the association has started engaging NAICOM with a
view to defining the components of the new capital level as well as the
incentives and palliatives that members will enjoy to ensure that as
many companies as possible scale through.
He urged
the association members to contact the secretariat if they face
challenges and also for updates, “on our part we will continue to update
you as we make progress in our engagements with the commission.”
On the
NIA towers project, the NIA chairman, who had promised to work with
other council members for its actualisation, stated that substantial
progress in bringing the dream to fruition had been made as he explained
that the contractor and subcontractors have fully mobilised to site
and that work was progressing according to plan presented by the
contractor.
He
commended the Chief Executive Officers of member companies for their
support towards the vision through payment of the NIA house levy. He
palso urged them not to relent as the association strives to deliver the
project in July 2020.
Also
speaking, NIA Director General/CEO, Mrs. Yetunde Ilori, informed the
members of successful implementation of a USSD code, which according to
her would enable policyholders and law enforcement agencies to arrange
for meetings where member companies can deliberate on the challenges and
proffer solutions so as to ensure sustainable growth of the industry.
“The
introduction of the code is a major achievement for the association as
it eliminates challenges posed by poor internet connectivity in rural
areas which had been a major issue in the development of hand-held
devices for enforcement of NIID,” she said.
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