NAICOM Sets Model To Risk-Manage Nigeria’s $1trn Economic Aspiration

……. Expresses Concern To Boost Industry Image

By Amaka Obiefuna

On inauguration of president Bola Tinubu in May 29 2023, he told Nigerians that he aspired to achieve a 1$trn economy for Nigeria by the end of 20230. To achieve this, all hands must be on deck including the insurance sector. Recognizing this lofty height, NAICOM understood its role as risk manager, hence the need for adequate preparations to manage risks expectations.

Delivering a keynote address at the Insurance Meets Tech (IMT) conference put together by Modion Communications, Mr. Omosehin said in achieving this objective of revitalising the insurance industry in support of President Tinubu’s economic goal, the industry must of necessity address the fundamental issues of low Insurance penetration, lack of public trust, market fragmentation, regulatory reforms, digital transformation and adaptation that have been plaguing the sector.

Speaking on the theme “Revitalising the Insurance Industry to Risk-Manage Nigeria’s One-Trillion-Dollar Economic Aspiration”, Omosehin maintained that to achieve the aforementioned goals, the insurance industry must develop a wide range of new skill sets and orientation, attract and retain talents, diversify our products spectrum, improve its adaptability and agility, improve on transparency and openness, and importantly, invest in technology as necessary conditions to de-risk the economy.

NAICOM boss underlined the need to invest in technology, online platforms, and mobile apps can improve customer experience and accessibility, noting that revitalizing the Nigerian insurance industry to risk-manage Nigeria’s one trillion dollar economy literally speaks to the insurance industry’s readiness and preparedness to de-risk the activities that is projected to galvanize productivity, innovations, economic growth and development.

“It is pertinent to reiterate that the Commission plays a vital role in fostering innovative business solutions that address pressing economic and social issues in Nigeria’s insurance sector. This commitment extends to ensuring prompt settlement of legitimate claims, promoting market growth through innovation, and driving commercial value within the industry.

“Our dear industry must rise up to the current realities of what is expected of us. Are we where we should be as an Industry? And your answers may definitely not be different from mine – No. Then how do we intend to get to where we should be?”

Omosehin stressed the worthiness to increase momentum of Insurtech development poses both opportunities and challenges for established industry players. To remain competitive, it is crucial that we proactively incorporate innovative Insurtech solutions that will change our conventional business models, thereby safeguarding our continued relevance in addressing customer needs and market position.

“The Commission had since understood this reality and issued the Regulatory Sandbox Guideline to accommodate the testing and refinement of innovative products. Consequently, we established a Directorate for Innovation and Regulation, recognizing that change requires new approaches. The Commission has also completed a draft Insurtech Operation Guidelines which shall be released very soon.

“We must imbibe technology in order for us to have a one-stop shop for insurance products and services. Innovation and sustainability are some of the major emerging issues today. The insurance sector must embrace innovation to meet up with the rapid market changes, changes in consumers’ preferences, tastes and lifestyle”

He charged players to develop products that meets the demands of our market as innovation have taken the driving force in the financial services sector. More critical to the theme is the issue of financial soundness and stability of insurance institutions, as a strong financial base is key to our success as an industry.

“Having sufficient capital that is commensurate to the Risk of an insurer has become inevitable if the industry is to meet up with up with the consequential effect of a growing economy, managing a one trillion economy and compete with our counterparts across the globe in management of risks.

“It is critical to note that navigating the current macroeconomic realities successfully would be a natural precursor and building blocks for the revitalization of the insurance industry in and this must of necessity prioritize inflation impact; digitalization and adaptation.

“The need to embrace digitalization is critical. Insurers must modernize their processes, enhance customer experiences through digital channels, and invest in technology to streamline operations. Adapting to changing consumer behaviours and preferences is equally important. Offering online policy purchase, claims processing, and customer service can attract tech-savvy customers” he stressed.