The National Insurance Commission (NAICOM) says the Nigerian Insurance Industry Reform Act 2025 is a carefully fitted turning wheel to reposition the insurance industry in a manner not done before now, and which defines it as a transformational law and not just a regulatory update.
This was sounded by the Deputy Commissioner for Insurance, (Technical), Dr. Usman Jankara, at a recent seminar, and he went on to state that the Act is a blueprint not a magic wand and therefore, there is need for a strategy and effective implementation.
“Whatever we are doing, we are doing it in overall interest of the market.” Turning to the divergent stakeholders of the market, Jankara dropped a hint, “We need as an industry to adopt what I call a stakeholders approach.”
He opens up, “A stakeholders approach is a move away from a shareholder privacy perspective that is focused on profit maximisation. A stakeholder approach recognises that every stakeholder in the industry has an interest, has a right that has to be protected. It is the balancing of the interests of the stakeholders that will allow the industry to better be seen as providing services to all the stakeholders involved in the insurance value chain.”
Adjunct to this he mentioned, is the need to also do a lot of capacity building across the insurance sector. Coming along this route he said, “is also a need for good market conduct practices. There must be a move away from the past where all we can do is ask how much was the premium last year, I can give you something lower. How much commission was returned last year, I can give you more.”
He insisted that a move away from that practice is the only way the operators can create an industry that everybody will aspire to be.
Jankara said the Commission’s preference for an industry that is top in good practice drives its stiff requirement for CEOs and MDs of broking firms and loss adjusters. “Whether you are a CEO or an MD of a broking firm or loss adjusting firm, your role is akin to a medical doctor, if you don’t have the competence you will kill your client. How do you kill your client? If a client comes to the industry and gets the wrong policy, at the point of claim there might be no claim. There are factories that have packed up for reasons of errors in policy or wrong brokerage advice.”
His advice, “We must not see our role in this industry as one which is lets share brokerage commission or lets get this business placed at a lower premium by all costs. The value proposition that we bring to this industry is that value that addresses the risks that Nigerians are exposed to. That is the value, that comfort that somebody has in purchased insurance policy.”
To get to the level of providing value to policyholders, the DCFI said, the industry needs to collaborate, create awareness. However, he said awareness can only stand when negative issues are cleared. This where NAICOM he noted, has come in to clear the negative challenges around some companies, claims complaints that have not been resolved, “and we are hoping that by the end of the recapitalisation exercise, the companies that will emerge will be companies that can comfortably meet their claims obligation and in doing that Nigerians will get to see a renewed or reimagined insurance sector that addresses the needs , the concerns and the peculiarity of Nigerians.”
