NAICOM tasks insurers on FG’s $1 trillion GDP target

The National Insurance Commission (NAICOM) has stressed the need for underwriting firms to deal with challenges in the sector to position the industry for the $1 trillion output target of the Federal Government.

Speaking at the Insurance Meets Tech (IMT) 2024 conference in Lagos at the weekend, the Commissioner for Insurance, Olusegun Omosehin, said for insurance companies, inflation makes it difficult to operate profitably.

In his paper, Omosehin said for operators to mitigate the challenges posed by inflation, they must carefully manage their investment portfolios, adapt pricing strategies and maintain adequate reserves.

The commissioner, who was represented by the Head, Lagos Control Officer for NAICOM, Julius Odidi, said 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. He said the commitment extends to ensuring prompt settlement of legitimate claims, promoting market growth through innovation, and driving commercial value within the industry.

The regulator offered that to achieve the objective of stimulating the insurance industry, stakeholders must address the following fundamental issues plaguing the sector, which include low insurance penetration: lack of public trust; market fragmentation; regulatory reforms, and digital transformation and adaptation.

“While the surge of COVID-19 raged in 2020 and 2021 threatening global safety and testing the abilities, resilience, and preparedness of nations globally to deal with the unexpected outbreak, the pandemic highlighted the need for digitalisation.

“In the insurance sector for instance, while lockdowns negatively impacted traditional distribution channels, they also encouraged insurers to develop digital offerings.

“This has come to show that investing in technology, online platforms, and mobile apps can improve customer experience and accessibility,” he posited.

Odidi maintained that essentially, revitalising the industry to risk-manage Nigeria’s One trillion Dollar economy speaks to the insurance industry’s readiness and preparedness to de-risk the activities that are projected to galvanise productivity, innovations, economic growth, and development.

“With the rapid changes in technology and economic/business environment, this discussion is not just timely but also topical to reawaken the need for our dear industry to rise to the current realities of what is expected of us as an industry,” he stated.

The Commissioner submitted that the insurance sector must embrace innovation to meet up with the rapid market changes, and changes in consumers’ preferences, tastes, and lifestyles.