Ebere Nwoji

The Chairman Nigerian Insurers Association (NIA), Mr Kunle Ahmed has said that the target of Nigerian insurance sector operators, which is enshrined in the Nigerian Insurance Sector Reform Bill is to emerge most capitalised insurance sector in African region.

He disclosed this at the quarterly  press briefing of the association which is the umbrella body of all insurance underwriters in Nigeria.

Ahmed, talking about  how Nigeria can harness opportunities in the African Continental Free Trade Area (AfCFTA) in terms of underwriting of   huge and juicy businesses  across the region using opportunity of the AFCFTA said: “With the proposed increase in capital as provided by the Nigerian  Insurance Industry Reform Bill, Nigerian  insurance companies will be one of the most capitalised in Africa and this should boost their ability to deploy capital to writing risks across Africa.

He said the insurance sector operators recognised  the immense opportunities presented by the African Continental Free Trade Area (AfCFTA) adding that plans were at an advanced stage to explore them.

“A key focus of this initiative is on developing insurance products that cater for businesses operating across multiple African countries. This includes coverage for trade, investments, and multinational clients. The industry aims to capitalise on the AfCFTA’s Trade in Services protocol, which offers opportunities for increased financial integration and cross-border operations,” he stated.

The NIA Chairman noted that the proposed significant increase in the minimum capital requirements for insurance companies  in the order of N15 billion for non-life, N10 billion,  for Life, N35 billion for reinsurance firms would  enhance the financial capacity of insurers to underwrite larger risks, improve their solvency and increase public confidence in their ability to meet obligations, adding that it also aimed to improve the industry’s retention capacity and reduce reliance on foreign reinsurance.  

Currently, insurance operating companies are operating with minimum capital base of N 3 billion for non life, N2billion for life, N5 billion for composite firms and N10 billion for reinsurance firms.

Efforts to beef up this level of capital to meet up with quantum of risks facing the sector on daily basis failed due to strong resistance from forces in and outside the industry.

According to the NIA Chairman, currently, Nigerian insurers are considering establishing commercial presence in other African countries to tap into new markets directly, adding that NAICOM has urged Nigerian brokers, loss adjusters and insurers to improve their value proposition, professionalism and service delivery to remain competitive in the expanded African market.  

“Having recognised the need for a skilled workforce, the industry is emphasising capacity building in areas like risk management, underwriting and claims administration to meet the demands of a larger and more integrated market. “We will also embrace digital technology, which is seen as crucial for Nigerian insurers to operate efficiently across borders and enhance customer service delivery in a wider market,” he said.

He stated that cybersecurity was  also a key consideration in this digital shift, stating that  NAICOM was  also committed to bilateral negotiations with other African regulators, underpinned by mutual recognition agreements, to ease cross-border operations and ensure regulatory alignment.