A backlog
of N8.4 billion receivables owed the nation’s 57 insurance companies by
the Federal Government is threatening the survival of several
underwriters now struggling to make ends meet.
The unpaid premium which had accumulated
from insured government assets is seen by the Nigerian Insurers
Association (NIA) as one live wire the embattled insurers can latch on
to revive the prostrate industry.
The affected insurance companies had
underwritten the insurance of Federal Government assets with the full
confidence they would be paid as appropriate. But due to the drop in oil
revenue in 2016 and the foreign exchange crisis that rocked the
economy, the federal might could not provide for the N8.4 billion
premium.
Speaking on how the N8.4 billion premium
can lift the industry, the Chairman of NIA, Mr. Eddie Efokoha, urged the
Federal Government to redeem its image by paying the N8.4 billion
premium backlog immediately.
According to him, the payment of the N8.4
billion premium backlog would change the wrong perception Nigerians
have about insurance industry as it would enable it pay its obligations
to clients that suffered losses during the year under review. He added
that the fund could provide finance for the industry’s growth to aid the
country’s economic recovery.
Notwithstanding, Efokoha explained that
the industry was making progress as its Gross Premium Written (GPW) had
hit N350 billion in 2015, but that a lot more could be recorded if
government fulfils its promise. However aside the backlog, NIA wants the
Federal Government to make real its pledge to insure national assets
as this would further create depth for local underwriters.
The NIA boss argued that doing that shows
that the Federal Government recognises the role of the industry in the
economic development of the nation, stressing that the introduction of
insurance products in growing mortgage and housing sector would spur the
industry to record geometrical progress.
“NIA efficiently played its part at
mitigating the impact of recession on Nigerians with insurance policies
through prompt payments of claims. It also ensured that the insurance
market was expanded beyond the upper class and formally employed
market. The industry has reached out to the middle and lower income
classes and the distribution channels became more innovative,
considering product features, cost, proximity and other relevant
factors,’’ he said.
He commended the National Insurance
Commission (NAICOM) for its efforts at repositioning the industry,
adding that stronger ties with service providers would promote the
industry.
“Technology is taking over the world,
payment system is changing with trends, we practitioners have talked so
much about deepening insurance penetration. Insurance penetration cannot
be deepened without employing technology to fast track insurance
deliveries,’’ Efokoha said.
But speaking at the 2017 National
Insurance Conference (NIC) held in Abuja recently, the Minister of
Finance, Kemi Adeosun, said there are plans to review the Insurance
Consolidated Bill to ensure an efficient insurance industry in the
country.
In a statement recently in Abuja by the
Director of Press of the Ministry of Finance, Salisu Danbatta, Adeosun
said the move was aimed at making the bill conform to the ideals of
contemporary insurance practice, adding that the review would form the
basis of a new draft bill, which would be sent to the National Assembly
for consideration. She noted that a committee had been constituted to
carry out the review and make its findings known in three months.
According to her, the terms of reference
of the committee include a critical review of the draft Insurance
Consolidated Bill to make it a framework or principle-based legislation.
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