Increased insurance capital base right move without plan, insurance expert says

An  Insurance  expert, Mr Ekerete Gam-Ikon, says the move by the insurance regulator, National Insurance Commission (NAICOM), to increase the capital base for insurance companies in the country lacks significant plan.

Gam-Ikon said this in an interview with the News Agency of Nigeria (NAN)  in Abuja.

He said rather than increasing the capital base, the regulator should focus at addressing the sector’s challenges.

He said the insurance industry faced the challenge of poor engagement of the public, poor governance,  poor management,  poor capital, and poor service delivery among others.

The expert said increasing the capital base of insurance companies could not resolve the problems of the sector which  required urgent attention.

“The poor picture surely requires urgent and strong attention but the question is, should capital be the point from which to address these challenges?.

“In spite of the good intentions of the regulator, NAICOM, I think there ought to be an integrated plan that is well communicated and the request for recapitalisation is then thrown into it.

“Without an integrated plan to address other challenges, it is an incomplete attempt at bringing the insurance industry to speed.

” And I’ll rather say this is a right move without plan and if there is a plan, it should not be shrouded in secrecy,” Gam-Ikon said.

According to Gam-Ikon,  the state at which the industry is at the moment cannot  allow it attract new funds needed to create growth of new dimensions.

He said the level of distrust of the insurance industry occasioned by the misdemanour of the poorly managed and poorly funded companies also posed a great threat to the industry.

He added that as it stood,  NAICOM remained the only eligible institution to approach and invite potential investors to the industry.

Gam-Ikon said if things were not looked into,  “we would  finish the recapitalisation exercise by 2020 then come back two years later looking for more capital.’’

He urged the regulator to ensure ways of bringing in more innovation and technology to insurance business in the country.

“Demand that the companies should have people with certain skill set to provide the capacity the industry lacks to underwrite some risks.

“Also ensure they invest in certain tech solutions that will drive premium generation and prompt claims settlement,” Gam-Ikon added.

-NAN