By Davis Akinmola
The National Insurance Commission (NAICOM) has said that there is a need to adopt risk-based supervision and risk-based capital before the industry can realise its financial stability in the economy.
The commission, also said to attain this operators in the industry should strive to key into it if they want to compete with their counterparts across the globe and remain relevant in the management of risks of their existing and potential customers.
These were disclosed by the Commissioner for Insurance,), Olusegun Omosehin, at the Chartered Insurance Institute of Nigeria’s year 2024 Professionals’ Forum held in Abeokuta, Ogun State, with the theme “The Insurance Industry: Transformation Strategies towards Expanding Market Reach.”
The commissioner, who was represented by the Deputy Commissioner for Insurance, Finance, and Administration, Ekerette Ola Gam-Ikon, stressed the need for financial soundness and stability of financial institutions to hedge against the impacts of negative events in the world.
He said “We are all aware that major events in the world such as the COVID-19 pandemic, economic instability, climate change, rapid technological advancement, changing behaviour of consumers, crises across different parts of the globe, soaring inflation, instability in prices and many more have a direct impact on global financial markets hence have now altered the way financial services are carried out.
“Financial soundness and stability of insurance operators have become more critical than we can ever imagine.
To him, the adoption of risk-based supervision and risk-based capital has become inevitable if we want to remain significant in the management of risks of our existing and potential customers.”
According to him, the commission has resolved to pursue, as a priority, the safety and soundness of regulated entities. Remember the words of Benjamin Franklin: “One rotten apple, spoils the barrel”. We are all witnesses to what this has caused as an industry and are now more determined to rid ourselves of that cankerworm.
“Innovation and sustainability are some of the major emerging issues today. The insurance sector must embrace innovation to meet up with the rapid market changes, and changes in consumers’ preferences, tastes, and lifestyles.
Gam-Ikon urged operators to develop products that meet the demands of our market as innovation has taken the driving force in the financial services sector.
“This is the time for insurance professionals to make insurance count in our national discourse. It is time to harness every opportunity to maximise the potentials of the dynamics, demography, size of our economy, and the ambitions of the government,” he said.
In her welcome address, Yetunde Ilori, President of CIIN, said the insurance sector presently faced an unprecedented opportunity to reinvent itself.
Ilori explained that through digital transformation, insurers could offer personalised, seamless experiences to their customers, simplify their operations and create innovative products that addressed the changing risk landscape.
According to her, whether through AI-driven underwriting, blockchain in claims management, or new models like on-demand insurance, the industry is being reshaped.
“However, transformation is not only about technology. It is about creating a customer-centric mindset that focuses on building trust, offering transparency, and fostering long-term relationships.
“Expanding our market reach involves understanding the evolving needs of our customers, reaching underserved segments, and providing solutions that speak directly to their concerns,” she said.
The News Agency of Nigeria reports that the Insurance Professionals Forum is a yearly gathering of insurers across the country organised by the CIIN.
It is an opportunity for these insurers to brainstorm on the recorded successes, challenges, and opportunities ahead to move the industry forward.
