Reps Worried Over Low Revenue From Insurance Sector

The House of Representatives Committee on Insurance and Actuarial Matters has expressed concern over the low Internally Generated Revenue (IGR) of the insurance sector to the development of the economy of the country.

Chairman of the Committee, Hon Ahmadu Jaha, said this during a budget defence and interactive session with Nigeria Deposit Insurance Corporation (NDIC) and National Insurance Commission (NAICOM) on Tuesday in Abuja.

Jaha said the Committee shall ensure an insurance sector that will create over 15,000.00 quality jobs and also ensure a minimum of 10 percent contribution to the Nigerian Gross Domestic Product.

He said, “Members of this Committee on their own, have already done their homework on the Regulatory Framework, Operations and Practices of the sectors under the regulations of NDIC (Deposit Insurance) and NAICOM (Conventional Insurance) and noted with serious concern the low contribution of these sectors to the Nation’s Gross Domestic Product as well as low contribution to the monetary stability of the nation, among others.

“To this effect, the goal of this Committee shall be to leave the Nigerian Insurance Industry and Actuarial Science a better practice, through passing of bills that meet international standards as well as carrying out efficient and effective oversight functions in these sectors, thereby making the insurance (conventional and deposit) and actuarial science sectors to contribute meaningfully to the gross domestic product of Nigeria as well as contribute to the stability of Nigeria Financial System.

“Therefore, the Committee shall not rest on her oars until it has achieved, through oversight function and laws, a Nigerian Insurance Industry that is strong, reliable and innovative enough to be a real global Insurance Market attracting oversea inward cessions, instead of the present trend of outward retrocessions (importation of Insurance Services) that deplete our foreign
reserve.

The Committee shall ensure an Insurance Sector that will create over 15,000 quality jobs together with making a minimum of 10 percent contribution to the Nigerian Gross Domestic Product.

“In addition, the Committee targets at guaranteeing the existence of a Deposit Insurance Sector that shall effectively and efficiently carry out the supervision of banks to ensure protection of Depositors of Deposit-taking Financial Institutions, providing incentives for sound Risks Management in the Nigerian Banking System as well as contributing meaningfully to the stability of the Nigerian Financial system.”

He said the Committee is also empowered to make laws that govern the existence and operations of the two institutions and the sectors they represent.

Also charged with the responsibility of overseeing the conventional and deposit Insurance Industry (all operating on the Insurance Principle of Risks Transfer Mechanism) as well as the Actuarial Science Sector and making laws for the proper functioning of these sectors.

Jaha said the interactive session will afford the parties the opportunity to know one another, rub minds together with a view to understanding their mandates and come up with ideas that will ensure a result-oriented, productive and effective working relationships.

The Chief Executive Officer of the National Insurance Commission, Sunday Thomas, said between 2018 and December 2022, the market has moved from a premium of N426 billion to N733 billion.

He added that as at the third quarter of 2023, they had produced about N726 billion.

Thomas said the perception of Nigeria to insurance is a big challenge because of the low level of awareness and financial literacy.