The licence given to four new insurance companies and a reinsurer by the National Insurance Commission last week Friday in Abuja, has set the competition tracks ready for a marathon race that shall be sustained by cutting edge service and unlimited space for innovation.
The sense of first task accomplished and readiness for the long haul, was visible from the remarks made by the chairman, board of directors, HEIRS General Insurance Limited, Mr. Tony Elumelu.
The request for licence to operate in the insurance market for the two HEIRS have been hibernating in the cabinet for new licences of NAICOM. The dormant state was upgraded when the new Commissioner for Insurance, Mr. O S Thomas, triggered the market conduct and business practice guidelines, and this culminated in the release of seven licences, branded “leases” to the board of the companies.
It’s intriguing that the licences were released to create a vibration of sort that will be felt in all the segments of the market: general, life, reinsurance and in the excluded Nigerians but now included class represented by Takaful, the plum for the now included. The new entrants is a signal from the Commission that the stage is set and the actors coming out from professional rehearsal sessions are prepared for the “premium” paying audience, whom have paid to secure their seats for one year ahead of the underwriting show, and all liabilities are already covered with full endorsement secured on approved terms and conditions.
The Commission, seemingly used the event to announce to the market that a new phase of competition has docked at the quays of insurance harbour and the level of activities is expected to move several inches up. Like all ports, it operates on the system of clearing and forwarding, goods and services are and should be constantly on the move to the delight and satisfaction of the customers. More so, the stage is opened with the optimum digital space explored to the maximum, to guarantee that tick up is achieved to the contentment of all that are involved.
With this expectation revolving, it is not a surprise that their arrival at the insurance market coincides with the renewal of policies which begins streaming in November and peaks at the end of December of every year. The major chunk of insurance and reinsurance businesses and treaties are renewed at the end of the year. So as the new members hit the market, they are running to cover as much ground as possible. Besides, they will most certainly start with the new capital limit. For the already existing companies, compliance with new capital requirement will be concluded and sealed by September 30, 2021.
The new comers are HEIRS General Insurance Limited, chaired by Mr Tony Elumelu, HEIRS Life Assurance Limited, which is chaired by Dr Tajudeen Yusuf and FBS Reinsurance Limited, run by the former Commissioner of Insurance, Mr Fola Daniel. Others are Enterprise Life Assurance Company Nigeria Limited, chaired by Keli Gadzekpo and Stanbic IBTC Insurance Life, chaired by Yinka Sanni.
Mr Thomas while presiding over the historic event, reminded them that the last time NAICOM issued out licence to an insurance company was about 10 years ago, while the last time a reinsurer was issued a licence was 35 years ago.
The CFI let the new companies know that they were receiving licences that were branded leases, and the period of time the lease will remain with the companies will be determined by the board. “We will hand it over to you to run your business but I pray that you will not give this Commission reasons to recall your licences.”
He reminded them that companies don’t die but people kill companies. The first in the chain of people to account he said, is the board and the next in line to account is the management, which is directly supervised by the board.
Pointing them to the road to avoid, he said the board are to take responsibility and hire fit and proper persons to manage the company and keep operation within the limits granted by capital, expertise and risks acceptance permit. However, he remarked that because the boards of companies have not fit into the capital and risks limits properly, as demonstrated by repeated unsettling incidents, “the regulator has been left with the responsibility of determining the capital that each individual operator needs- that would not have been necessary if the board has taken into consideration their risk capital in determining the level of capital that is required.”
Elumelu’s response not to disappoint the Commission, births his excitement to operate in the sector he has been on the side line waiting to obtain licence for a couple of years. He rolled out, resolved to chart a new course and doubled it with a promise to re-enact the banking success with a cocktail of good corporate governance, innovations in product designs that are channelled to deepen insurance penetration.
Pledging to meet and exceed expectations and deflate disappointment, Elumelu put his hand on the rudder of commitment and pledged to redefine product development as was the case with UBA where cutting edge banking, innovation and top level digital conclave, were escalated for effective and efficient service delivery.
“We will do no less: we understand market research, we understand what consumers want and we know how to reach consumers and we know how to meet and surpass the expectation of consumers especially with technology.
“So working with the leadership of NAICOM and other industry leaders in the insurance sector, we will all work together to bring about the change that would help this industry grow so that its contribution to GDP will begin to move to at least between 1- 3% under your leadership in NAICOM.”
Confident Elumelu said: “It’s possible. We will also work with you in engaging the National Assembly when necessary legislation has to be put in place to make the sector more successful.”
The banking/industrial magnate promised to engage the National Assembly in concert with other stakeholders is a high wired duty to influence legislative process to favour the industry. The industry has been confined to the shallow waters of legislative process where there is little power to influence. However, the high importance Elumelu and the crop of the new boards attach to insurance business, mean they want to go all the way to the top of the business and lift the market to the commanding and controlling height of business in a matter of years by continuous commitment to do business on the cutting edge.
Its a new dawn for the insurance market, service, competition and broad range of innovations streaming from several fountains and the focus by operators will change , enough to attract the attention of the public and subsequent patronage.
When the final count of licenced operators will emerge, they will join the already licenced five new operators. The on going last option to recapitalise the insurance companies will eventually strengthen the sector and all with no exception. The final approved companies sprouting from the options of stand alone recapitalisation compliant, or through mergers and acquisitions, will be ready to take commensurate risks and corresponding limits set by the board, capital adequacy and risk based supervision. The first step of the competition begins now, and the final look of innovation driven insurance market will be the ubiquitous trade mark of the market after September 30, 2021.