It was all thumb up for surge in looking inwards and realising that capacity exists for big risks in the local market and no doubt this was raised to the position of prominence by the local content act; several years ago this was merely muted and now high calibre personalities in insurance and economy consulting say local insurance firms have capacity to retain more risks, and increasingly turning the local market into a regional insurance hub.
This salient remark about the improved capacity in Nigeria was a reverberating comment at a media parley jointly sponsored by Boff & Co Insurance Brokers Limited and B. Adedipe Associates Limited for insurance journalists in Yaba, Lagos yesterday. Firing the high calibre special risks improved high retention salvo remark, Chief Babajide Olatunde-Agbeja, chairman/CEO at Boff & Company Insurance Brokers Limited, attested that the industry has improved its capacity over time for special risks thus, earning good points as a prime taker for previously avoided special risks, and also Dr. Biodun Adedipe acclaimed economic guru, said the economic outlook has in the assembly line insurance steroids capable of transforming the market if enforcement inputs are appropriately deployed.
Giving a clear illustration of capacity build up and higher risk retention which is commendable at the local market current state, Olatunde-Agbeja said the market can adequately accommodate a special risk as large as $150 million, this now local peak was impossible several years ago when over 70% of that amount were ceded to developed market. Now, for such volume the foreign cession has dropped to 20%. Besides, he said the market has moved from inadequate capacity to excess capacity for such volume of special risk. He comments on the need not to rest on already established oars but to continuously earn points in capacity, “There is need for increased capacity in the Nigerian insurance industry; when Boff & Co started special risks 25 years ago, we were doing 70% of our special risks portfolio abroad, overtime, it reduced from 70% to 2o%. In the last six months, we had problems of finding excess capacity to insure abroad.
He said the market has scored well on capacity, however, he said playing on this turf for such risks require acquiring continuous training and become a dispenser of technical know-how in that area of insurance as well as other areas of underwriting. Also to be fused into this underwriting improvement is cooperation, sustained and constant stakeholders’ engagement, regular staff training and retraining and investment in information technology among others as critical to the growth and development of the Nigerian insurance industry and equip the market to be a player in the international business of insurance.
Proclaiming himself a supporter of the botched tier-based capital that fits an insurer line of business, Boff & Co helmsman said the industry needs recapitalisation, noting that those who went to court to stop the advancing insurance recapitalisation exercise did a lot of disservice by challenging the exercise.
Earlier in his presentation titled “2021 Review and 2022 Economic Outlook,” the chief consultant of B. Adedipe Associates Limited, Dr. Biodun Adedipe, a renowned international economic consultant applauded insurance industry but outlined areas of improvement. For instance he said Nigeria still experiences insurance low penetration and this needs to be overturned by sustained policies and combined market plan of action. On the part of the government he stated that government needs also to be responsible to its insurance obligations and pay promptly premium; and following this is enforcement of necessary market upgrade policies.
“If the government and its agencies are responsible, put more firmness into enforcement, then, what we have today will change and the industry will create more value. And of course when insurance sector is vibrant, it enables businesses and entrepreneurs to take risks which is part of the economic growth,” he pointed out.
Adedipe noted there are challenges of insurance in Africa. He noted that these challenges could be red flags and are deflecting gains including lack of appropriate information to policyholders. On low insurance penetration in Nigeria, the economist said, there is need for operators to provide adequate information to policyholders and prospective insurance customers and clients.
“If someone says because of religion, can we point them to the direction of takaful. People need to see that insurance is fundamental and important for growth. Globally insurance is becoming more important and Nigeria cannot be left out from this trend,” Dr. Adedipe stated.
In his opening remarks, the Chairman, National Association of Insurance and Pension Correspondent Association of Nigeria (NAIPCO), Chuks Udo Okonta, explained the rationale behind the NAIPCO Media Parley with Boff and Company Insurance Brokers Limited and B. Adedipe Associates Limited was to make journalist better managers of information, “every information you are going to give us today, we are going to digest it ourselves before putting it out to the public.”