Insurance Sector In Nigeria.pptx

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Developments in the Insurance Sector inNigeria

ByBabajide Oniwinde - Regulatory Expert

April 2013


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Presentation Outline

Introduction

Developments in the Insurance Sector

Performance of Insurance Companies

Conclusion

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Introduction

Several initiatives embarked upon by NAICOM

has been enhancing the regulatory frameworkand ensuring that the insurance market isdeepened and the operators are strengthened.

The Insurance sector has witnessedimprovements in capacity to carry huge risk(e.g.

Oil& Gas/ Aviation), there has also beenimproved competition in the market in the year2012

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13 Companies were affected

by the Banking divestment

guideline

6 are divested by sale or

MBO.

3 are retained under Holdco

4 are still being finalized

ahead of CBN deadline.

Divestment of Certain Insurance Companies from their

Bank Parent


Insurance Companies

affected by Divestment rules.

1. FBN Life 8. UBA Metro

2. Zenith Insurance 9. Mansard (GTB)

3. ADIC (Diamond)10. Oceanic

Insurance

4. Great Nigeria

(Wema)11UnityKapital

5. Wapic 12. Keystone

6. . Union

Assurance

13. Law Union and

Rock (Skye)

7. Fin Insurance


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576 Insurance Brokers.

2250 Insurance Agents

48 Loss Adjusters

2 Reinsurance

Companies (MinimumCapital N10b)

Industry Structure


./2

17 Life Insurance

Companies (N2b minimum

Capital)

33

GeneralInsuranceCompanies (N3b minimum

Capital)

9

CompositeInsuranceCompanies(N5b minimumCapital)

59

Insurance

Companies


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Increase interest offoreign investors inthe market.

Investors are bringcapital, manpower aswell as innovation intothe market.

S/N

Insurance

Company

Foreign

Interest

1 ADIC NSIA

2 Oceanic InsuranceOld Mutual

South Africa

3 Mansard InsuranceEuropean

Consortium

4Prestige

Assurance

New India,

India

5 FBN Life SamlamSouth Africa

6 UBA MetroMet life

South Africa

5

Developments in the Insurance Sector /3

Foreign Interest in Insurance Companies


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Developments in the InsuranceSector/4

Insurance companies have

started sending in their

accounts in IFRS formats.

NAICOM is working closelywith FRC on monitoring

compliance with IFRS.

Sensitization workshops

have been conducted

throughout 2012 for CEOs,

Board members, CFOs,

External Auditors on IFRS.

IFRS


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Developments in the InsuranceSector/5

Guidelines on Riskmanagement

Framework for insurers

and reinsurers was

released in February

2012.

Companies are

employing various tools

for identifying,

analyzing and

monitoring risk to whichthey are exposed.

Risk Management


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Developments in the Insurance Sector/6.

Micro Insurance

diagnostic study was

conducted to assess the

demand and supply of

insurance policies to the

low income to facilitate

financial inclusion.

A draft framework is being

reviewed by industry andconsultants and will be

released to provide

standards for operation of

micro insurance activities.

Micro Insurance


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A draft framework has been

developed for Takaful

operation. This is in

consultation process.

The Commission has also

become a full member of the

standard setting

organization Islamic

Financial Services

Board(IFSB).

There are proposals for a

standalone Takaful

company.

Takaful Draft Guideline

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Developments in the InsuranceSector/8.

The guideline requires that

cover will not take effect until

premium is paid in full by the

insured.

There has been a

considerable improvement in

the prompt payment ofpremiums to insurance

companies as a result of this

guideline this improved

liquidity and cash flow.

No Premium No Cover

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The IMF Technical

Assistance Mission

helped in populating and

testing the AML/CFT Risk-

based Supervision Matrixand the production of a

Draft AML/CFT On-Site

Supervision Manual.

NAICOM carried out areview of the AML/CFT

Regulations for the

insurance industry. The

printing and gazetting of

the revised regulations.

AML/CFT

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51 insurance companies were inspected. There was monitoring of

all remedial actions and other actions recommended by the

Commission.

Several insurance brokers were inspected in 2012.

2 additional zonal offices were opened to cover inspection range.

Inspection & Supervision

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10 insurance companies

have subsidiaries outside

Nigeria spread over West

Africa Cameroun, Cote

dVoire, the Gambia,

Ghana, Liberia, Sierra

Leone. In Uganda, Kenya.

NAICOM has signed an

MOU with the NationalInsurance Commission of

Ghana for information

sharing and joint

inspection..

Cross Border Supervision

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Forced resignation of the Board of one insurance

company over issues of Corporate Governance and

financial reporting. Interim Managing Board appointed to control the

affairs of the company. No policyholder was put at

risk.

Suspension of another insurance company fromtaking on New business pending investigation

regarding Corporate Governance issues.

Enforcement Activities

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Trends in Premium income

Performance

75,619.00

95,005.00105,378.00

157,138.00

190,309.00

212,156.00

233,135

260,845 ( Estimate)

0.00

50,000.00

100,000.00

150,000.00

200,000.00

250,000.00

300,000.00

2005 2006 2007 2008 2009 2010 2011 2012

Mi

l

l

i

o

n

s

Year

Total Insurance Premium Income 2005-2012

Insurance Premium Income

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Industry performance trend

Performance

December

2010

December

2011

December

2012

1

Total Assets (Nb) 585 621

635

2

Total Premium (Nb) 212 233

260

3

Total Claims paid (Nb) 53 60

75

4

Number of Branches 658 658

655

6

Claims Ratio (%) 20 25

24

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The Complaints Bureau of

NAICOM received over 300

fresh complaints, 55 has been

fully resolved and settled whilethe others are on course for

resolution.

Prestige Assurance plc is the

lead company in the insurance

of the ill- fated Dana Air crash.The Commission have been

monitoring the payment of

compensations to families of

victims.

Complaint Bureau & Consumer Protection

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Several initiatives to

improve the image of the

industry includes the TV

programme Insurance &Claims sponsored by

NAICOM. Media adverts,

billboards, radio jingles,

distribution of leaflets.

Road shows and

stakeholder workshops for

enlightenment and financial

education.

Awareness Campaign & Public Education

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Conclusion.

Given the challenges of public resistance to

insurance sometimes based on religious and

cultural beliefs coupled with the impact of the

economy on the disposable income / standardof living of vast majority of Nigerians, the

growth of the insurance sector has not been as

fast as desired.

Nevertheless an ambitious agenda has been put

in place to continue to deepen the insurance

market.

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.

Thank you

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