X-raying Nigeria Insurance Sector During Buhari’s Regime

After eight years of former President Muhammadu Buhari’s administration, insurance sector operators say it’s time for stock taking as they count their gains and losses, writes Ebere Nwoji

As Nigerian business community joins other citizens of the country to bid the regime of the immediate past President Muhammadu Buhari fare well after eight years of tortuous economic and business experience, insurance sector operators said there were gains and losses during the administration, which must be examined.

The Buhari’s administration which commenced on May 29 2015, ended Monday May 29, 2023 as the new administration of Asiwaju Bola Ahmed Tinubu officially took over the mantle of leadership of Nigeria as its 16th president.

Looking back at where they were coming from way back in 2015, insurers said they had a lot of good and bad stories to tell. But in the views of some insurers, just like some other operators of the economy, the insurance sector, going by its experience during the regime, has more of bad than good stories to tell.

Operators’ Assessment

In their assessment of how the fortunes of the sector fared during the period, the insurers said at the beginning of the regime, it was like business as usual in that like the past administrations, there was total neglect of the sector .They said it was as if the Buhari’s regime failed to see anything good about the sector.

The insurers said little or no attention was given to key problems bedeviling the sector adding that the regime failed to hearken  to all the hues and cries of the operators especially regarding insurance of federal government assets, non enforcement of compulsory insurances, Nigerians’ apathy to insurance due to high inflation level, poor disposable income of the masses which did not encourage savings as well as  non enforcement of insurance law on public buildings and other compulsory insurances. They said the last straw that broke the camel’s back was  the regime’s failure to sign into law the long awaited insurance bill presented to it

According to the insurers, the regime met the insurance bill unattended to and left it unattended to despite that this time the bill was reviewed, repackaged and tagged Consolidated Insurance Bill with all the “ts” well crossed and “l”s well doted and having passed through the readings by the two chambers yet was totally ignored till the end of the regime.

The insurers said evidence to the fact that the regime did not have much regard for insurance was when at the very end of the regime, Buhari signed into law, eight bills presented to him but left unsigned the insurance bill on which the hope of the industry hung.

Positive Impact 

The insurers however recalled that the regime later accorded some recognition to the sector, when during the COVID-19 pandemic, the insurers offered N11 billion worth of insurance cover to the health workers.

THISDAY recalled that the president himself commended the sector operators for the kind gesture during a nationwide broadcast saying “In keeping with our government’s promise to improve the welfare of healthcare workers, we have signed a memorandum of understanding on the provision of hazard allowances and other incentives with key health sector professional associations.

We have also procured insurance cover for 5,000 frontline health workers.

“At this point, I must commend the insurance sector for its support in achieving this within a short period of time.”

Perhaps, to reciprocate the insurers’ kind gesture, the former president with his vice, Professor Yemi Osibanjo, attended virtually the 47th Africa Insurance Organisation’s conference hosted by Nigeria in September 2021 during which he reaffirmed his confidence in the ability of Nigerian underwriters to excel and be at par with their counterparts globally under the right business environment.

He specifically commended the role played by the underwriters at the peak of COVID-19 crisis thanking them for making the country proud by successfully organising the conference. 

“I once again use this opportunity to commend the Nigerian insurance industry for identifying with the government through the provision of life insurance set of packages for frontline medical and paramedical personnel in the course of this fight. Your support and solidarity in these times are highly appreciated.”

He noted that the insurance sector would play a vital role in the diversification of the economy by bringing necessary stability, economic sustainability, revenue generation, job creation and financial inclusiveness, and that there was a great future for the insurance industry but observed that there was need to put the right mechanism in place for it to thrive.

The former president ended his address to the insurers by saying, “I assure you that this administration has and will continue to support insurance growth in Nigeria and Africa at large.”

Standing on this promise, the then Chairman Nigeria Insurers Association (NIA), Mr. Tope Smart became excited that the industry’s effort was being appreciated at the highest level of authority adding that it was a sign that federal government was beginning to accord recognition to importance of insurance .

Members of NIA were indeed not left behind in this joy on the former president’s recognition as they were spurred into action to donate to the fight against COVID-19 through their individual companies’ donations.

Insurers’ Expectation

They had expected reciprocal action from the president and obviously one  of the areas the insurers expected action was according to them on  the enforcement of all the compulsory insurances especially insurance of building and building under construction which the industry launched since 2010 but has not been enforced due to weakness on the part of legislation, yet cases of building collapses abound in the country.

Also fight against insurance certificate faking was another area of their expectation as well as government patronage of insurance.

The insurers said had this particular policy on compulsory building insurance been enforced, their premium would have surpassed its present level and they would have achieved their dream of build -ing trillion Naira market.

THISDAY findings on other major regrets of the  sector operators on the past regime points to the failure to sign the Consolidated Insurance bill into law.

Indeed every Dick and Harry in the industry regretted this act  as hopes were very high that it would be signed this time having been put into better form.

The Consolidated Insurance Bill has been on the table of Nigerian lawmakers for over 12 years waiting for passage but during the tenure of the immediate past administration it was reviewed with many grey areas corrected .It also successfully passed through readings in the upper and lower chambers only waiting of presidential endorsement.

Commenting on the efforts of the law makers in this direction former Chairman of NIA Mr. Ganiyu Musa said: “We must acknowledge the cooperation received from the Speaker, Federal House of Representatives, Hon. Femi Gbajabiamila, Chairman and members of the House Committee on Insurance and Actuarial Matters, National Insurance Commission (NAICOM) and other stakeholders in the journey thus far. We remain cautiously optimistic that the bill will be signed into law before the tenure of the 9th National Assembly lapses.”

The 2020 consolidated insurance bill when passed into law, is expected to effect a lot of changes in the insurance sector’s narrative.

Indeed, the bill holds a lot for the industry as expectations are high that the long awaited bill when signed into law would redefine the industry, strengthen it from the weaknesses of the moribund insurance Act 2003 and place the industry on the global best practices pedestal.

Insurers believe this and have thus continued to pursue the passage of the bill with vigor till the end of Buhari’s regime without achieving their target.

At one of the press briefings in Lagos, former chairman of NIA, Ganiyu Musa, said that insurers were closely monitoring developments on the Consolidated Insurance Bill and would continue to pursue same doggedly until it was finally passed into law.

Musa said, “The Association has participated in all the processes thus far and would continue to monitor developments in respect of the bill as it receives legislative attention.”

“Once the National Assembly has finished the process of reviewing the Consolidated Insurance Bill 2020 and is forwarded to me, I will speedily subject it to the necessary executive checks and sign it into law,’’ the President said, in a statement signed by presidential spokesperson, Femi Adesina.

The consolidated Insurance bill was submitted to the National Assembly in 2010 with a view to fast track an executive bill to the National Assembly that will facilitate passage of the bill into law. 

Former President of Nigerian Corporation of Registered Insurance Brokers Mr. Shola Tinubu had said that review of the insurance act was of utmost important to the insurance as the future of the industry lies much there.

According to him the prevailing law has a lot of weaknesses and can no longer drive the industry in the present century.

Former Chairman NIA and Managing Director Consolidated Hallmark Insurance, Eddie Efekoha noted that weakness of the existing law was part of the industry’s problem and has been encouraging some of the vices happening in the industry.

One of these, according to him, is the low amount of fine to be paid by offenders of some of the laws such as third party insurance or compulsory builders insurance, adding that it does not encourage compliance.

Recommendations

One of the recommendations of the industry operators in the bill is the reintroduction of Risk Based Supervision capital model, a model which the insurers described as the right capital model for the insurance industry in order to align the industry with international best practices and reposition it for accelerated growth and development.

Risk based capital is a method of measuring the minimum amount of capital appropriate for a reporting entity to support its overall business operations in consideration of its size and risk profile.

Another recommendation of insurers in the bill is N5 million fine for fake insurance certificate perpetrators.

For the current NIA chairman Mr Olusegun Omosehin, two major areas the industry expected the past administration to have addressed was insecurity in the country to reduce volume of claims coming the way of insurers and prevailing on the citizens to respect insurance laws.

The NIA Chairman said they were looking upon the incoming administration to do that.

President Chartered Insurance Institute of NIA(CIIN) Mr. Edwin Igbiti, said failure of the past regime to curtail inflation and encourage savings among the people, stalled growth of insurance.

For the Executive Secretary Nigeria Council of Registered Insurance Brokers Mr. Tope Adaramola, three key things insurance sector regretted it could not achieve during the eight years the immediate past regime lasted were giving more impetus to the insurance law on public buildings, singing of new insurance law and not achieving total enforcement of insurance of government assets across the country.

Regrets By Investors

In his reaction to failure by the former president to sign the bill, Coordinator of Progressive Shareholders Association, Boniface Okezie, in a telephone chat with THISDAY, described the failure of the former president to sign the bill as sign of ignorance of value of insurance and lack of fate on the sector.

He noted that over the years government had been indifferent to affairs of the insurance sector and has this time demonstrated that it has no regard for the sector.

“I don’t know why it was not signed may be they don’t have fate in insurance in Nigeria, they don’t want its progress they want it to remain stagnant but they should have understood that insurance  is financial power house of every economy. If government knows what it is   doing, it should not be leaving insurance behind. If  it knows the value of insurance, insurance should have been doing well if the minister of finance knows what she is  doing and the chief economic planners that surrounded the President and even NAICOM knows their job well, they should have mounted pressure on the  President  to sign that bill”, he lamented.

The present Chairman of the Nigerian Insurers Association, Mr. Segun Omosehin, had during a media briefing in Lagos, said the Consolidated Insurance Bill was going through the final legislative process to get the presidential assent.

According to him, the process for reviewing the Insurance Act 2003 has been ongoing since 2020 when the Consolidated Insurance Bill was proposed.

“Since then, we have been following through with all the processes and I am indeed delighted to inform you the Bill has been passed. It is going through the remaining legislative procedures preparatory to the Presidential assent.

“We are hopeful that it will receive speedy attention so that the industry can begin to tap into the opportunities provided by the new law,” Omosehin said.

The Senior Special Assistant to the President on National Assembly Matters (Senate), Senator Babajide Omoworare, in a statement in Abuja, said the action of the former president was in accordance with the provisions of the Acts Authentication Act Cap. A2, Laws of the Federation of Nigeria, 2004.

He listed the new laws to include the National Social Investment Programme Agency Act, National Senior Secondary Education Act and the National Social Investment Programme Agency Act, among others.

Other achievement recorded by the sector during the period was growth in insurance awareness leading to growth in turn over and profitability of the entire industry and individual firms, improved attitude to claims payment by operators and growth in total assets.