Recapitalisation will Reposition Insurance Sector to Support Economy – NAICOM
The recapitalisation of insurance sector is aimed at repositioning the sector to contribute to the growth of the nation’s economy, the Deputy Commissioner for Insurance (Technical) National Insurance Commission (NAICOM), Sunday Thomas, who stood for the Commissioner for Insurance, has said.
Thomas said this while making his remarks at the two days seminar organised by the Commission for insurance correspondents in Ijebu Ode, Ogun State.
He said the Commission has vowed to prosecute as never before the recapitalization process of insurance companies to ensure that the sector is positioned to support economic development of the country.
“We want to prosecute this recapitalization as one that has never been done before; we want this to ensure that we retain our businesses, turn the image of our market around,” he said.
Thomas noted that even though operators may not have the wherewithal for the recapitalization of their respective companies, but the onus lies on the regulator to set the standards that will strengthen the insurance companies’ capacities and place them in a position to undertake insurance businesses.
He explained that the process was meant to enable the sector retain insurance businesses instead of allowing it to go outside the country; turn the image of the insurance market, strengthen financial base of the companies, increase the sector’s contributions to gross domestic product of the country, among other benefits.
“The whole idea of this recapitalisation exercise is to have an industry that is strong, that is diligent in prosecution of its assignment, that is highly liquid in terms of being responsible and prompts in claims settlement, that is solid in terms of assets, that is visible in terms of retaining businesses in our environment and at the end of it is able to add value to our economy.”
“We have the mandate to ensure that the recapitalization throws up more solid companies. Our hands are open to welcome investors in new companies or existing companies,” he said.
He emphasised that NAICOM targets at having companies and insurance sector that would support the government to build a viable economy.
He called on all the stakeholders in the industry to embrace the exercise for growth of the industry, adding that the commission is engaging other regulators for success of the exercise.
“We are engaging other regulators for cooperation for the success of the exercise. Our arms are open to welcome investors either to existing companies or a totally new company.
Presenting the theme paper, Recapitalization Road Map: Implementation, Expectations and Benefits”, the NAICOM Director (Policy and Regulations), Mr. Pius Agboola, recalled previous attempts of recapitalizing insurance companies to include that of 2005/2007 as well as the attempt done to introduce the Tier Based Recapitalization process in 2012/2014.
He highlighted the benefits of the recapitalization including the need for capital restructuring, improvement in the liquidity position of the insurance underwriters.
He noted that insurance industry life cycle is still at early growth stage which needed to be explored; and need for emergence of holding companies, conglomerates and consolidation of businesses.
