In a bid to ensure that the insurance industry recapitalisation exercise is actualized, the Nigeria Stock Exchange (NSE) has said it would support insurance operators in their bid to meet the new capital requirement stipulated by the National Insurance Commission (NAICOM).
The Chief Executive Officer, NSE, Oscar Onyema, gave the assurance at the NSE insurance sector forum organized by the NSE in collaboration with Coronation Merchant Bank and Cordros Capital in Lagos,.He described the insurance sector as an important sector of the economy that is too significant to be neglected.
Onyema however noted that, the challenges faced by operators in the sector are quite enormous as many licensed insurers are largely undercapitalized, thus limiting their ability to take on big ticket in-country risks, as is often required in the oil and gas, marine and aviation sectors.
He added that the insurance industry presents perhaps the most remarkable investment case of any industry in Nigeria and despite present challenges, it offers numerous opportunities for enhancing the economic fortunes of the country and foreign investors seeing these opportunities are acting on it accordingly.
He said, “An estimated capital of N200 billion is expected to be injected into the Nigerian insurance industry post-recapitalization with a 400 per cent increase in the minimum capital required for life, 333 per cent for non-life, 360 per cent for composite and 200 per cent for re-insurance.
“While I am optimistic that this directive by the industry regulator would enhance performance, bring about efficiency, innovation and profitability, the industry needs significant support to unleash its growth potential.
“With the ongoing recapitalisation exercise, we will encourage the insurance operators by providing a special window to fast-track the approval process, provided the operators have demonstrated high standards of corporate governance, deep social impact, high regulatory compliance and enhanced returns for their shareholders and post recapitalisation, we look forward to having our first insurance company listed on the premium board of the NSE,” he stated.
On her part, the Director General of Nigerian Insurance Association (NIA), Mrs. Yetunde Ilori, called on the insurance industry regulator; the National Insurance Commission (NAICOM), to enact laws that will indemnify local insurers from being total acquired by the foreign ones.
“My concern is that recapitalisation has opened door to more foreign players and investors, thus, I want to seek policies protecting the local insurers and investors.”