COMMISSIONER FOR INSURANCE, NATIONAL INSURANCE COMMISSION, MR FOLA DANIEL (L), WITH THE CHIEF TECHNICAL DVISER, MICRO-INSURANCE ILO/UNCDF, MR YOSEPH ASEFFA, AT A STAKEHOLDERS’ WORKSHOP ON MICRO-INSURANCE IN ABUJA
Insurance operators in West African countries have agreed to harmonise their operations in a bid to boost the business of underwriting in the region.
Experts who spoke at the West African Insurance Companies Association (Waica) Educational conference in Lagos last week said, such harmonisation would allow the West African Insurance industry deepen its market penetration.
With abundance of insurance potentials in West African market, they believe such harmonisation becomes imperative for insurance growth and development.
On his part, Mr. Fola Daniel, commissioner for insurance (Nigeria) said, there is the need for integration and harmonisation of insurance industry in the Waica member states.
Daniel, who was represented by Mr. Thompson Barineka, director of Inspectorate, Naicom stated that, such integration would broaden and deepen insurance financial links within the sub-region, whether through market-driven or institutionalised processes.
Such integration, he disclosed, requires the elimination of barriers to cross-border investments and differential treatment of foreign investors within the region. This, he added, also extends to harmonising legislations, policies and institutions, which over time can enable the national financial markets to effectively function as one.
Stating that the West African financial markets are small and fragmented, he noted that, consolidating markets through integration and harmonisation could yield several benefits such as; bringing together scarce savings, viable investment projects and financial infrastructure.
This, he said, could equally increase the number of financial institutions and instruments; increase competition and innovation as well as increase underwriting capacity of insurance companies in the sub-region.
Though it would enhance reinsurance capacity, thereby reducing capital flight, he indicated that it would also reduce inefficiencies in lending, given a wider pool of bankable projects and expand opportunities for risk diversification.
In addition, integration and harmonisation of the insurance industry in West Africa could help improve regulatory and supervisory bodies, insulate insurance institutions from domestic excesses, harmonise regional laws and institutions, and create additional opportunities for learning, Daniel pointed out.
Speaking on the challenges, he said; “To achieve an integrated and harmonised insurance industry in West Africa, a number of issues pose some challenges, but there are also huge opportunities. The key challenges include: inadequate and poor regional infrastructure network, weak institutions and human capacity, and insecurity and political instability. Other challenges are diversity across the economies and divergent country attitudes towards regional integration.”
He however, stressed that the availability of abundant natural resources and a growing population of the middle and upper class of the society, offers opportunities for insurance business.
Furthermore, Daniel stressed that, enabling the flow of capital, management know-how and technologies within the sub-region, and between the sub-region and the rest of the continent, is a priority outcome of the sub-regional integration process.
To Daniel, “the pattern of intra-regional investment, led by Nigerian private insurance companies operating across the sub-regional and East African market, of the emerging footprint of pan-African financial institutions and increasing presence and interest of investors particularly from other African countries in the Nigerian Insurance Industry, are a positive development, which should be further encouraged.”
He believes insurance still remains the key driver in the economies of countries, and the industry has remain a 3rd-level player in the financial services sector of West African States.
He therefore, appealed to operators to kick-start the process of integrating the WAMZ insurance sector, by developing a roadmap to drive integration in insurance sector in the zone and streamlining insurance integration efforts in the sub-region.
Operators are also expected to propose the constitution of a council to drive the integration of insurance and propose the establishment of a technical committee to serve as an advisory body to the council on insurance integration in the zone, he said.
While calling on insurance industries to leverage and key into opportunities, he enjoined them to work together to develop the needed products and services as well as build underwriting capacity that will accommodate big risks, and halt capital flight currently being experienced, particularly in the oil and gas business.
Speaking earlier, Mr. William Cooker, secretary general, WAICA urged operators to create products and services that will be problem-solving, so that more people can, willingly, subscribe to insurance services.
“As more investors come into the industry, there is the need to develop our products and personnel to cater for the needs of our customers. Moreover, the local content act must be abided by. Our industry has huge potentials, to which we should pursue to our own advantage,” he disclosed.
Speaking in the same vein, Mr. Ezekiel Ekundayo, managing director Waica Reinsurance Corporation Plc, stressed that, to move the industry forward and achieve further integration, the relevant stakeholders should work with insurance regulators to define the framework and harmonise insurance laws and practice of the sub region.
He implored them to promote a platform for following up and controlling the insurance industry, calling on practitioners to create more awareness, be prompt in payment of genuine claims as well as improve the image of the industry.
Ekundayo appealed to underwriters in West African States to invest in Waica Re to make it strong like the other regional reinsurance companies.
-@Business World
© anu for Royal Times of Nigeria Newspaper, 2013. |
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