Most Nigerians don’t understand insurance –Daniel

Mr Fola Daniel
Mr. Fola Daniel ended his tenure as the Commissioner for Insurance, National Insurance Commission in July. In this interview with NIKE POPOOLA, he speaks on some of his policies and challenges
Three Nigerian insurance companies were recently named among nine best underwriting firms by the African Insurance Organisation. What would you say made the country’s industry to stand out on the continent?
The Nigerian insurance industry is the most dynamic in Africa. There is no other country that has representatives in other markets as we have in Nigeria. The Nigerian insurance industry is presently represented in nine other countries outside Nigeria and that is a big one. Not even North Africa can boast of that. So, we are happy that the insurance companies are not just expanding here but they are expanding their tentacles outside Nigeria.
No premium no cover law has made impact and other African countries are adopting this initiative. What prompted you to enforce this law?
We decided to enforce it because the outstanding debt was threatening to destroy the market. When insurance companies do business of N5bn and they collect only half a billion, naturally, if you don’t address it, if there is a claim, they won’t have money to pay. If you are supposed to collect N500 and you collect only N50, how can you pay claim of N100. That is why it became necessary to evoke that law so that people who pay for their insurance can sleep and relax expecting to get paid when insured event happens.
How would you assess the implementation of the Market Development and Restructuring Initiative?
Under the MDRI programme, I can say that insurance awareness has increased tremendously; people are becoming aware. We are also having stakeholders’ collaboration and cooperation, that is why the customs are talking about marine insurance; the fire service is talking about fire insurance, and the Nigerian Police and Federal Road Safety Corps are talking about joining hands to enforce motor insurance. So, the awareness is increasing.
What would you say were your greatest achievements as Commissioner for Insurance for eight years?
I would not want to talk about my achievements, but what I want to say is that I have been privileged to be Commissioner for Insurance for eight years. I met an industry that was in chaos in 2007 but today, the industry cannot be said to be in chaos. Though we have not arrived at our desired destination, our desired destination is to be the biggest insurance market in Africa but we are not there yet. We are on the path of becoming an insurance market that can be reckoned with, trusted, responsive and responsible.
What did you see as the biggest challenge during your tenure?
The biggest challenge of any insurance commissioner remains the low awareness level of the Nigerian populace. Our financial literacy is still very low and intolerable. Most Nigerians don’t understand insurance. Some do not even understand banking operations well. When you look at the capital market, people don’t know about stock trade. When you look at insurance, that is completely alien. The level of awareness is the biggest challenge but by God’s grace, I think we are making progress. Nigerians are becoming more and more aware of insurance mechanism and they are embracing it. People did not trust insurance industry before but we are able to deepen trust through the sanity that we have tried to bring to the insurance industry.
When you took over as NAICOM boss, there were court cases between the regulated entities and the commission. How were you able to resolve these issues and stopped new cases from coming up?
I think we must give all glory to God. The situation the insurance industry was at that time was quite sad when you find regulated entities taking the regulator to court and vise versa. It was very unpleasant, but it was not too difficult using the elders of note in the industry. Prof. Joe Irukwu, I must mention specifically was a very big factor in being able to settle all these matters out of court.
NAICOM took over the management of some insurance companies. Did you receive any threat for this action?
Of course, we took over some companies and dissolved some managements; I can say to you that we did not receive thank you cards from them for obvious reasons .But as for threats, I will not talk about that because the Lord has been my shepherd.
What do you feel you could have done as commissioner that you did not do?
I did not come with 101 agenda; looking back, I have no regret. Everything we have been able to achieve is in accord with what we planned to do and God has been very kind. So, I do not think that I left anything that was on my agenda undone. However, I want to see more people buy insurance; I want to see deeper penetration; I want to see insurance being bought at the grass roots and that will continue to be a dream for any Commissioner for Insurance in the whole of Africa because insurance awareness in the whole of Africa is very small. If you want to aggregate the average, it is less than 30 per cent in the whole of Africa. So the dream of any commissioner will be to have more people.
What should be done to ensure that awareness campaign is sustained?
Unless people are aware, they will not buy. People spend their one naira because there is a reason to spend it. Unless you see value in insurance, you are not going to buy; it all boils down to awareness. After awareness, the insurance industry needs to have appropriate products because if I am aware and you are asking me to buy house insurance, I don’t own a house, that is not an appropriate product for me, but you know that every one of us has a risk. For instance, personal accident or anything that people thing can relate with; things that people can afford to buy. It is of no use asking an okada rider to take an aviation insurance because it is of no interest to him. There must be appropriate products for different segments of the society. There must be affordable products that relate with the earning capacity of prospective buyers of insurance.
What advice do you have for your successor?
My word of advice for my successor is to keep the tempo of regulation. I will remind my successor that the World Bank and the IMF believe that the insurance industry can be regulated higher; the tempo of regulation can be increased not lower. I will urge my successor to use that as a reference point, as a reminder that the tempo of regulation must not be lowered, it needs to be increased. Insurance is a regulated business and people have choices. People can chose to do a business that is not regulated. If you are selling vegetable in the market, you are not subjected to regulation; if you are selling rice and beans, no regulation as such but insurance is a regulated entity and anyone that decides to do insurance business must be prepared for regulation. He should not expect regulatory subsidy; it is not going to happen.
What is your next plan?
After this job, I will go to the warm embrace of my wife and children; I will sit down and thank God. My tomorrow is in the hand of God.
Source: Punch