Thomas: We Want to Increase Contributions of Insurance to GDP

Mr. Sunday Thomas
Mr. Sunday Thomas is the Director General, Nigeria Insurers Association. He spoke with journalists on developments in the industry, especially efforts to eradicate fake insurance policies through the Nigeria Insurance Industry Data Base. Ebere Nwoji was there. Excerpts:
The Nigeria Insurers Association has for some years now intensified efforts at eradicating fake insurance institutions  in the country through the use of the NIID which is electronic system of verifying genuine insurance certificates. You have achieved some level of success in the motor insurance and  we learnt you are now eyeing  marine  insurance how far have you gone  with that?

The marine module is another area of our interest.The second module of the NIID has been deployed.Companies are beginning to up load their covers under the marine module. We are engaging the stake holders. who are these stakeholders. These are the commission which is the regulator, insurance brokers and agents among others. We have been talking to the brokers seeking to get appointment with Nigerian customs, we have talked to Chartered Institute of bankers (CIBN), we have also found a platform to talk to committee of bankers on the same isue. These are some of the efforts we have put in place to eradicate fake insurance because these are the areas they operate most.

You have association of registered agents in Nigeria yet there are fake agents out there operating along with genuine ones are you not bothered about that ?

We are  more concerned about the products than the people selling them because when you talk about fake agents you call them fake agents because they sell fake products. Because a fake agent is not likely to sell genuine products.So if we are able to tackle the problem of fake insurance products then the problem of fake agents is solved  because fake agents cannot sell genuine insurance products.

Government has slated about five insurance products including the third party motor insurance and group life insurance  as compulsory insurances , these have been advertised nationwide but  till date,Nigerians are still not too eager to embrace them in terms of patronage, how do you  feel about that?

We are bothered that the compulsory insurances are not yet complied with by Nigerians but it all boils down to the issue of enforcement and that is why we are collaborating  with the law enforcement agents to ensure that enforcement is done.On the issue of motor, we are collaborating with the  Federal  Road Safety Commission , we are trying to  get across to the police  though it has been a little bit difficult.
With the marine, we have had  previous meetings with the Nigerian customs among others .
For public building,am sure that you  are aware that the commissioner has written through  the  authority of secretary  to the government  of  the federation who is the custodian of the assets of the federal government,that is a good starting point, of course there are other public buildings apart from those owned by the government and by the definition of public buildings, hotels, hospitals schools they are all categorised as public buildings and we are talking to the relevant agencies of government we are bothered about that and I believe that the steps that  we have taken so far will take us to the next level of compliance to make sure that people who have responsibility to ensure that these assets are insured are alive to their responsibility.

On the third party which is the first module of the NIA recently you said you were  talking with the Lagos  State Government  to ensure that vehicles plying in the state  have genuine insurance how far have you  gone with that?

We have had some level of discussion,  we are continuing,it is not a one  stop kind of discussion. We have started discussion with them really.
There are issues that are being sorted out between the state government and the association  but I must also tell you that to a large extent there has been implicit application of the system because in Lagos just like in any other state, if you buy a new vehicle today before they give you a new plate number  they must ask you to go and bring your insurance.That will show you the extent to which our  collaboration with relevant  agencies is working.

You mentioned that the present administration called for contribution of insurers  to the transition committee it set up,in what way do you think insurance can play a role towards development of the economy?

I must use this medium to thank the government of president Buhari for  constituting the transition committee because the committee for the very first time  has asked the industry to make submission to them and we are grateful that the submission has been made.  Am not going to make so much comment on the submissions because they are still being looked into but I must say  that for that singular  opportunity of making us to present issues that will grow the market I think it is s a great opportunity .At  the appropriate time as an association, we are going to make our statement on some of those submissions  .

Recently Mutual Benefit Assurance signed an MOU with Samsung,industry wise what is happening are we now heading to an era of smooth collaboration between the industry and other relevant sectors in the area of product distribution?

Collaboration among members of the association isn’t to kill individual company’s initiative.People who are creative in their thinking should be able to explore it think about the benefit of it but what we are saying is that your creativity should not be at total exclusion of others.There have been collaborations in the Industry. You  are aware that Mansard and MTN are doing something together, FBN and Artel they are doing something together, FBN and  Etisalat, they have something they  are doing together, Cornerstone and Airtel then Mutual Benefit and Samsung. These are creative ideals and of course  the association can at a very minimum  level support these creative initiatives and we believe that this is what  the market needs to drive it to the next level .
There is downward trend in the oil and gas price worldwide, for a country like Nigeria that depends on oil how do you think a sector like insurance can help to stabilise  the economy?

What it is telling us as a nation is that we must start looking at other sources  of revenue and the new administration in the country  knows that they are not going to hang on oil alone as a major source of income for the economy. So I want to believe that there must have been policies in place that have been  established to generate additional income from other  sources and what we are trying to do as part of the financial services sector is that  we want insurance to increase  in its contribution to the GDP and that is why you have all these initiatives and if we are able to do that we will add  to the employment status of this country, more people  will be engaged in employment, the income generated will be invested which will create further markets for insurance and other businesses.Of course we know that once we are able to give confidence to the market, people will be able to think out of the box they will be Able to take risks to go into ventures they will be able  to invest knowing fully well that insurance is there to back them up. These are some of the contributions  we are trying to make and am sure we are on course to achieve all of these.

You will notice that  the industry regulator and operators have been making preparations to attain this height through innovations and developments they have brought to bear in the industry in the past eight years.
Some of these developments are  : Enforcement of the compulsory insurances through the Market  Development and Restructuring Initiatives (MDRI) of the regulator;

Sustenance, improvement and  establishment of  Alternative Dispute Resolution  Mechanism in the industry; Elimination of huge outstanding premium with the “No Premium No Cover” Policy directive;
Expansion in the local capacity for Oil and Gas insurance business with the establishment of the EAIPN;

Development of insurance market for the low income group with the introduction of Micro insurance
Establishment of the Nigerian Insurance Industry Database (NIID) for effective verification of insurance policies Issuance of Corporate governance guidelines to establish sustainable transparency and accountability;

Promoting effective distribution of insurance products through bancassurance; Creation of a formidable regulatory system that has to some extent earned the respect of the operators
as well as Institution  in the industry  of stability and cooperation free of avoidable conflicts  among others.