Amidst Key Stakeholders, Elumelu Calls for Robust Recapitalization of Nigeria’s Insurance Sector”

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In a compelling address at the 2023 National Insurance Conference, Tony Elumelu, the Chairman of United Bank for Africa Group, Heirs Holdings Group, Heirs Insurance Group, and Founder of The Tony Elumelu Foundation, outlined a series of transformative proposals to enhance Nigeria’s insurance sector. These recommendations aim to address the sector’s challenges, improve its financial health, and ultimately boost insurance penetration.

Increased Capital Base for Insurance Companies: Elumelu proposed raising the capital requirements for insurance companies, suggesting that Life insurance companies should have a minimum capital base of N20 billion, while Non-life insurance companies should have N30 billion. This move is expected to fortify the financial strength of insurers, enabling them to undertake more substantial and complex insurance transactions.

Elimination of Dichotomy in Insurance Authorizations: He called for the removal of the distinction between Life and Non-life insurance authorizations, advocating for consolidated operators to maintain a minimum capital base of N50 billion. This measure aims to streamline the sector and encourage insurers to offer a broader range of services and products.

Regulatory Focus on Substance: Elumelu urged the National Insurance Commission (NAICOM) to prioritize substantive regulatory matters, emphasizing the need to reduce approvals for advertisements and focus more on critical regulatory aspects. This shift in focus would enable more efficient use of resources and financial savings for the benefit of taxpayers.

Industry-Wide Contribution for Awareness: All insurance companies, according to Elumelu’s proposal, should be required to contribute 0.5% of their total revenue towards industry-wide awareness campaigns for five years. The administration of this contribution would be overseen by the Nigerian Insurers Association (NIA), ensuring a professional and organized approach to fostering awareness.

Increased Capital Base for Insurance Brokers: Elumelu recommended that the capital base for insurance brokers be elevated to N1 billion. This would help strengthen the financial stability and credibility of insurance brokerage firms.

Opening Opportunities for Young Talent: To infuse innovation and energy into the insurance sector, Elumelu called for greater openness to young and innovative minds, even limiting years of experience requirements to technical roles. This would make the industry more attractive to young professionals and foster growth and dynamism.

In his words: The suggested recapitalization of the insurance sector would provide the industry with the financial strength required for handling complex transactions and extending its reach, ultimately promoting the sector’s growth in Nigeria and beyond.

Elumelu concluded by emphasizing the vital role of regulators and the government in making insurance accessible to every Nigerian citizen. He expressed concern over Nigeria’s low insurance penetration, highlighting the financial uncertainties faced by uninsured individuals and their impact on families and communities.

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