BY NKECHI NAECHE-ESEZOBOR—Tony Elumelu, Chairman, Heirs Insurance Group on Monday proposed N50 billion as capital base for insurance firms operating in Nigeria.
Elumelu, also founder, Tony Elumelu Foundation, said this at the ongoing National Insurance Conference 2023, organized by National Insurance Commission (NAICOM) with the theme: Redefining Safety: Insurance Solutions For Public Buildings and building under construction, held today at Abuja Continental Hotel, Abuja.
He said it had become necessary to recapitalise the insurance industry firms in in the country as N8billion capital base for life and N10billion for general is inadequate.
“We should increase the capital base of Insurance Companies to N20Billion for Life and N30Billion for Non-life respectively.
He also called for review of the dichotomy in Insurance authorisations/licences between life and non-life, adding that consolidated operators should have N50billion. “Let us use regulation to shape behaviour and enforce compliance.”
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He also recommend N1billion recapitalization for brokers, while noting that with “the devaluation of the currency, you are talking about USD 8 million, USD10 million capital requirements for an insurance company in Africa’s largest economy.
“How can an industry intended to ‘insure’ and mitigate the risks associated with economic growth of a country have such low capital requirements.
“Let me be clear, recapitalisation is not about increasing the barriers to entry into the industry. Gatekeeping is not the objective here.
“But we must ensure that the sector has the financial muscle and backbone to handle more complex insurance transactions whilst extending reach. That is the only way the industry can scale and expand operations out of Nigeria and into Africa!.”
He also called on the commission to focus on substance and things that will shape the sector and stop approving adverts.
He said the commission should use the time for approving adverts for more important aspects of regulation and save taxpayers money for more catalytic actions.
He also recommended that the industry should mandatorily contribute 0.5% of total revenue to drive industry awareness for 5 years, noting that the leadership of Nigeria insurers Associations (NIA ) should administer this initiative professionally.
