Captain Lambert Imasuen was the pilot of Bellview aircraft Boeing 737-200 until it land-crashed on October 22, 2005, killing him.

While the late Imasuen has since been buried, the family was at the National Industrial Court (NIC) sitting in Lagos in 2013, complaining that the company their son worked for and died while in active service is aloof in remunerating the family.

This is given that insurance is compulsory at the aviation sector. An aircraft cannot fly in Nigeria without having an all-inclusive insurance level. Freshly, airline operators are complaining of the high insurance costs. But aviation watchdogs are dogged that it must be done before an airline will be certified as worthy for operation in the country.

Canvassers are relaying that insurance costs are somewhat high in Nigeria and across other African countries when rated to other countries across the world, exempting countries that have public disturbance.

But upon the insurance premiums at the aviation sector, the story of late Imasuen in the hands of his once employer is infinitesimal compared to accounts of what Nigerians suffer in the hands of their insurance companies.

Recapilisation and consolidation of the sector

On September 5 2005 the recapitalisation and consolidation in the insurance industry was made known by the Federal Government (FG), and 18 months was given for compliance, starting on September 8 of that year; yet, the insurance sector is still grappling with deficiencies all around.

The novel capital support as was relayed in that year by the now ousted Coordinating Minister of Finance, Dr. Ngozi Okonjo-Iweala was believed to have laid to rest the disagreement sprawling the large-broadcasted recapitalisation application in the industry, but this is not true.

The operators in the four hub groupings of the sector were projected to raise their minimum capital foundation between N2 billion and N10 billion. That was not even as the FG accepted the National Insurance Commission’s (NAICOM) second option recommendations of N2 billion for life business, N3 billion for non-life business and N10 billion for reinsurance companies, has the industry recuperated.

Nevertheless, the Nigerian Insurers Association (NIA), the umbrella body for the underwriting companies in the year in quote, had suggested a minimum capital base of N1 billion or $7.4 million for life business and another N1 billion or $7.4 million for non-life business, with a 24-month grace period, before Okonjo-Iweala made public the recapitalisation exercise in the sector.

The then Central Bank of Nigeria (CBN) Governor, Prof. Charles Soludo, on July 6, 2004 had announced a minimum capital base of N25 billion for all banks, which was regarded as a clear disappearance for the diverse capital base for insurance firms.

Alhaji Bala Zakariyau, who’s the Managing Director and Chief Executive Officer of Niger Insurance Plc said: “The industry has been expecting a change in line with the reforms of government to increase, especially the capital base of insurance companies and I believe that individual companies will have to go to the drawing board and see how best they could continue in business.

“I think the over-all impact on the industry would be far-reaching. We are moving from a regime of below N500 million to N5 billion. I really cannot say with certainty how the industry is going to look like after the implementation of that reform, but I can certainly say that the industry is not going to be the same again.

“There is nothing wrong in this option in any sector. The option is supposed to facilitate the synergy to grow merger companies, which normally should be able to drive the entire industry. Therefore, I think it is something that we must have to work for in the interest of the insurance market.”

Challenges and fears still face the sector

Checks have it that the chief purpose for the restructuring was to have bigger and stronger players in the industry emerged with improved faculty, reinstatement of assurance of the public, increase in the intercontinental spiritedness of the local machinists.

From east, west, north and south, campaigns are ongoing to arrest the situation. Just recently, the Deputy Managing Director of Linkage Assurance Plc., Dr. Pius Apere, in a public presentation lamented his fears for the industry and the challenges facing it.

Dr. Apere said that the challenges facing the insurance industry include “human capacity development, information technology problem, risk and capital management problem, market development challenges, product pricing problem, product innovation and poor image perception problem.”

Conversely, in December last year in Abuja during an Insurance Summit, Okonjo-Iweala under the presidency of Goodluck Jonathan (9yrs after she made the recapitalisation announcement) substantiated the above, saying that lack of consumer trust, fragmentation of the industry, low enforcement of compulsory insurance policies, lack of professionalism by some agents and brokers in the industry, and a general shortage of skilled professionals in the entire industry, are questions facing the industry.

The actuarial scientist and chartered insurer Apere added that these perils have aided to the insurance industry not to be making the usual adequate contributions to the Gross Domestic Product (GDP) of the country’s economy; insurance now generates as low as less than one percent.

That was not even as the FG acknowledged the insurance sub-sector as crucial regarding making the country achieve its vision 20: 2020, has the industry been effervescent. The causative factor, Apere enthused, was that professionals are not well trained on how to carry out their professional duties to apprehend the oriented results.

Mr. Solomon Olajide, an expert said on his blog about the Vision 2020 concerning the Nigerian insurance sector: “The vision is to be the insurance industry of choice among the emerging markets, noted for high market capacity, transparency, efficiency and safety, to attain the position of one of the 20 largest insurance markets in the world by the year 2020."

The FG reformed the insurance industry through recapitalisation and consolidation to reinstate buoyancy of the public and international competitiveness among the operators. The “marginal scale” that hindered the operators in the market not to scale very well was removed, yet the insurance market has not developed properly in term of enhancement capacity in the output.

“One of the challenges facing NAICOM at the moment is how to make the shares of insurance companies more attractive to high net worth individuals and corporate bodies, due mainly to poor public perception of the industry,” a chief in the insurance sector said in his remark on the reforms.

Role of insurance and how to grow the industry

The problem of concern with insurance experts across the country is not how to build more companies, but how to turn the existing industry into money generating venture.

Journalist Sola Alabadan, who specialises on Business coverage, said in an open lecture that it was because of the essential role the insurance sector plays on the country’s economy, given that insurance offers social protection, alongside the state, and reduces pressure on public sector finance.

He tinted that the sector is key to oiling the optimum performances of other sectors; the way it obtains in the Europe and USA.

“The insurance mechanisms reduce the capital needed by firms to operate, increase investments, foster entrepreneurship by reducing uncertainty and expand available risk management options,” the business journalist said.

While presenting a keynote address at the 2015 Maiden Insurance Mega Conference in Abuja, the Commissioner for Insurance, Mr. Fola Daniel, charged the FG to incessantly see the magnitude of risk management through insurance mechanism.

“The industry has potential to be a major driver for advancing national development. As a matter of fact, for a country to develop its economic endowments, it must first have supportive insurance industry,” Daniel said.

Chris Agabi, a journalist, reported on June 5 2015 that the “No premium, no cover” regime should be taken seriously as it will have tremendous significance on the cash flow of insurance companies. He added that low awareness of the importance of insurance should be sent on errand by the authorities.

•Odimegwu Onwumere is a Poet/Writer; he writes from Rivers State. (apoet_25@yahoo.com). Tel: +2348057778358. Photo shows Commissioner for Insurance, Mr. Fola Daniel.

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