The National Insurance Commission (Naicom) said insurance companies may be restricted to float foreign subsidiaries until they have successfully established a reasonable presence in Nigeria, their primary market.
Mr Fola Daniel, commissioner for insurance, who stated this recently, said most underwriters are floating operations in other countries, when it is obvious that they have yet to capture the Nigerian insurance market.
Henceforth, he said, companies moving outside the country will be asked to open specific number of branches. This, he said, was meant to develop the insurance market in the country as the potentials there-in are yet to be fully tapped.
Daniel added that the activities of fake insurers in the sector are part of the consequences of the failure of insurance firms to expand their services to hinterland. “We are not happy with the way our insurance companies rush to float foreign subsidiaries,” he said. “This is because majority of them did not have insurable interest before establishing foreign subsidiaries.
The potential in insurance market in Nigeria is huge. These potentials are yet to be fully utilised, yet we see companies going outside Nigeria to open business. This trend must change going forward. That is the only way we can develop insurance market,” he said.
There are indication also that Naicom may compel companies to subject their subsidiaries to its regulation, in the near future, even as the commission is trying to review some sections of the insurance policy. It was also learnt that such companies may soon begin to operate a consolidated account with their foreign subsidiaries.
Meanwhile, Mr. BabajideAgbeja, managing director, Boffand Company Insurance Brokers, said that for every one insurance outfit opened outside the country, four new branches must have been opened in Nigeria.
While cautioning that necessary research must be carried out before crossing the borders and not just in a bid to toe the line of the banks, Agbeja noted that charity must start from home.
On the other hand, Mr. Val Ojumah, managing director, FBN Life Limited, said the concept of going abroad to open branches is not entirely a bad one; however there is need to develop the home front adequately.
“The focus should be to cover the whole of Nigeria very well as such companies should stop jumping out just to catch up with the Jones’s,” he said.
He stated that underwriters should focus on opening branches in Nigeria while not closing their eyes to opportunities adorning the West Africa or other part of the continent. “Insurers should concentrate a lot more on creating new products locally as well as expanding network within Nigeria,” he said.