Tony Elumelu, the Chairman of Heirs Holdings, has advocated for the Nigerian insurance sector to embrace the influx of young, brilliant, and innovative talent.
He urged the National Insurance Commission (NAICOM) to limit stringent experience requirements to technical areas only.
At the ongoing National Insurance Conference 2023 in Abuja, with the theme “Redefining Safety: Insurance Solutions for Public Buildings and Buildings Under Construction,” Elumelu proposed a substantial increase in the capital base for consolidated insurance companies operating in Nigeria.
He recommended a N50 billion capital base, with N30 billion allocated to general business and N20 billion to life businesses.
Elumelu emphasized the urgency of recapitalizing insurance firms in Nigeria, pointing out that the current capital base of N8 billion for life and N10 billion for general insurance is inadequate.
He called for a reevaluation of the differentiation in insurance authorizations and licenses between life and non-life segments, suggesting that consolidated operators should meet a N50 billion capital requirement. He asserted, “Let us use regulation to shape behavior and enforce compliance.”
Elumelu stressed the need to allow bright, innovative minds to enter the insurance sector in Nigeria, encouraging the removal of barriers that hinder the involvement of young talent.
He highlighted the importance of creating an enabling environment, stating, “With the right enabling environment, we will witness the transformation of the Nigerian insurance sector.”
Elumelu also recommended a N1 billion recapitalization requirement for brokers, taking into account the currency devaluation, which translates to USD 8 million to USD 10 million capital requirements for insurance companies in Africa’s largest economy. He expressed the need for the insurance industry to have the financial strength to handle more complex transactions and extend its reach.
Elumelu urged NAICOM to focus on substantial regulatory actions and prioritize shaping the sector rather than approving advertisements. He proposed that the industry should contribute 0.5 percent of its total revenue to drive awareness for five years, to be professionally administered by the leadership of Nigeria Insurers Association (NIA).
In conclusion, Elumelu called for the elimination of stifling policies, roadblocks, and complacency in the insurance system to foster innovation and provide accessible insurance as a fundamental right to secure the future, all within a regulatory framework that serves both clients and promotes industry growth.
The Commissioner for Insurance, Sunday Thomas, in his welcome remarks, highlighted the Commission’s commitment to fostering the development of the Nigerian insurance industry, aligning it with the nation’s economy.
He outlined initiatives under the NAICOM Strategic Plan 2021–2023 aimed at enhancing the safety and soundness of the Nigerian insurance sector, aligning supervisory practices with global standards, and implementing digital solutions for improved regulation.