THE IMPACT OF NATIONAL INSURANCE COMMISSION IN THE PROMOTION OF NIGERIA INSURANCE MARKET OPPORTUNITY
1.1 Background of the Study
The contribution of insurance to economic growth is huge and unlimited. Insurance is of great importance to a modern society and in fact, economic growth is characterized by the soundness of a nation’s insurance market. Insurance promotes financial stability and reduces anxiety; it can substitute for government security programmes, facilitates trade and commerce; mobilizes saves; enables risk to be managed more efficiently; encourages loss mitigation and fosters a more efficient capital allocation.
The Nigerian insurance market presents vast opportunities for citizens, the industry, the financial services sector and the economy. But the market is not efficient, lacks capacity of consumers trust, expert say the net effect is that it does not grow and no meaningful contribution to the macro-economic indicators.
The insurance gap in Nigeria is presently put at 94 percent which implies that less tham 10 percent of Nigerians have any forms of insurance. The wide gap is attributable to public inertia and apathy. The insurance density on the other hand is put at N875,00, this means that Nigerians on the average spend les spend less than N1,000 annul on insurance presently, the total industry income is about N170 billion.
According to NAICOM, for the set target to be achieved, the insurance gap must be lowered to a minimum of 70 percent, with 2012 as the target data. Globally, the world insured premium income from 2006-2008 as presented by sigma publication shows that life insurance has contributed more premiums, an average of 58.86 percent than non-life business an average of 41.14%. However the reverse is the case in Nigeria which contributes 17.90 percent for life as against 82.10 percent for non-life.
Nevertheless conscious efforts were made by successive government and the regulation to improve the insurance market over the years “one of such effect was the market consolidation exercise that started in 2005 culminating in increase of industry’s minimum capital requirements.
With this the research focused on the insurance industry market the problems prospect and the role of the national insurance commission in promoting insurance market in Nigeria.
1.2 Statement of Problem
Low level of regulatory compliance by the insurance practitioners and the insuring public.
Absence of new products and poor image of the industry.
Government policy inconsistency and weak regulatory measures.
Delayed settlement of genuine claims and delays remittance of premium by intermediaries.