Business
‘Market Initiative Dominates Insurance Industry’
One of the major issues that dominated the Nigerian insurance industry in 2011 was the success of Market Development and Restructuring Initiatives (MDRI).
MDRI was launched in July 31, 2009 as a medium-term plan (2009 – 2012) of installing the first phase of the necessary reforms in the industry.
It bordered on industry capacity, market efficiency and consumer protection, among others.
It aims to deepen and grow the insurance market and move the industry’s gross premium income from N164 billion in 2008 to N1 trillion in 2012.
It is also to achieve aggressive marketing of the five compulsory insurance products and re-introduce and institute the Agency System.
The five compulsory insurance products are the Group life Insurance, Healthcare Professional Indemnity Insurance, Builders Liability Insurance, Occupiers Liability Insurance and Motor Vehicle Third Party Insurance.
According to Section 9 (3) of the Pension Act 2004, the Group Life Insurance is for all public and private sector organisations with more than four employees.
The Healthcare Professional Liability Insurance, according to Section 45 of the National Health Insurance Scheme Act 1999, is for medical institutions and all professionals working there.
Section 64 of the Insurance Act 2003 prescribes the Builders Liability Insurance for owners and contractors of buildings of more than two floors under construction.
The Occupiers Liability Insurance is for business and office premises – government, corporate, private, hotels, guest houses, hostels and residential estates.
The Commissioner for Insurance in NAICOM, Mr Fola Daniel, said the industry had the capacity of generating the estimated one trillion naira under MDRI with only motor third party policy alone.
“Looking at the potentials of the industry, it has the capacity to generate N1 trillion using motor third party alone.
“If 10 per cent of the more than 10 million houses and buildings are insured, the projection will be made,” he said.
Daniel said that the commission had rolled out policies and guidelines for the MDRI, but said that its actualisation depended solely on the operators.
The Managing Director of Sovereign Trust Insurance, Mr Wale Onaolapo, said that operators were beginning to reap the benefits of the MDRI.