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Finance Minister Calls For Regulatory Framework For Insurtech Companies

The Minister of Finance, Budget and Planning, Zainab Ahmed, has urged insurance operators to address the low contribution of the sector to the country’s Gross Domestic Product.

While commissioning the National Insurance Commission’s portal in Abuja, Ahmed noted that the sector, which had huge potential, contributed just 0.88 per cent to the country’s GDP in 2021.

She said, “The current insurance penetration, a measure of the contribution of insurance to the Gross Domestic Product of 0.88 per cent for 2021, is very low. This indicates a low insurance sector development contribution to the national economy.

“However, this also shows that there are abounding opportunities for growth in the market. There is a need, therefore, to develop new innovative products based on data and customer preferences and introduction of new channels of distribution beyond the traditional channels to reach new segments of the market.”

A statement from NAICOM said while commissioning of the portal, she said it should serve as a springboard for industry-wide adoption of technology and innovation for efficient and effective service delivery, ease of transacting business, and customer experience and satisfaction.

While noting that prompt claims payment was the best advertisement for the industry, she urged the operators to ensure that all genuine claims that had been duly verified were paid promptly.

The minister said, “Dwindling government revenue profile demands that the commission must look into ways of increasing its revenue through the use of technology and the portal in particular.

“I urge the commission to ensure the portal is connected to other government databases like the National Identity Management Commission NIN Database, Nigeria Immigration Service Passport Database, Nigeria Integrated Customs Information system, FRSC’s National Vehicle Identification System, the National Vehicle Registry, State Licensing Databases among others, in order to provide value-added services to all Insurance Industry stakeholders and enhance revenue generation.

“In addition, the NAICOM portal must also serve as the central database and sole repository of all insurance data connected to government databases in the country.”

The Commissioner for Insurance, Mr Fola Daniel, said the portal was one of the initiatives of NAICOM to deepen the insurance market and increase penetration to the level consistent with the nation’s economy.

He said, “Prior to this development, the processing of applications required that applicants physically drop off their applications at the commission with the attendant challenges of delays in processing times, wasted manpower hours due to back-and-forth in application processing as well as ineffective application tracking system.

“Honourable Minister, permit me to state that with the completion of the portal, there will be process efficiency and faster processing time as applications and supporting documents are submitted online. Applicant’s account is updated with the status of the application as it progresses and there is effective real-time communication between NAICOM and the applicant.”

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