Insurers in the Economic Community of West African States have been introducing initiatives aimed at boosting business synergies in the region in recent years.
Nigerian insurers, who are part of these initiatives, are also getting the backing of the Nigerian Federal Government, to make the country more relevant in the international insurance sphere.
According to operators and regulators, improved business dealings will help to grow capacity, reduce capital flight and retain more business in the region.
The Nigerian Commissioner for Insurance, Alhaji Mohammed Kari, said that by all standards, the Nigerian market deserves to be reckoned with in the international insurance scene but added that this could not be achieved by operating in uncoordinated silos.
“We have to wake up, sort ourselves out and be ready to play our role, at least in the sub-region,” he said.
For operators that are members of the West African Insurance Companies Association, (WAICA) he noted that it was common knowledge that the integration of member countries into a single market was on the front burner.
He said that both the WAICA and the newly formed West Africa Insurance Supervisors Association (WAISA) have resolved to work with the ECOWAS and West African Monetary Institute to fast track the realization of this integration.
“This, in my opinion, is enough good reason to recapitalise or consolidate to benefit from this huge opportunity when it arises, but to really benefit from international opportunities we have to organise our local WAICA chapter which would be the fulcrum of this project,” he said.
Disclosing that in September, the Federal Executive Council approved Nigeria’s membership of the African Trade Insurance Agency, Kari said the membership provided an excellent opportunity for the industry to be involved in a class of international business.
He said that the objectives of regional integration range from political, social, developmental, to economic factors.
“For the West African insurance sector, the objectives would include to accelerate economic growth and development by coordinating and regulating the economic and trade relations of member states; to promote common understanding and cooperation among the nationals of partner states; and to promote the development of insurance and reinsurance in the region, in line with the aspirations of member countries.
“Others are to promote regional cooperation in all areas of insurance and reinsurance; to establish statistical and information centres of insurance and reinsurance in the region; and to provide industry information to the insurance supervisory authorities of member countries upon which legislation to be made or reviewed could be based.”
The commissioner said that West African insurers could achieve uniform regional compliance through development of appropriate regulatory framework in conformity with International Association of Insurance Supervisors core principles, which would promote uniform laws and regulations within the region.
He also said that this could be achieved by setting standards for the region and enforcing the adoption of Insurance Core Principles by all countries as operational and supervisory standards might just be the beginning.
Kari observed that information exchange in the West African insurance market was very weak and needed to be strengthened significantly in the face of expanding cross-border insurance businesses.
The Nigerian Minister of Finance, Mrs. Kemi Adeosun, last year signed a multilateral memorandum of understanding during the formation of the West African Insurance Supervisors Association between Nigeria’s insurance regulator and its counterparts in other West African countries.
Describing it as a positive development in sub-regional cooperation, Adeosun said that collaboration on the part of regulators was not only desirable but necessary.
“As your companies grow across national borders, it is important to ensure the regulators share information on these companies and their operations to safeguard reputation and protect against the infringement of international laws such as the Anti-Money Laundering and Combating the Financing of Terrorism regulation,” she said.
While speaking on WAICA, she said that it was important for the underwriters to reflect on the ideals of the founding fathers of the association and consistently assess performance to identify where remedial action may be required.
According to her, a review of the objectives will indicate success as far as regional collaboration is concerned.
She said that the achievement of the West African Insurance Institute was a great example of this.
Adeosun said, “The institute has survived war, insurrection and uncertainty to continue to exist. I was told it is now fully established in Banjul, the Gambia after its move from Monrovia, Liberia. Not only has it continued to excel in its educational endeavour, I learnt it has even produced a president of a great country in our sub-region.”
The minister said another notable achievement was the establishment of the WAICA Reinsurance Corporation Plc.
She said that the resilience and tenacity displayed toward the formation of the company was commendable.
The company, she added, had significantly boosted reinsurance capacity in the sub-region.
She said that despite the achievements, it was common knowledge that there was still a reinsurance capacity gap in the sub region.
The minister challenged the various regulators to create the appropriate regulatory framework and incentives to attract the desired capacity to the sub-region.
The Managing Director, WAICA Re, Mr. Abiola Ekundayo, said that WAICA Re was a sub-regional reinsurance company with headquarters in Freetown, Seirrra Leone.
He explained that it was owned by five English speaking countries in West Africa namely Nigeria, Ghana, Seirra Leone, Liberia and the Gambia.
According to him, the company that got its operational licence in 2011 now does all classes of business in Africa and beyond.
The Chairman, Nigerian Insurers Association, Mr. Eddie Efekoha, said regulation of insurance business in the West Africa sub region was largely underdeveloped.
“Regional business walls in the supply of insurance products are increasingly being broken down, institutions and individuals may want to leverage arbitrage opportunities hence the need for regulation,” he said.
Efeoha said to increase trans-border operations within the sub region, there was need for harmonisation of regulatory framework; need for adjudication supervision among national regulators; need to have regional insurance database for research and development and also to need to create standard for insurance market across member states in West Africa.
He also said that it was necessary to promote technical knowledge sharing among member states’ underwriter and regulators and also to standardise certain insurance product packages and benefits.
This article was earlier published here