Guinea Chair says Nigerian insurance industry needs government intervention

Owing to the continuous rise in inflation, Chairman of the newly constituted Board of Directors, Guinea Insurance Plc, Mr Godson Ugochukwu, has called on President Muhamodu Buhari to provide intervention fund for the Nigeria insurance industry.

Ugochukwu, who disclosed this on Wednesday, while briefing journalists in Lagos, said that though insurance business in Nigeria was an extremely worthwhile venture but required government’s intervention especially at a time when the country’s current economic crisis occasioned by high inflation and low disposable income, which have significantly impacted on the performance of insurance practitioners in recent time.

“When economies experience downturn, the first casualty is insurance. We have seen a lot of reduction in interest for insurance as a lot of people who naturally would buy insurance, would regard it as a secondary issue due to the fact that insurance business thrives on the back of the economy” he said.

In the same vein, the Chairman called on government to provide the necessary regulatory mechanisms, conducive business environments and ensure full enforcement of compulsory insurances in Nigeria as it would not only drive the growth of the sector but also, contribute significantly to the growth of the country.

He, however, expressed regret on government’s lack of political will to enforce certain laws and policies which he said were serious headwinds that have slowed down the growth of the industry.

Meanwhile, Mr Godson Ugochukwu, assured the firm’s customers that the newly constituted Board of Directors have positioned themselves to go with the current tide of structural and operational changes in the insurance industry.

In his word, “There has been a renewed focus on corporate governance and the Board has spent a significant proportion of its time examining and strengthening the operational processes throughout the company. Having a solid corporate governance framework is key to rebuilding trust and transparency with all stakeholders.

“Contrary to fears that the decline in national revenue occasioned by the fall in oil price and depreciation in the naira value, would spell hardship for insurance industry as expressed recently by insurance practitioners, I am of the belief that the insurance sector has the potential to grow volumes and enhance shareholders’ value but it requires insurance companies to devise means of taking advantage of growth opportunities around them because doing so, would not only increase its penetration but also, enhance awareness and the sector’s contribution to GDP.

“As a company destined for greatness and propelled by a Board of Directors and Management team with an insatiable thirst for success, we keep the faith that there are no limits, there are only plateaus. We have, therefore, taken steps to ensure that our greatest asset – our people are enhanced through human capital investment. I am pleased to say, that in such a short while, we are beginning to experience growth in our business. I, therefore, make bold to say that the future is indeed very promising.”

NEWSVERGE reports that the former Chairman and four Directors from the Board of the underwriting company were retired owing to the implementation of the Code of Governance of the National Insurance Commission (NAICOM) in 20150, as stipulated in section 5.04 (vii) of 2009.

The implementation of Corporate Governance Code of NAICOM was aimed at ensuring sound business practice, effective compliance with all statutory requirements.

The erstwhile Board members have served over nine years.

It is also worthy of note that the insurance sector in Nigeria is confronted with numerous challenges: the economic downturn, low level of coverage for insurance services in the country with approximately 1.5 million insurance policyholders out of the over 170 million population patronising insurance services and products. This low penetration rate demonstrates that there is a dearth in the level of acceptance for insurance products among the people and institutional clients.