Nairametrics|The National Insurance Commission (NAICOM) has asked shareholders of insurance companies to hold them accountable, for late filing of results and other corporate governance issues. This is just half of the equation. Shareholders are in many cases uninformed and are in the minority, especially with insurance firms that are run by their founders.
The insurance industry is need of a shake up. Naicom boss, Mohammed Kari as a former operator knows this. What appears to be lacking, is the will to carry out this reform. He should take a leaf from the notebook of the NCC that slammed MTN Nigeria with a huge fine, when it missed a deadline.
Majority of the insurance companies in the country are operating on negative retained earnings. Something that’s seen in firms into manufacturing. This wasn’t a situation that happened overnight, but slowly as the years went by. Naicom must move beyond words and put them into action. Fining the companies is not enough, the regulator needs to be firm by removing and sanctioning management of the firms.
All over the world, insurance companies are usually as big as banks and often acquire them. The most capitalized insurance companies in the country are in no position to do this.