Commissioner for Insurance, Mohammed Kari, has rated the country’s insurance sector as the weakest link in the Nigerian economy owing to its low capital base.
Kari, who spoke on the sideline of the 2018 Insurance Education of the Chartered Insurance Institute of Nigeria (CIIN) held in Ibadan, said the development is saddening, according to a report by The Nation.
He said the sector which ought to provide risk cover for other sectors seemed to be losing its ground as parties it should secure are breaking new grounds leaving it behind.
Citing the recent action of the Central Bank of Nigeria (CBN) to raise the capital base of Micro Finance Banks and Mortgage Guarantee Banks to N5 billion and N6 billion respectively, he said it has become crucial for insurance companies to increase their capital.
He noted that Life insurance firms presently has N2 billion capital base; Non-Life, N3 billion; Composite N5 billion and Reinsurance N10 billion.
He stated that insurance anywhere in the world is the mobiliser of funds and provider of security, noting that you cannot provide security if you don’t have capital.
The Commissioner expressed worry that a sector that should insure the aviation and other high ranking sectors, should not be seen to have capital less than that of microfinance banks.