Indications have emerged that Insurers’ Committee comprising the National Insurance Commission (NAICOM) and Chief Executive Officers (CEOs) of 58 insurance companies cannot raise N300 million for the industry’s rebranding project aimed at deepening insurance awareness and penetration.
The cash was meant to fund the project for massive insurance education and awareness across the federation.
However, The Nation learnt that lack of commitment to the fund by most insurance companies who are expected to commit a minimum of N5 million each has stalled the project.
The project billed to begin last October could not do so, hence the commencement date was shifted to the first quarter of this year. The first quarter is ending yet nothing has happened.
The Nation learnt that the project was stalled owing to disagreements among CEOs and NAICOM over sharing formula for the required fund. While the chief executives want 50 per cent of the funding to come from NAICOM as the regulator, they also want to share the remaining 50 per cent based on the Gross Premium Income (GPI) of each company, of which some of them disagreed.
One of the CEOs who spoke with The Nation, under the condition of anonymity, said they cannot just contribute N300 million without help from the regulator.
He said: “We have agreed to rebrand the industry to engender growth and I believe we will do it but we cannot bring out money just like that. We need NAICOM’s support.
“The other challenge that we have is that the smaller companies are saying we cannot all share the money equally.They want the big companies to contribute more while some of the big companies think otherwise.
“But basically, we want NAICOM to bring at least 50 per cent of the money. We told NAICOM that if we deepen insurance and expand the industry, it will increase the one per cent insurance levy we contribute and the gains will indirectly go back to them.”
Other companies further revealed that they are yet to commence the process of releasing their portion to the fund.
Chairman of the Insurer’s Committee on publicity, Oye Hassan Odukale, said the first phase of the multi-million Naira project will utilise the online medium such as Facebook, Twitter, among other online platforms to create awareness on the need to subscribe to insurance products and services following the rapid increase in the number of Internet and online users in the country.
Odukale, who is also the Managing Director, Leadway Assurance Limited, added that this would later be followed by jingles on broadcast media, while also utilising the print and bill board mediums.
A senior official of NAICOM told The Nation that the CEOs appealed to the commission to help contribute 50 per cent of the fund which it assented to but the commission in return asked the operators to first contribute their share of 50 per cent.
According to him, the commission has always supported the operators in the industry. “We have always supported the operators in the industry. For instance, we have been advertising and creating publicity for compulsory insurances which are their products. They are supposed to market and publicise the products but we are helping them to do so committing huge funds towards advertisement. We told them that we want to see their commitment first. We had this agreement at the last Insurer’s Committee meeting in October last year and they agreed they will do the sharing.
“But they have not been able to even agree among themselves. I remember they said 50 per cent will be shared on equal basis and the other 50 per cent will be shared based on GPI of each company. We think this is fair but some of them still do not see it that way.
“Based on the budget that was agreed with consultant that help them calculate how much will be required for the project, each company will spend N5 million. Is that too much to spend on publicity? Some are complaining of recession, lack of business, among others. It is sad because some of them just don’t want to do anything. They prefer to remain in their comfort zone even if it means for the industry not to grow farther than where it is today,” he noted.