For those who do not know, the Central Bank of Nigeria, CBN and the National Insurance Commission, NAICOM are fighting over who should decide how bancassurance should operate.
…the idea that key agencies in the financial system are singing discordant tunes on key matters is a turn off to serious investors.
Banassurance is the use of conventional commercial banks to sell insurance products to a broader customer base of banks. It also includes the use of web-based aggregators and airlines to sell insurance policies. The CBN and NAICOM are two government bodies that should be collaborating are the ones causing confusion in the financial system.
The culture inter-governmental agency scuffle on who is more appropriate to do authorise or regulate any aspect of the economy is becoming one too many.
The argument between the CBN and NAICOM is on who has the power to authorise who. The CBN believes it has the power to regulate how banks engage in bancassurance deals with insurance companies, while NAICOM believes it has the power to do the same. #
So all the argument of the CBN and NAICOM over bancassurance is whi has the power to do something- just a power show.
However, Nigeria’s insurance industry is one of the worst performing market for insurance in Africa. South Africa rakes in at least USD5o billion in premium while Nigeria makes just about USD1 billion in a year.
With all the lips service paid to deepening financial inclusion and growing the insurance sector, the egos of few government officials displaying their superiority is the now the cog in the wheel.
The same issue is the reason Stanbic Holdings and all its subsidiaries has not been able to submit its financial results in the last one and half year. The power tussle between the CBN and the Financial Reporting Council of Nigeria, FRCN. The case has remain in courts and there is no end in sight.
The implication of this development is that its is counter-productive and it sends the wrong signal to the global investor community. In an era where Nigeria needs foreign currency inflows either through foreign directinvestment, FDIs and or portfolio investments, the idea that key agencies in the financial system are singing discordant tunes on key matters is a turn off to serious investors.
Nigerian financial authorities need to get their acts together and focus on delivering real value to stakeholders.