Insurance business is not done in isolation – Agboola

The Chairman of the College of Insurance Supervisors of the West African Monetary Zone (CISWAMZ), Mr Agboola Pius, Tuesday stated that insurance business is not done in isolation.

Speaking during the second meeting of the college in Abuja, he said, “Insurance business evolved through the desire of entrepreneur to curtail the negative effects of the risk materializing. Hence, that is why Insurance is regarded as a risk transfer mechanism. A business that exist to ensure the survival of other businesses.”

According to him, the entrepreneur who establishes an Insurance business or company may choose to stay small, serving the local markets.

“Alternatively, the companies may not have the options to stay small as there are so many other factors that could make each company to expand and go beyond the shores of the jurisdictions and these factors can be categorized into; push or pull factors.

“Push factors include;

· Risk diversification

· Declining opportunities in the home jurisdiction, and

· The need for consolidations, etc.

“Pull factors include;

· The need to follow their clients abroad which is common in the oil and gas sector

· Expected benefits (i.e. large profit margin)

· Available

unutilized potentials, etc.”

The chairman explained that the special nature of insurance and the fact that it is a business in the financial sector entails that it is highly regulated in the jurisdiction of operation.

“As the business expands beyond the jurisdiction of establishment or operation, the need for bi-regional or multi-regional co-operation and/or understanding grew. “Hence, the need for this regional integration called College of Insurance Supervisors of the West African Monetary Zone, Agboola said.