Director, Inspectorate of the National Insurance Commission, Mr. Pius Agboola said for insurance companies to declare assets, the assets must be of good value and in good location.
By Favour Nnabugwu
National Insurance Commission, Naicom, insurance companies the value and location of their assets is important to add value to the business operation.
An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit.
Assets are created to increase a firm’s value or benefit the firm’s operations and are reported on the companies balance sheets.
Agboola who delivered a paper on ‘Risk Based Supervision Implementation: Commission’s Perspective”, a company may have an assets but the location where it is situated can devalue the asset.
It will be recalled that insurance companies’ assets rose by N401biloion to N2. 02tnillion as at 2020 from N1. 62tillion of 2019.
He said that the rationale behind Risk Based Supervision (RBS) was to identifying early risks firms might be having, acting properly and applying effective intervention..
Agboola, who described NAICOM as Africa’s leading regulator in RBS noted that regulator’s method of assessing firms involved studying .the company to know its business nature.
Others involved identifying that risk that could be harmful to the company, assessing the ability of the management to control the risk, assessing if the firm has earning, capital and capacity that could minimise the overall net risk and finally rate the company and proffer solutions based on the rating.