Concerns Raised Over Government-Owned National Insurance Company Competing with Liberian Businesses

Oct 11, 2024 - 19:30
Oct 11, 2024 - 19:31
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Concerns Raised Over Government-Owned National Insurance Company Competing with Liberian Businesses

The National Insurance Company of Liberia (NICOL), established by the Government of Liberia, is facing criticism for competing directly with Liberian-owned insurance companies, a move seen as detrimental to the local business environment.

Originally founded in the 1980s to support a nascent insurance industry in Liberia, NICOL was intended to provide reinsurance services when the sector was dominated by foreign companies. At that time, the market consisted of only five or six insurance firms. 

Today, however, Liberia's insurance landscape has changed significantly, with ten of the fifteen licensed companies owned and operated by Liberians. 

Insurance remains one of the few industries where Liberians hold a majority stake.

Critics argue that NICOL, in providing vehicle and other insurance services, is taking business away from Liberian companies. 

The question has been raised about the logic of the government insuring its own entities.

In the event of a claim, one government office would essentially be paying another, offering little real risk protection.

After going dormant during Liberia's civil crisis, NICOL was not reactivated during President Ellen Johnson Sirleaf’s administration, as it was believed that the private sector was already strengthening the industry.

However, the company was revived in 2018 under the Weah administration. 

Since then, NICOL has been operating without meeting the legal requirements set by the Central Bank of Liberia (CBL), which regulates the insurance sector.

Other Liberian-owned companies have faced penalties for failing to meet these standards, but NICOL continues its operations without full compliance, raising concerns about fairness and accountability.

The government's decision to continue supporting NICOL has sparked debate over its impact. Critics highlight two major concerns: the siphoning of business from Liberian-owned companies, and the allocation of an estimated $250,000 from the 2024 budget to NICOL, funds that could be better used for critical sectors like healthcare, education, and infrastructure.

As NICOL continues to operate, many are questioning whether the government’s involvement in the insurance sector is beneficial to Liberia and its citizens, or if it is hindering the growth of local businesses.

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Daniel Theo Cole Daniel Theophilus Cole is a Senior Reporter at Kool 91.9 FM/TV/Knewsonline. Cole has a keen interest in Human Interest, Political, Economy, and Agricultural Stories. His passion for journalism extends beyond self-interest. Cell#0776762186 Email: [email protected]