The Nation Newspaper

Category: Insurance

  • Royal Exchange General Insurance pays N1.68b claims in Q3

    Royal Exchange General Insurance Company (REGIC) has paid out N1.683 billion as claims settlements to its clients at the end of the third quarter of  2016, its Managing Director, Mr. Benjamin Agili has said.

    He made this known in a statement in Lagos.

    Giving a breakdown of the various amounts paid in the insurance classes, Agili said a total of N551.19 million was paid on Industrial All Risk (IAR) insurance policies, representing 33 per cent of the total amount paid out so far at the end of the third quarter, 2016.

    He said: “For Motor and Accident insurance policies, N434.57 million was paid to policy holders, accounting for 26 per cent of the total sum paid, while Marine Insurance claims was 21 per cent of the total, which amounted to N346.95 million.

    “Other classes of insurance with claims payments include General Accident insurance policies with N140.97 million paid out as claims, representing 8 per cent, while Fire Insurance policies  resulted in total claims payment of N105.33 million paid out, which is about 6 per cent of the claims paid to various cleints.

    “Claims paid on other classes of insurance such as Engineering Insurance Policies was N67 million and Special Risks amounted to N37.1 million, which represents 4 per cent and 2 per cent respectively of the total claims paid by the end of Q3, 2016.”

    He said the claims report shows that the company, capable of meeting its various claims demands, especially as in the past, it paid close to N4 billion to Nigerian Bottling Company for the fire incident in its Benin plant in 2010 and was the lead insurer in a consortium that paid over over N3.63 billion to Friesland Foods West African Milk Company (WAMCO) over the major flood disaster in its Lagos factory in 2011.

    He noted that the company’s focus is the prompt settlement of genuine insurance claim, adding that this would continue to be the business philosophy of the company in years ahead.

    He added that the company would continue to support the business community as it strives to increase the manufacturing capacities of industries in the country.

    “Royal Exchange has once again demonstrated its strength and ability to honour its financial obligations and also protect the interest of its various corporate and individual clients, as there is a conscious effort to have a genuine partnership with the clients based on trust and integrity, core values which was instilled by the founders of the company and have continued to drive the operations and strategic directions of the company.

    “Customer satisfaction is the fulcrum of insurance business and this inevitably builds customer loyalty. Once Royal Exchange is able to pay customers claims as they arise, more and more customers and the general public will have faith to take out insurance policies on their lives and properties because they are convinced that should a claim or loss arise, Royal Exchange will be able to meet its financial obligations to its clients,” he added.

  • Why Nigerians do not trust insurance firms, by Falana

    HUMAN rights activist Femi Falana (SAN) has identified unwillingness to pay claims and delayed payment as reasons Nigerians do not trust insurance firms.

    Speaking at the Annual National Insurance Colloqium held in Lagos, Falana said while insurance companies are anxious to collect premiums, they are reluctant to pay claims. And when they agree to pay, the payment is deliberately delayed.

    He added that owing to the delay in the payment of claims or in repairing damaged vehicles, people have lost confidence in insurance firms.

    ‘’One account of such delays is when motorists and drivers fight on the roads to determine who would fix their damaged vehicles,’’ he said.

    He further said the lack of confidence in insurance operators had been compounded by the increasing wave of touts who sell fake insurance, noting that the National Insurance Commission (NAICOM) has not adopted adequate measures to prosecute the promoters of fake insurance companies.

    Falana called on the NAICOM to ensure that claims were paid promptly by insurance firms and that it should also enforce the provisions of the six compulsory insurance laws.

    He said the Commission should embark on enlightenment programmes to enable Nigerians appreciate the benefits of insurance.

    “For Nigerians to repose confidence in insurance, the public will have to be enlightened to appreciate the importance of insurance. Insurance companies should be made to pay claims without undue delay. At the same time the government should be prepared to prosecute those who operate fake insurance companies and others who dupe members of the public through fake insurance papers. However, the government cannot succeed unless the relevant stakeholders are determined to partner with it in sanitising the insurance industry.”

    He added that insurance laws in the country are deficient while the rights guaranteed by those laws are usually breached with impunity.

    Coordinator of the Colloquium, Johnson Adedapo, who spoke on the theme, “100 years after: Is insurance working in Nigeria?”, said Nigerians’ age-long apathy towards insurance is a threat to economic development.

    “This is avoidable and unacceptable in a society that does not want to suffer deprivation and loss. There is no doubt that there are several potentials available to the citizens of this country from insurance. Equally, there are vast insurance products that could be developed for the people and to be brought to the market. Consequently, the consumers and providers of insurance services are not meeting.

    “This colloquium seeks to bring stakeholders together to identify the problems militating against deepening insurance culture close to 100 years of insurance practice in Nigeria. It hopes to put the essential issues on the front burner and find the way forward, to ensure that a synergy is created as well as find common inspiration for action in dealing with identified challenges,” he added.

  • Inspectorate dept’s relocation pits NAICOM’s management against workers

    Inspectorate dept’s relocation pits NAICOM’s management against workers

    The relocation of National Insurance Commission (NAICOM) Inspectorate Department from its headquarters in Abuja to Lagos  has created a problem between its management and  workers.

    Though its Head of Corporate Affairs, Rasaaq’ Salami, has explained that the comission meant well by the relocation aimed at ensuring effective and regular inspection of insurance entities, the workers think otherwise.

    The workers, who have embarked on a protest over the issue, claimed that the relocation was targeted at their leader.

    The union have shut the Commission’s headquarters and prevented access into the building. As at press time, the union was reportedly meeting with the management of NAICOM to resolve the issue.

    Speaking with reporters in Lagos, Salami pointed out that the Central Bank of Nigeria’s (CBN’s)  Banking Supervision Department is in Lagos, adding that this was so because most banks’ headquarters are  in Lagos.

    Highlighting benefits of the Inspectorate Department in Lagos, he said over 95 percent of insurance firms are also in Lagos.

    He said there were also cost-benefits of the department being sited in Lagos.

    Salami explained that aside from the Commission’s achieving quick and better service delivery, it had also created proximity to operators allowing quicker response time, among others.

    He said: “The relocation of NAICOM Inspectorate Directorate from the head office in Abuja to the Lagos Control office is for better service delivery to stakeholders. The relocation is part of an ongoing restructuring aimed at improving efficiency of the workforce and bringing the Commission closer to the regulated entities for effective insurance industry supervision.

    “For the records, the Directorate is saddled with conducting on-site inspection of insurance entities for the Commission. It is imperative to note that over 90 per cent of insurance operators are headquartered in Lagos being the hub of commercial and economic activities in the country. Thus, this exercise will ensure prompt and regular inspection of these insurance firms – Insurance Companies and Brokers.

    “The insurance industry operators are enjoined to take advantage of this proximity to the Inspectors to enjoy quicker and efficient service delivery from the Regulator,” he added.

  • Top 10 insurance firms emerge

    Top 10 insurance firms emerge

    THE  top 10 insurance firms in the country have emerged.

    They were unveiled by the Nigeria Insurance Digest 2014, published by the Nigerian Insurers Association (NIA).

    The firms are Leadway Assurance Limited, AIICO Insurance PLC, Axa Mansard Insurance PLC, Custodian & Allied Insurance Plc, Mutual Benefits Assurance Limited, and Niger Insurance PLC.

    Others are African Alliance Insurance PLC, NEM Insurance PLC, Zenith General Insurance Company Limited and Sovereign Trust Insurance PLC.

    According the Nigeria Insurance Digest’s report the firms distinguished themselves through hard work and proper planning.

    A breakdown of the report shows that Leadway Assurance came first with market share of 13.29 per cent in the year under review. The underwriting firm recorded N39.01 billion gross premium.

    AIICO Insurance came second with 11 per cent market share and a record of N33.27 billion.

    Axa Mansard Insurance was number three on the list with 5.77 per cent market share with N16.94 billion gross premium. Custodian & Allied Insurance came fourth with 4.79 per cent market share and N14.06 billion gross premium while Mutual Benefits Assurance Limited came fifth with 3.87 per cent market share and N11.35 billion gross premium.

    Others are Niger Insurance – 3.77 per cent market share and N11.06 billion; African Alliance Insurance Plc, 3.45 per cent, N10.31 billion; NEM Insurance, 3.22 per cent, N9.45 billion; Zenith General Insurance Company Limited, 2.63 per cent, N7.72 billion and Sovereign Trust Insurance, 2.48 per cent, N7.29 billion.

  • Africa Re seeks NAICOM/operators’cooperation to boost insurance

    There is need for the Federal Government through the National Insurance Commission (NAICOM) and insurance operators to work together to increase insurance penetration in the country, Chairman, reinsurance Corporation (Africa Re), Hassan Boubrik has said.

    He made this known at the closing dinner of the 141st Board Meeting in Abuja.

    He said efforts to increase the penetration of insurance had to be collective.

    He said: “We call on all, especially insurance companies, supervisors, and government bodies to work tirelessly to increase the insurance penetration and our population, and to contribute to the provision of risk management solutions to our communities and countries.

    “As a composite company providing lifetime covers in over 60 countries spread across Africa, Brazil, Asia and the Middle-east is rated A by Standard & Poors, an international rating agency, Africa Re is a major industry in Africa in terms of market share. We are also not just in Africa and the Middle-East in terms of size of premium income estimated at $700 million – one of our own major achievement in our financial rating by Standard & Poor.”

    African Re Group Managing Director, Mr. Cornellie Karekezi explained why the reinsurers decided to take its board meeting to Abuja this year.

    “We had our board meetings in Lagos for the last 38 years. And, it is normally a unique opportunity for board directors to interact with staffs that are in Lagos and to interact with the insurance community of Nigeria. Although the insurance market is in Lagos, the corporation aim to achieved two-prong targets with the Abuja meeting.We came to Abuja mainly for two reasons. First, to visit top authorities of Nigeria to discuss some matters of common interest, especially the projects which we intend to do in this country.

    “Two projects are on our minds at the moment. Of course, we are requesting the venue for building residential properties. We have been doing a lot here, and this is our home. We want to relocate our head office to Abuja. It’s long due. So, we will come here, in the next two to three years, we’ll build our head office, and that is one of the major relocations we have.”

    He said Africa Re was planning to support farmers by providing insurance covers against drought and other diseases.

    On the impact of recession on insurance business and Africa Re,  its Deputy Managing Director Ken Aghoghovbia, said the impact was insignificant to the corporation’s overall business.

    “The recession has impacted our operations. In Nigeria, there is a depreciation of the currency because we report in the US dollar. The impact affects not only on liquidity, our balance sheet, but the good news is that even in South Africa, the Rand has steadied. There is marginal appreciation. I think 10.6 percent. In Kenya, the shillings have been stable. In the CFA zone, the currency which is tied to Euro has kind of appreciated against the US dollar.

    “However, Africa Re’s diversification has been relatively stable. There is an impact, no doubt, but it is not as bad as it would have been. It is the same story across the board,’’ Aghoghovbia added.

  • NIA warns banks against forcing customers to patronise subsidiaries

    The Nigerian Insurers Association (NIA) has warned banks to desist from compelling customers to insure their collaterals with their subsidiaries.

    Its Chairman Eddie Efekoha gave the warning at a briefing in Lagos.

    He explained that a subsidiary is a captive company owned by a bank where, in contravention of the Insurance Act, it forces customers who obtain loans from it to patronise.

    The chairman expressed displeasure over the rising trend of banks compelling customers to do so.

    He stressed that this is against the Central Bank of Nigeria (CBN) law, which bans universal banking licence in the country, noting that clients should not be forced to insure with any insurance firm.

    He said: “It has come to our notice that the banks and their subsidiaries often compel customers to insure with themselves specific insurance companies. This means that the banks compel their customers who take loans to insure the collateral with their own insurance subsidiaries or companies.

    “Rather imposing their insurance companies on customers, the NIA chairman advised bank customer to bring a policy from any registered insurance company which notes the interest of the bank that should there be damage to this collateral, the proceeds from the insurance would be made to the bank; and, that is all that is required.”

    Efekoha, therefore, urged such customers to bring evidence of compulsion to indemnify collateral with captive companies to NIA.

    He said they had begun educating the public that where banks so insist, they should compel the banks to put it in writing and that a such letter should be brought to the NIA enroute because we will make such report to the CBN, adding that the assocaition would act on it.

    The NIA chief said the association had overlooked such complaints in the past, adding that it had got out of hand in recent times and that the association  could no longer sweep it under the carpet.

  • NIA seeks govt’s, NASS’ intervention over annuity dispute

    NIA seeks govt’s, NASS’ intervention over annuity dispute

    Life insurance firms under the aegis of Nigerian Insurers Association (NIA) have sought the intervention of the National Assembly, Secretary of the Federal Government; Minister of  Finance and the Head of Service on the issue of transfer of life annuity assets to pension funds Custodians (PFCs) as directed by the National Pension Commission (PenCom).

    According to PenCom, a total of 46,198 retirees are drawing their pension benefits through life annuity product offered by insurers while 140,532 retirees are drawing through programme withdrawal offered by Pension Fund Administrators (PFAs).

    Life Annuity and programme withdrawal are modes of withdrawal of benefits over an expected lifespan. The National Insurance Commission (NAICOM) and PenCom jointly regulate the life annuity business of the Pension Reform Act (PRA) 2004 repealed by the PRA 2014.

    PenCom on November 3, this year directed all the insurance companies interested in administering annuity to retirees to appoint Pension Fund Custodians (PFCs) of their choice and open an account with them accordingly. This generated a backlash from insurers regulated by NAICOM as they disagree with PenCom.

    PenCom explained that the decision to move annuity assets from life insurance companies to PFCs is to ensure consistency with Pension Reform Act (PRA) 2014 and strengthen the processing of administration of retirement benefits.

    PenCom in a circular titled, ‘Strengthening the Administration of Retirement Benefits under the Pension Reform Act (PRA) 2014,’ with reference number PENCOM/INSP/CIR/TECH/16/17, issued on November 3, 2016, to pension fund administrators and custodians and signed by its Head, Surveillance Department, Muhammad Umar, the pension regulator noted that in line with the PRA 2014, it resolved that the custody of retiree life annuity shall henceforth be domiciled with PFCs as provided for in Section 56 of the Pension Act.

    “Life insurance companies currently providing life annuity for retirees under the Contributory Pension Scheme (CPS) are to open an operational account jointly with a PFC of their choice and advise the commission. The life insurance companies providing retiree life annuity under the CPS should transfer the corresponding assets in their possession/custody to the PFC of their choice. The approval of new request for annuity should be put on hold with immediate effect, until life insurance companies meet the custody and transfer conditions.

    The NIA Director-General, Sunday Thomas, who spoke at the second Business Journal Insurance Summit, in Lagos, said the body had written PenCom, National Insurance Commission (NAICOM) and the Head of Service on the need to resolve the problem.

    He said PenCom lacks legal grounds to call for transfer of annuity assets, which is different from pension contributions.

    He said: “We have sought the intervention of the of the National Assembly, Secretary to the  Government of the Federation, Minister of Finance and the Head of Service on issue of transfer of life annuity assets as directed PenCom.

    “PenCom lacks legal grounds to call for transfer of annuity assets which is different from pension contributions. I am optimistic the circular would be withdrawn by the pension regulator.”

    Meanwhile, NAICOM has also sought dialogue with PenCom on its suspension of life annuity insurance payments of retirees by PFAs to insurance companies.

    NAICOM’s Head of Corporate Communications, Rasaaq ‘Salami said the commission is intervening and has called for a meeting with PenCom.

    “We are in receipt of a letter from PenCom on its suspension of annuity payment by PFAs to insurance companies. We have responded and stated our position and we have asked for a meeting with them. Since the meeting is a process that we have initiated, it will not be good for us to make our position known to the public. The annuity business is jointly regulated by NAICOM and PenCom and we must look for how to resolve whatever problem we encounter,” he added.

  • LASACO records N5.1b gross premium

    LASACO records N5.1b gross premium

    LASACO Assurance Plc has recorded a gross premium income of N5.1 billion in its 2015 financial year.

    The result shows a nine per cent reduction when compared to the N5.6 billion posted in 2014. This was attributed to the slowdown in many business sectors which began in 2015 due to fall in oil price.

    LASACO Chairman, Mrs. Aderinola Disu made this known at the company’s 36th Annual General Meeting at the Premier Hotel, Ibadan, the Oyo State capital.

    He said even with drop in business, there was an increase of five per cent in the firm’s net premium income which rose from N2.3 billion in 2014 to N2.5 billion in 2015.

    She said the underwriting firm’s profit reduced by 13 per cent to N1.04 billion as against N1.19 billion in 2014 but noted that due to a wise investment strategy even in these trying times, investment income increased to N661.5 million, representing 28 per cent growth over the N515.2 million achieved in 2014.

    She said: “The profit before tax reduced by 23 per cent from N525.8 million in 2014 to N406.7 million in the current financial year. The company’s profit after tax reduced by 39 per cent in 2015 to N285 million as against N445.7 million which makes the company’s total assets increased by 11 per cent from N14 billion in 2014 to N16 billion in the year under review.”

    On the company’s board changes and issues of corporate governance, the chairman said the National Insurance Commission (NAICOM) recently enforced the Code of Corporate Governance 2009 for the insurance industry in Nigeria as part of its strategic efforts to rebuild and sustain the waning confidence of stakeholders in insurance.

    In this connection, Olusola Olatayo Ladipo-Ajayi having attained retirement age of 60 retired as the Managing Director and was replaced by Segun Balogun, who was appointed  as the Deputy Managing Director last year, she said.

    She noted that Balogun has worked as the chief executive officer in top insurance companies and he is a seasoned insurance practitioner with over 30 years experience and the right business acumen to move the company forward.

    Furthermore, Akin Odusami, Otunba Akin Doherty and Rilwan Oshinusi equally joined the board as non-executive directors and deputy managing director.

    On the firm’s future outlook, she said as an organisation, in the coming year, they will have to focus on repositioning their brand and improving on value proposition for their stakeholders and customers.

    “We have positioned our company to respond to the current dynamics of the business environment by improving on our business models. We have commenced the process of increasing our market share by identifying trends and opportunities, understanding customers’ behaviour while at the same time improving on the quality of services to our customers and business partners. An e-services platform, which will provide real time business interaction while reducing process time and operational cost, will soon be launched.

    “Digital distribution of insurance is the new frontier. As customers become digitally savvy, the insurance sector will need to ramp up its digital presence to accommodate the changing buying pattern of customers. This is a new market the behavior of the millennial and their insurance needs, is being researched by our company.’’

  • NIA seeks govt’s, NASS’ intervention over annuity dispute

    NIA seeks govt’s, NASS’ intervention over annuity dispute

    Life insurance firms under the aegis of Nigerian Insurers Association (NIA) have sought the intervention of the National Assembly, Secretary of the Federal Government; Minister of  Finance and the Head of Service on the issue of transfer of life annuity assets to pension funds Custodians (PFCs) as directed by the National Pension Commission (PenCom).

    According to PenCom, a total of 46,198 retirees are drawing their pension benefits through life annuity product offered by insurers while 140,532 retirees are drawing through programme withdrawal offered by Pension Fund Administrators (PFAs).

    Life Annuity and programme withdrawal are modes of withdrawal of benefits over an expected lifespan. The National Insurance Commission (NAICOM) and PenCom jointly regulate the life annuity business of the Pension Reform Act (PRA) 2004 repealed by the PRA 2014.

    PenCom on November 3, this year directed all the insurance companies interested in administering annuity to retirees to appoint Pension Fund Custodians (PFCs) of their choice and open an account with them accordingly. This generated a backlash from insurers regulated by NAICOM as they disagree with PenCom.

    PenCom explained that the decision to move annuity assets from life insurance companies to PFCs is to ensure consistency with Pension Reform Act (PRA) 2014 and strengthen the processing of administration of retirement benefits.

    PenCom in a circular titled, ‘Strengthening the Administration of Retirement Benefits under the Pension Reform Act (PRA) 2014,’ with reference number PENCOM/INSP/CIR/TECH/16/17, issued on November 3, 2016, to pension fund administrators and custodians and signed by its Head, Surveillance Department, Muhammad Umar, the pension regulator noted that in line with the PRA 2014, it resolved that the custody of retiree life annuity shall henceforth be domiciled with PFCs as provided for in Section 56 of the Pension Act.

    “Life insurance companies currently providing life annuity for retirees under the Contributory Pension Scheme (CPS) are to open an operational account jointly with a PFC of their choice and advise the commission. The life insurance companies providing retiree life annuity under the CPS should transfer the corresponding assets in their possession/custody to the PFC of their choice. The approval of new request for annuity should be put on hold with immediate effect, until life insurance companies meet the custody and transfer conditions.

    The NIA Director-General, Sunday Thomas, who spoke at the second Business Journal Insurance Summit, in Lagos, said the body had written PenCom, National Insurance Commission (NAICOM) and the Head of Service on the need to resolve the problem.

    He said PenCom lacks legal grounds to call for transfer of annuity assets, which is different from pension contributions.

    He said: “We have sought the intervention of the of the National Assembly, Secretary to the  Government of the Federation, Minister of Finance and the Head of Service on issue of transfer of life annuity assets as directed PenCom.

    “PenCom lacks legal grounds to call for transfer of annuity assets which is different from pension contributions. I am optimistic the circular would be withdrawn by the pension regulator.”

    Meanwhile, NAICOM has also sought dialogue with PenCom on its suspension of life annuity insurance payments of retirees by PFAs to insurance companies.

    NAICOM’s Head of Corporate Communications, Rasaaq ‘Salami said the commission is intervening and has called for a meeting with PenCom.

    “We are in receipt of a letter from PenCom on its suspension of annuity payment by PFAs to insurance companies. We have responded and stated our position and we have asked for a meeting with them. Since the meeting is a process that we have initiated, it will not be good for us to make our position known to the public. The annuity business is jointly regulated by NAICOM and PenCom and we must look for how to resolve whatever problem we encounter,” he added.

  • LASACO records N5.1b gross premium

    LASACO Assurance Plc has recorded a gross premium income of N5.1 billion in its 2015 financial year.

    The result shows a nine per cent reduction when compared to the N5.6 billion posted in 2014. This was attributed to the slowdown in many business sectors which began in 2015 due to fall in oil price.

    LASACO Chairman, Mrs. Aderinola Disu made this known at the company’s 36th Annual General Meeting at the Premier Hotel, Ibadan, the Oyo State capital.

    He said even with drop in business, there was an increase of five per cent in the firm’s net premium income which rose from N2.3 billion in 2014 to N2.5 billion in 2015.

    She said the underwriting firm’s profit reduced by 13 per cent to N1.04 billion as against N1.19 billion in 2014 but noted that due to a wise investment strategy even in these trying times, investment income increased to N661.5 million, representing 28 per cent growth over the N515.2 million achieved in 2014.

    She said: “The profit before tax reduced by 23 per cent from N525.8 million in 2014 to N406.7 million in the current financial year. The company’s profit after tax reduced by 39 per cent in 2015 to N285 million as against N445.7 million which makes the company’s total assets increased by 11 per cent from N14 billion in 2014 to N16 billion in the year under review.”

    On the company’s board changes and issues of corporate governance, the chairman said the National Insurance Commission (NAICOM) recently enforced the Code of Corporate Governance 2009 for the insurance industry in Nigeria as part of its strategic efforts to rebuild and sustain the waning confidence of stakeholders in insurance.

    In this connection, Olusola Olatayo Ladipo-Ajayi having attained retirement age of 60 retired as the Managing Director and was replaced by Segun Balogun, who was appointed  as the Deputy Managing Director last year, she said.

    She noted that Balogun has worked as the chief executive officer in top insurance companies and he is a seasoned insurance practitioner with over 30 years experience and the right business acumen to move the company forward.

    Furthermore, Akin Odusami, Otunba Akin Doherty and Rilwan Oshinusi equally joined the board as non-executive directors and deputy managing director.

    On the firm’s future outlook, she said as an organisation, in the coming year, they will have to focus on repositioning their brand and improving on value proposition for their stakeholders and customers.

    “We have positioned our company to respond to the current dynamics of the business environment by improving on our business models. We have commenced the process of increasing our market share by identifying trends and opportunities, understanding customers’ behaviour while at the same time improving on the quality of services to our customers and business partners. An e-services platform, which will provide real time business interaction while reducing process time and operational cost, will soon be launched.

    “Digital distribution of insurance is the new frontier. As customers become digitally savvy, the insurance sector will need to ramp up its digital presence to accommodate the changing buying pattern of customers. This is a new market the behavior of the millennial and their insurance needs, is being researched by our company.’’