The Nation Newspaper

Category: Insurance

  • NCRIB seeks more support for made-in-Nigeria goods

    The Nigerian Council of Registered Insurance Brokers (NCRIB) has urged the government to give greater impetus to the patronage of indigenous goods to boost the   economy.

    Its President, Mr. Kayode Okunoren, made the plea in Lagos.

    While lauding the efforts of the government to revive the economy, he suggested that policies should be made government officials to encourage people to patronise locally produced goods.

    He said the comatose textile industry would come to life if there was a sincere pronouncement that workers could wear home-made clothes on certain days of the week.

    Okunoren, who cited other countries, said these countries looked inwards at some point, and that such actions would stimulate growth in the various sectors and give life to the economy.

    He said if this step was taken by the people, insurance would also witness a boost as more activities would be generated across various sectors of the economy, noting that the demand for dollar would crash when the demand for goods was intensified.

    He, however, called for sincerity on the part of the government to patronise made-in-Nigeria goods.

    The NCRIB chief also urged Nigerians to be patient with the administration in fixing the economy and the ongoing war against corruption.

    Meanwhile, the NCRIB is giving further impetus to the government’s economic revival efforts as it has planned a conference for the month.

    The event with the theme “The future today” will hold on Thursday, November 10 in Abuja.

    The theme, according to the Chairman, Organising Committee, Dr. Bola Onigbogi, is aimed at galvanising opinions on the shape and future of Nigeria’s economy and the role of the insurance industry.

    It will be declared open by Vice President Yemi Osinbajo.

    To lead discussions at the confab, which would attract participants from the industry, the organised private sector, the academia and the government is the former Minister of State for Finance, Dr. Remi Babalola.

    Also expected at the event are the Minister of Budget  and National Planning, Senator Udo Udoma, the Executive Chairman, Federal Inland Revenue Services (FIRS), Dr. Babatunde Fowler; Minister of Health, Prof. Isaac Adewole; and Managing Director, Financial Institutions Training Centre (FITC), Dr. Lucy Newman, among others.

     

  • State wins in $2b insurance fee dispute

    The United States (U.S.) at the weekend fended off a legal challenge by the insurance industry that nearly $2 billion in industry fees meant to support regulators have been improperly siphoned off this decade to pay for other parts of the government.

    This year, about $150 million is going to support some two dozen state programmes, from fire-safe cigarettes and forge-resistant prescription pads to immunisations and an urban search-and-rescue program.

    A panel of state judges at the weekend ruled in favor of the state in a lawsuit launched six years ago by the New York Insurance Association over fees paid by insurance companies that were created to support operation of what was then the state Insurance Department.

    In 2011, Gov. Andrew Cuomo combined that department with the state Consumer Protection Board to form what is now the Department of Financial Services, which charges the fees.

    Insurance companies sued a year earlier, claiming the fees were a “hidden tax” since much of the money went to other state agencies. But the Appellate Division of state Supreme Court upheld the practice, reaffirming a lower court ruling that also favored a state practice called “sub-allocation” of the fees to other departments, primarily the departments of Health and State.

    New York Insurance Association President Ellen Melchionni said she was “highly disappointed that the court did not stop this back-door tax on New York businesses … This is a secretive practice that the state employs when they want to fill budget gaps — amounting to more than $1.8 billion over the past seven years.”

    She said the state general fund should pay for programs unrelated to the insurance industry. “A hidden tax in an era of supposed government transparency is unacceptable. Their game of smoke and mirrors should not be tolerated,” Melchionni said.

    The DFS press office said the agency was “pleased with the decision … As the court determined, the challenged annual assessment pursuant to legislative authority were not ‘taxes’ and the programs funded beginning in 2008 were reasonably necessary to the regulatory purposes of the department.”

    Melchionni said the lobbying group, which represents such insurance giants as Allstate, Farmers, Nationwide, State Farm and Swiss Re, as well as dozens of local companies, is “in the process of reviewing the decision and will be considering our options.”

    The lawsuit centered on how much of a dedicated fee on insurance policy-writers headquartered in the state has gone to other parts of state government beyond that which regulates the insurance industry.

    According to the Insurance Association, about $2.9 billion went to other state agencies between 2000 and 2016. The Department of Financial Services was not able to provide figures, but did not dispute industry figures.

    Before 2008, the annual diversion amounts never exceeded $75 million, according to industry figures. That exploded to $294 million in 2008 under Gov. Eliot Spitzer. It was $315 million in 2010 and $304 million in 2011 under Gov. David Paterson.

    It hit an all-time high of $331 million in 2012, in the first budget year of Gov. Andrew Cuomo. It was $305 million in 2013, $301 million in 2014, and $171 million in 2016.

    It is budgeted at $150 million in the 2016-17 budget. Of that, the largest share ($35 million) is earmarked for the Healthy NY program. Other programs include the fire prevention and control/state fire reporting system ($22.8 million), center for community health ($13.2 million), forge-resistant prescriptions ($14.5 million), immunizations ($7.5 million) and fire-safe cigarette development ($1 million).

     

  • Government, insurance industry launch flood protection plan

    The property flood resilience action plan, launched on Friday in the United Kingdom (UK) brought together the government and the insurance industry with the aim of ensuring property owners are better equipped to prepare for flooding.

    The independent report is set to help people better protect their homes and businesses from risk of flooding and get back into them sooner if it does happen.

    According to InsuranceAge,  it explores the following: the role of building regulations and certification, in encouraging use of flood resistant construction methods; how rigorous independent standards can provide confidence in flood products across the industry; how insurers can further increase their support for property owners installing flood resistant measures, particularly at the repair stage.

    According to the report a “one stop shop” advice web portal has been established to make it easier for people to find the most relevant information on better protecting their properties against flooding.

    This advice, which is targeted at homeowners, business owners and third parties including insurers, includes:  precautionary actions to take to better protect property from flooding; actions to take if property is in imminent danger from flooding; live flood warnings; recent case studies and research.

    In addition, the Association of British Insurers (ABI) has produced a new consumer guide to resilient flood repair which insurers are helping to circulate.

    Floods Minister Thérèse Coffey said: “The impact of flooding on people’s lives is not just financial, it can be emotionally devastating. This new action plan brings business and government together so it will be easier for people to take action to better protect themselves and their properties.

    “Our unprecedented £2.5billionn investment in flood defences will better protect 300,000 properties from floods by 2021.

    “But property-level measures are key to ensuring those who are unfortunate enough to suffer flooding can get back in their homes and businesses sooner and minimise the impact.”

    Dr Peter Bonfield, chair of the property flood resilience action plan added: “The Action Plan will help to give people and businesses the means to reduce the chances of their lives and livelihoods being disrupted by flooding. This is about both stopping the floodwaters getting in and speeding recovery when it does.

    “This action plan goes hand in hand with other recent announcements, like the broader National Flood Resilience Review. Both help ensure the country is better prepared for future flood events.”

    Insurers

    Director-General of the ABI Huw Evans, said: “Being flooded is horribly traumatic, not only because of the immediate devastation, but because drying out and repairing badly affected properties can take

  • ‘Brokers connive with vehicle owners to dodge insurance’

    Why is insurance unpopular? Some stakeholders have an answer. They are Vehicle Inspection Officers (VIOs), Federal Road Safety Commission (FRSC), Federal Fire Service, insurance consumers and others.

    The stakeholders spoke at the  Almond Insurance Consumers Forum in Lagos.

    The VIOs said insurance brokers  connive with vehicle owners to issue fake or expired insurance policies, which are uploaded on the Nigerian Insurance Industry Database (NIID) as part of particulars of impounded vehicles.

    Assistant Chief Vehicle Inspector Officer, Mrs. Adeshola Adeboshin, said such action was unfortunate as they (VIOs) rely on the NIID through the use of a verifier, Auto Inspector, to verify fake and expired particulars.

    According to her, they use this medium without having to stop all vehicles to know if they have genuine particulars. She said all they do is input an upcoming vehicle plate number on the device and it brings up its details.

    She explained that they only stop vehicles that have fake and expired particulars while on patrol or at checkpoints.

    She said it was regrettable that the easy way for them to check and apprehend vehicles with fake particulars, especially insurance, is being threatened by the activities of some unscrupulous brokers.

    Mrs Adeboshin urged the regulatory authority and other trade associations to address the situation. She pointed out they had been able to detect the brokers nocturnal acts as they were able to differentiate between the time they impounded the vehicle for fake insurance certificate and when the  genuine certificate was uploaded on the NIID database.

    She warned that anyone caught with fake particulars would face criminal charges.

    Meanwhile, the Federal Fire Service said insurers were yet to remit money accruable from the 0.25 per cent Fire Service Maintenance Fund between the insurance industry and the Federal Fire Service.

    Fire Officer, Ahmadu Sakiru, said the 0.25 per cent is a revenue to be contributed by insurance firms to the Fire Service Maintenance Fund.

    FRSC said the Commission had discovered that may school buses  do not have insurance certificates.

    Its Public Relations Officer, Paul Abiti, said the FRSC regulation on school buses requires that they have comprehensive insurance. He called on the Nigeria Insurers Association (NIA) to engage the schools by enlightening them to hasten compliance.

    Chairman of the occasion, a former Chairman, Nigerian Insurers Association (NIA), Olusola Ladipo-Ajayi, said the inability of law enforcement agents to enforce the purchase of insurance by Okada and tricycle (Keke) owners have continued to deny insurance operators billions of Naira yearly.

    He said insurance companies parade good products for Keke and Okada riders, but lack of enforcement has made the parties not to buy the products, noting that  when the laws were being enforced, the parties were buying the products but now they drive without insurance cover, because they were not compelled to buy.

    He urged the government to support insurance by enforcing the procurement of compulsory insurances, adding that the insurance operators could not be selling products and at the same time carrying out enforcement.

    Progressive Shareholders Association of Nigeria (PSAN) President, Boniface Okezie, urged insurers to reach out to okada riders and keke drivers, advising them to buy insurance as it would enhance the premium base of the industry and by extension, shareholders.

    At the end of the event, a communiqué was drawn. The forum agreed that there was need for the industry to create awareness on what insurance is and how the public could benefit from its protection. The industry should put in place more efforts to promote insurance literacy in the country, they added.

    They also said the insurance practitioners should put in more efforts to leverage on modern technology in the distribution of insurance products and that there should be an enhanced collaboration between the industry and the relevant government agencies in promoting compulsory insurances in the country.

    “The industry should put in place a more efficient complaint bureau system to settle disputes arising in insurance contracts in the country. The companies in the market should strive to set up efficient research departments that would enable them to identify the insuring needs of the  publics.

    “There is need for training and re-training of the insurance market operators so that they should be abreast with the contents of the products that they are marketing to the insuring public. Insurance practitioners should look for the opportunities coming from the economic recession, more so that recession is risk and insurance is all about risk management. There is need for the industry to adopt modern technology to efficiently remind policyholders of policies that were due for renewals,” Okezie added.

     

     

  • Insurers kick against financial bidding

    Insurers kick against financial bidding

    •Postpones rebranding project

    Insurers Committee, the body that decides policies and issues in the industry, has agreed to move against financial bidding of insurance business.

    The committee comprises the National Insurance Commission (NAICOM) and chief executive officers of insurance firms.

    Briefing reporters after the Sixth Insurers Committee meeting in Lagos, the Vice Chairman, Sub-Committee on Publicity, Mrs. EbelechukwuNwachukwu, said it was not proper for organisations to ask for bidding fees from insurance companies.

    He said the issue of insurance companies participating in financial bidding was sensitive  and that it formed their major discourse at the meeting, adding that the committee has postponed the industry rebranding project next January.

    She also said the regulatory body, the National Insurance Commission (NAICOM), had released the draft roadmap of the industry’s risk base supervision for insurance operators to make their recommendations.

    According to her, the draft was unveiled by the Commissioner for Insurance, Mohammed Kari, at the meeting giving the operators one month period to critically examine the draft and inject their contributions.

    She said risk base supervision would enable insurance undertake risks in line with their financial capability.

    “We discussed the issue of financial bidding of insurance business and without mentioning any organisation. We feel that it is not proper for them to ask for bidding fees from insurance companies.

    “It was a very sensitive discussion and it took quite an extensive time discussing it. When you talk about financial biding, different organisations with different policies have their ways. Some may just decide that they want to take a particular circle but what we eventually agreed is that we should come together as an association to promote the interest of the industry.

    “Some of us brought up the issue that if an organisation decides to bid and the regulator threatens to penalise the person for doing a financial bidding, how does the organisation sue the regulator for doing that because the insurance company is licensed to conduct business. We also looked at financial bid, and asked ourselves that should it be a quarterly amount or something substantial and that is how we came about to say we should totally abstain from it. So, whoever requires it will know that the industry is speaking with one voice and that was where the argument ended,” he said.

    Head, Corporate Affairs, National Insurance Commission (NAICOM), Rasaaq Salami, who spoke on the suspension of the rebranding project from October 1, this year to next January, said the suspension was due to the committee’s inability to fund the budget.

    Salami explained that the committee would use the extension period to get the funds together before starting the campaign.

    “We informed you at the last Insurers Committee that the rebranding campaign would take off on October 1 but because of the budget constraint we have encountered, it has been postponed to early next year 2017.

    “The committee discovered that they need to include the fund required in their respective organisation budget and postponing the project will allow them to do so. It will also enable the committee to use the period to get the funds together before we start the campaign so that we don’t get stuck at the middle,” he said.

     

  • ‘HMOs not paying regularly’

    DIRECTOR-GENERAL, Nigerian Institute of Medical Research (NIMR), Lagos Prof Lawal Babatunde Salako has accused health maintenance organisations (HMOs) of not paying hospitals regularly, urging the government to look into the matter.

    He spoke at Healthcare Leaders conference organised by Medic West Africa as part of their three-day exhibition at Eko Hotel, Victoria Island, Lagos, which ended at the weekend.

    Salako, who represented the Minister of Health, Prof Isaac Adewole, said although the HMOs receive their payments directly from contributors, they do not pay on time. He said though the supervising government agency had promised to look into the matter, nothing had been done.

    The National Health Insurance (NHIS) was initiated by the government as a public-private participation model to make health available to the masses. The NHIS was designed to be driven via the HMOS.

    According to sources, one of the HMOs has no fewer than 155,109 enrolees from various government departments.

    Salako said the health insurance scheme was the best way to go. He however lamented that the scheme, which was launched by former President Olusegun Obasanjo in 2005, had only been  embraced by the Federal Government for its workers. He advised the governors of the 36 states to embrace it. The more workers join, he said, the more money would be available for hospitals.

    Participants at the event said the attitudes of the HMOs could thwart the scheme, if nothing was done.

     

  • Why our products are unique, by FBN Insurance, FBN General

    Why our products are unique, by FBN Insurance, FBN General

    Products of FBNInsurance Limited and FBNInsurance General Limited have been tailored to suit every household and business in the country, FBNInsurance Managing Director, Val Ojumah has said.

    He made this known while unveiling their products at the Media Product Fair in Lagos. The managements of both firms took time to highlight the array of products to carter for risks faced by the public.

    Ojumah, who said the FBNInsurance group has evolved, said FBN General and FBN Insurance brokers are subsidiaries of the group which is under First Bank holding company.

    According to him, the coming of the firms into underwriting business has helped change the landscape of the insurance industry as they have continued to occupy more grounds at a time many of their peers are running around looking for investors to help shore up their capital.

    He said they have over 100 year’s heritage each from First Bank Nigeria Plc and Sanlem Group, as investors in FBNInsurance seperate them from other insurance firms in the industry.

    He said the firms’ claims payment records remain one of the best in the industry and that they work round the clock to ensure customers’ claims are attended to promptly.

    He noted that the company’s products are affordable, adding that their rates are not the cheapest and are also not the most expensive.

    He stressed that it is important for insurance companies to do adequate pricing so that they can meet pay claims.

    He said: “It is important for insurance firms to do what they say. We are here to pay claims. We will not be the cheapest and certainly not the most expensive firm in terms of rate.

    “One of the main competitive tools in the industry today is pricing. Many insurance companies are prepared to  take next to nothing in order to sell their products. We will not do this because it is not healthy for us to do’’.

    He said their life and general insurance firms connect in both formal and informal ways to share services to achieve one goal which is providing insurance services in a unique way to satisfy their clientele.

    Managing Director of FBNInsurance General, Bode Opadokun  said the company within the very short time of operations has transformed general insurance business through the array of products in its kitty.

    Some life transforming products presently in the kitty of the General business include: Fire and special peril, motor insurance, plant and all risk policy, personal accident marine cargo and more.

    FBNInsurance has flexible education plan, easy save plan, flexible saving plan, flexible cash flow plan, family income protection plan, extended family support plan, guarantee lifetime retirement income plan, annuity and many more, he said.

    Opadohun added that —

  • AfricaRe, Custodian, others can meet obligations, says report

    African Reinsurance Plc has the ability to meet its ongoing insurance obligations, A.M. Best Company, the world’s oldest and most authoritative insurance rating agency, has said.

    According to the agency, Continental Reinsurance Plc has an excellent ability to meet its ongoing insurance obligations.

    Custodian and Allied Insurance Plc and Axa Mansard Insurance Plc were however said to have financial strength and ability to meet their ongoing insurance policy and contract obligations.

    But Wapic Insurance Plc on its part has a fair ability to meet its ongoing insurance obligations but its financial strength is vulnerable to adverse changes in underwriting and economic conditions.

    This was made known in A.M. Best’s latest edition of Non-US Ratings Monitor.

    The organisation unveiled the latest Financial Strength Rating (FSR) and Issuer Credit Rating (ICR) of the five Nigerian based insurance outfits rated by the organisation.

    Associate Director, Market Development and Communications, A.M. Best-Europe, the Middle East and Africa (EMEA), Dr. Edem Kuenyehia said Continental Reinsurance Plc got B+ Stable (FSR) bbb- Stable (ICR), Custodian and Allied Insurance Plc got B Stable (FSR) bb Positive (ICR), Axa Mansard Insurance Plc was assigned B+ Positive (FSR) bbb- Positive (ICR) and Wapic Insurance Plc got B- Stable(FSR) bb- Stable (ICR).

    Kuenyehia explained that FSR indicates an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations, while the ICR specifies an insurer’s financial strength and ability to meet its ongoing senior financial obligations.

    He said: “The FSR of African Reinsurance was A, meaning that the company has an excellent ability to meet its ongoing insurance obligations. Continental Reinsurance’s B+ means the firm has a good ability to meet its ongoing insurance obligations.’’

     

  • ‘NAICOM’s policies refining industry operations’

    ‘NAICOM’s policies refining industry operations’

    Industry operators have said the radical policies introduced by the National Insurance Commission (NAICOM) have improved their operations.

    Former President, Nigerian Council of Registered Insurance Brokers (NCRIB), Babatunde Olatunde-Agbeja, at a briefing in Lagos, said NAICOM was doing a good job.

    Olatunde-Agbeja, also the Chief Executive Officer, Boff & Company Insurance Brokers, said he had since ensured that his company observed a zero tolerance for non-compliance with NAICOM regulations.

    Mutual Benefits Chairman, Akin Ogunbiyi, said the degree of regulation of the industry was high.

    According to him, the commission introduced new guidelines, which included Market Conduct and Business Practice Guidelines and the Prudential Guidelines aimed at repositioning the Industry, boosting insured’s confidence and maintaining financial stability of the players in the industry alongside codes of corporate governance issued by various regulators.

    Ogunbiyi said increased regulation was an inescapable reality for the industry, adding that  it made sense to engage with regulators constructively.

    He said: “Our priority is to be at the fore front, and treat regulatory change as a way of increasing competitive advantage and creating new values. In addition, the new Commissioner for Insurance, Mohammed Kari inaugurated the Insurers’ Committee, which comprises all the chief executive of insurance companies in Nigeria and creates a platform to regularly meet with the Commission on the issues and challenges facing the industry.

    “For us at Mutual benefit, we are poised to deepen market penetration and customer acquisition; embed customer and service delivery excellence; transform people and culture; and drive operational effectiveness.”

    Royal Exchange Assurance PLC  Chairman, Kenneth Ezeanwani Odogwu said NAICOM had focused on a number of reforms in the industry.

    He said they included amongst others, Risk-Based Solvency (RBS), Supervision; Code of Corporate Governance Enforcement; Market Conduct and claims settlement reforms.

    “The apex regulator has also pushed for a 10-year tenure limit regulation for chief executive officers (CEOs) in its drive to engender good corporate governance in the industry.

    “Policy guidelines barring insurance companies from investing in businesses abroad and in their parent’s companies were also introduced. According to the policy, insurers are now excluded from investing in derivatives except in cases where approval is sought from the commission.

    “In addition, 20 of total current account balances and bank placements now represents the maximum acceptable placement for operators with any particular bank. Likewise, insurers are restricted from investing in companies that have neither reported profits nor paid dividend in the last three years.

    “NAICOM ordered operators not to outsource their investment functions without prior approval from the commission as well,” he said.

  • Anchor grows income by 23%

    Anchor grows income by 23%

    •Three directors retire 

    Anchor Insurance Company Limited said it has increased its gross premium income by 23 per cent from N1.905 billion in 2014 to N2.342 billion in the financial year ended December 31, 2015.

    Its Managing Director, Mayowa Adeduro, made this known in Lagos at the Pre-Annual General Meeting media parley in Lagos.

    He said the Annual General Meeting (AGM) is slated for October 14, at Uyo, the Akwa Ibom State capital.

    According to Adeduro, the company’s total assets showed a growth of seven per cent with N5.4 billion recorded in 2015 compared to N5.0 billion in 2014, adding that average gross premium growth for five years was 21.4 per cent while the company’s total claim for the year increased by 85 per cent from N273 million to N505 million in 2015.

    He also said the company paid N1.43 billion in claims for five years, adding that it managed its level of activity during the year as its net premium income increased from N1.63 billion in 2014 to N1.842 in 2015 representing an increase of 13 per cent.

    The board and management of the company, he assured, were certain that the company’s future was brighter, but refrained from commenting on dividends to the shareholders.

    Adeduro, however, announced the retirement of three directors from the company having served the stipulated time as regulated by National Insurance Commission (NAICOM). They are: Dr. Michael Ntuk, Barrister Bassey Anwanane and Dr. Ime Emerson Udom.

    He said Anchor Insurance was set to launch her newest product: Anchor Loss of Employment Insurance Scheme (LoIES). “With a penchant for prompt claim payment and innovative insurance products, Anchor Insurance is set to launch her newest product: Anchor Loss Employment Insurance Scheme (LoIES). A product designed and approved by NAICOM to meet the yearning of insuring public for innovation to address contemporary challenges of working class in the event of loss of job. This product guarantees a maximum 24-month salary payment after job loss,” he added.