The Nation Newspaper

Category: Insurance

  • ‘Many Lagos bus drivers operate without motor insurance’

    Many commercial bus drivers in Lagos State do not have third party motor insurance as required by the Federal Government, The Nation has learnt.

    Third party motor insurance insures you or any other driver of your vehicle against liability for death or injuries you may inflict on other road users as a result of a motor vehicle accident for which you or the driver of your vehicle are at fault. Coverage extends to passengers of all vehicles involved in the accident, pedestrians and cyclists.

    The government is concerned and want to protect the third parties involved in an accident thus making third party motor insurance compulsory for every vehicle owner to register a vehicle in the country.

    It is also a global practice to have vehicle insurance before using or keeping a motor vehicle on public roads.  The Nigerian Insurance Act 2003 prescribed for compulsory Third-Party Motor Insurance in Section 68 of the Insurance Act, 2003.

    Section 68 of the Insurance Act and Section 3 of the Motor Vehicle (Third Party) Insurance Act requires that no person shall use, or cause or permit any other person to use, a motor vehicle unless such a motor vehicle is insured against damage to the property of third parties.

    Insurance companies, however, charge N5000 as base premium per annum for third party motor insurance.Despite the amount considered cheap for vehicle owners, many still do not purchase it while some buy fake for between one and three thousand naira. Some are ignorant of the benefits with only a few road users buying the genuine policy. Stakeholders in the industry at various fora have said this was possible as a result of lack of enforcement of the law by the government.

    In an interview with commercial bus drivers in Lagos by The Nation, it was gathered that they simply buy fake insurance papers referred to as’Police make I pass’.

    Abdulrahman Salami who drives a commercial bus in Ketu area of Lagos, said he does not need to get insurance papers from insurance operators.

    According to him, all he needs do is get fake insurance papers to avoid the police from arresting him.

    He said: “I don’t need to buy from the insurance companies. All I need is get a fake insurance paper which we call ‘Police make I pass‘.

    “We get our insurance papers with all the particulars of our vehicles so we do not get stopped and searched on the road by police officers or vehicle inspection officers.”

    Another bus driver at Ojuelegba area, Oluwadare Olugbenga, said he does not believe in insurance operators because when there is a problem, they will abandon them and not listen to their claims.

    Kola, a bus driver at Mushin, said he thought that it is only private vehicle owners that need  insurance.

    Tope Akanbi, at Ojuelegba, Lagos says he does not believe in insurance companies because they do not tend to their needs when there is a claim.

    Mubarak paid N7000 to get his insurance papers from a friend instead of paying the third party fee of N5000.

     

  • Pension funds burn cities as $1tr shortfall set to grow

    The cost to American cities for their cash-strapped pension funds is starting to look a lot worse, and it’s not because the stock-market rally may be losing steam, Bloomberg has reported.

    Houston was warned by Moody’s Investors Service this month that it may be downgraded because of mounting retirement bills, the latest municipality put on notice as the company ignores bookkeeping gimmicks that let cities mask the size of their debt for years. The approach foreshadows accounting rules for even top-rated issuers that are poised to cause pension shortfalls to swell as new financial reports are released.

    “If you’re AAA or AA rated and you’ve got significant and visible unfunded pension obligations, you’ve only got one direction to go in terms of rating, and that’s potentially down,” said Jeff Lipton, head of municipal research in New York at Oppenheimer & Co. “It’s the presentation on the balance sheet that is now going to drive urgency.”

    Cities that shortchanged pensions for years are under growing pressure to boost their contributions, even after windfalls from a stock market that’s tripled since early 2009. Janney Montgomery Scott has said growing retirement costs are “the largest cloud overhanging” the $3.6 trillion municipal-bond market, where investors are demanding higher yields from borrowers under the greatest strain.

    Chicago pays

    That was on display this week for Chicago, whose credit rating was cut to junk by Moody’s in May because of a $20 billion pension shortfall. The city was forced to pay yields of almost 8 percent on taxable bonds maturing in 2042, about twice what some homeowners can get on a 30-year mortgage.

    Estimates of the pension-fund deficits facing states and cities vary, depending on the assumptions used to calculate the cost of bills due over the next several decades. According to Federal Reserve figures, they have $1.4 trillion less than needed to cover promised benefits.

    Officials have been able to lower the size of the liability by counting on investment earnings of more than 7 percent a year, even after they expect to run out of cash. New rules from the Governmental Accounting Standards Board require a lower rate to be used after retirement plans go broke. Many reported shortfalls will grow as a result.

  • Prestige records N2.65b premium income

    Prestige records N2.65b premium income

    Prestige Assurance Plc has written a recorded a gross premium of N2.65 billion in the financial year ended 2014, the company Managing Director, Balla Swamy has said.

    He made this known at the Company’s 45th Annual General Meeting (AGM) in Lagos.

    According to him, profit for the year was N176.75 million while reinsurance expenses stood at N1.52 billion.

    He added that while taxation stood at N160.8 million during the year under review, retained earnings stood at N14.18 million.

    He said the net premium income is N1.33 billion, profit before taxation is N176.75, profit after taxation is n14.18 million, total assets is N11.89 billion and shareholders’ funds is N4.58 billion.

    Speaking on prompt claims payment, Swamy said the company continues to improve on its prompt claims payment policy with the sum of N1.93 billion payout in 2014.

    He added that the solvency margin of the company in the year under review is N4.69 billion as against the N3 billion required noting that this bears a testimony to the strength of the company.

    He pointed out that the 63 years old company is set to reposition its business and turn around its fortune through delivery of prompt, efficient and qualitative services to its numerous clients, constantly rewarding its shareholders with adequate returns on their investments and also contribute to the development of insurance business in the Nigerian economy.

    He added that in the quest to reposition the Company in the industry and increase its share capital, it offered for subscription N1.5 billion rights issue which was 113.59 per cent subscribed.

    He said: “In a renewed vigor for providing excellent on-line-real-time services, the Company has launched its operations into Cloud which is accessible via cloud computing whereby large group of remote servers are networked so as to allow sharing of data-processed tasks, centralised data storage, and online access to computer services or resources via the browser.

    “In pursuant to the positive impact of good corporate governance structure in every forward looking organization, the Company remained committed to the principle that promotes good corporate governance hence there is constant review of processes and practices to ensure compliance with the legislative and best practice changes in the global corporate governance environment.

    “In support of the local content in Nigeria, Prestige is finalising reinsurance program for oil and energy treaty to the tune of $10 million covering Nigerian oil and energy risks both on shore and off shore and five million US$ for aviation.”

    He stressed that the company was embarking on opening of more branches in addition to its four branches in order to reach easily and serve efficiently our numerous clients.

    As a proactive organisation, Prestige has positioned itself as a mega financial supermarket for its esteemed clients by offering Lease Financing, Guaranteed Commercial Papers, Bankers’ Acceptances and investment in real estate for letting to positively reflect in the company’s performance, he said.

     

  • IAIS begins public consultation on HLA

    The International Association of Insurance Supervisors (IAIS) has begun a public consultation to help finalise development of the Higher Loss Absorbency (HLA) requirement for global systemically important insurers (G-SIIs).

    The IAIS is seeking feedback through 21 August on several options to further support and inform the design, development and calibration of the HLA.

    In July 2013, the IAIS published its assessment methodology and policy measures for G-SIIs. These policy measures include a HLA requirement, the primary purpose of which is to help reduce the probability and impact on the financial system of the distress or failure of a G-SII. The HLA is to be delivered to the G20 for endorsement in November 2015 and will apply to G-SIIs from 2019.

    As a foundation for HLA requirements, the IAIS developed in October 2014 the Basic Capital Requirements (BCR) to apply to all group activities, including non-insurance activities, of G-SIIs. When the HLA is implemented, G-SIIs will be expected to hold qualifying regulatory capital that is not less than the sum of the required capital amounts from the BCR and HLA. The public consultation does not focus on specific formulas but rather seeks feedback on a structure designed to address the key objectives of risk sensitivity, robustness and simplicity.

    The IAIS has also released additional information regarding the development of its risk-based, global insurance capital standard (ICS), which will apply to internationally active insurance groups (IAIGs) as part of the IAIS’ common framework for the supervision of IAIGs, or ComFrame.

  • NEM Insurance repositions to grow its oil and gas business

    NEM Insurance Plc is deploring resources in increasing its contribution to the oil and gas business in the country, Group Managing Director of the company, Tope Smart has said.

    He made this known during a  briefing and facility tour of its multi-million naira head office in Lagos.

    Smart said the company had positioned itself to deepen insurance penetration in oil and gas and become one of the top three insurance firms in the country.

    Aside, the company was also looking at partnering other insurance companies by way of acquisition or merger to become a big player in the insurance industry locally and globally, he added.

    He also said that the company’s new headquarters has impacted not only on the company’s image but on the insurance industry.

    The industry has moved from where it was five years ago with a lot of potentials in the industry.

    The issues of confidence and lack insurance awareness that have held the industry down is fast easing out.

    This he said, has been addressed by the positive response of insurance companies to claims payment.

    He said: “It is good to have a structure of this nature in the industry. The building has impacted on NEM and on the industry. Since the commissioning of the building, we have been receiving several visitors and many of them have been surprised that this can happen in an industry that has been written off. But now it is making progress particularly with this kind of structure in place and they now believe that there is a great future ahead.

    “We are excited that the level of confidence in the industry is totally different from what it used to be before. The level of confidence has risen and to that extent, so many people now believe in the industry. You will agree with me that the industry has improved by way of response; response to some of the big claims which is in billions of naira that happened in the last five years. This gives a kind of confidence in the insuring public. Some of the busineses that were taken abroad four to five years ago have come back to Nigeria because of the kind of response that the industry gave to claims payment.”

    The NEM boss emphasised that on the part of the company, it had always been responsible, reliable and faithful to its clients.

    “Although we are not yet there but we are evolving and our focus is to be one of the top three insurance company in Nigeria. There is a lot of prospect and the potential in the industry. We have reengineered our operation and tried to differentiate our brand from others through our attitude and character.

    “We have had influx of foreign investors in the country and people have been talking about consolidation. I agree that there must be synergies for us to grow faster. The bigger we get, the better for us. We at NEM are looking at towards partnering either by way of acquisition or merger. We believe that it improves on the entire industry.

    “Insurers should not be threatened by the foreign investors because it is good competition that will separate the boys from the men. So, it is a welcome development,” he added.

  • NIID records 3,281 genuine marine certificates

    NIID records 3,281 genuine marine certificates

    A total of 3,281 marine policies have been uploaded on the Nigerian Insurance Industry Database (NIID) by 19 member-companies as at last May, Chairman, Nigerian Insurers Association (NIA), Godwin Wiggle, has said.

    The NIID is an instrument by the NIA to phase out fake insurance certificates.

    The Data base facilitates the easy collation and dissemination of information on all classes of insurance, and also serves as a platform for easy identification of genuine insurances by security agencies and other relevant authorities.

    The NIA chair, said the marine module of the NIID had become functional and member-companies have started uploading their marine certificates.

    He said following the observed leakages in marine business, the NIID was extended to curb the fraud of fake marine certificates.

    He noted that the association has sustained engagement with the relevant stakeholders such as CIBN, Nigerian Council of Registered Insurance Brokers (NCRIB), Nigerian Customs Service and NAICOM to seek their support for the initiative.

    He said: “The aim is to plug the leakages in import business resulting in loss of billions of naira premium accruable to the insurance industry.

    “I urge members to support this laudable initiative by uploading their marine certificates in respect of imports. This attests to the general acceptability of this project and the need to support it in the interest of the industry and the national economy.

    “I am optimistic that before long, the industry will begin to count the gains of these initiatives by way of increased premium income.”

    Speaking on developments of the insurers Energy and Allied Insurance Pool of Nigeria (EAIPN), he said the pool has become operational.

    “In furtherance of the association’s desire to curb capital flight, promote the local content policy, build local capacity in Oil and Gas underwriting and increase retention of oil business locally, the Energy And Allied Insurance Pool of Nigeria promoted by the Association has become fully operational.

    “The technical management board has been inaugurated while Africa Re has been appointed as Pool manager. Nineteen-member companies have so far subscribed to the pool.”

    He appealed to members, who are yet to subscribe to the pool to do so as there is strength in large numbers to urge to them to cede to the pool to grow the capacity of the local market.

    Wiggle further disclosed that to boost human capital development, the association in 2013 initiated a scholarship scheme for a Masters in Actuarial Science in any university abroad.

    He added that members are encouraged to support this laudable initiative so that it can be sustained in the coming years as the association is desirous of continuing the sponsorship programme to build capacity in the actuarial profession.

    The association is also strengthening its collaboration with GIZ, a German Trust company, to boost micro-insurance underwriting. The organisation has held a workshop on agric insurance underwriting for underwriters. Also, the association is partnering CICA-RE to train underwriters on some aspects of reinsurance.

     

  • LASACO chief, others for conference

    The Group Managing Director, Lasaco Assurance Plc, Olusola Ladipo-Ajayi has been slated as a guest speaker at the maiden conference of the Insurance Industry Consultative Council (IICC), which will hold between July 26-28, in Abuja.

    It will feature Frank O’neil, Managing Director, SWISS RE, ME & A; Bismark Rewane, Managing Director, Derivatives Ltd and Demola Aladekomo, Director, Chams Group, as paper presenters.

    Sessions’ chairmen include Mr. O.S. Thomas, the Director-General, Nigerian Insurers Association; Alhaji Mohammed Kari, Deputy Commissioner (Technical), National Insurance Commission; Sir M.O. Oyegunle, Managing Director, Lakeg Nigeria Ltd; Mr. Oye Hassan-Odukunle, Managing Director, Leadway Assurance Co. Ltd and Mr. E. K. Okunoren, Deputy President, Nigerian Council of Registered Insurance Brokers (NCRIB).

    Titled: ‘Developing Insurance business for national growth’, the conference will take critical look at various issues affecting insurance business in Nigeria and how it can support national growth.

    Papers will be presented on topics, such as developing insurance business for national growth, regulation and enforcement for insurance growth, information technology as a strategy for market penetration and expansion and growth options for insurance business in Nigeria.

  • Embrace insurance, Lagosians urged

    • ARIAN, NIA on road show

    Lagosians have been urged to embrace insurance. A lawmaker in Lagos State, Hon. Rotimi Olowo, made the call during a visit to the state House of Assembly by some insurance operators.

    They later embarked on a road show to promote insurance awareness among the people of the state.

    The event organised by the Association of Registered Insurance Agents of Nigeria (ARIAN) featured the officers of the Nigerian Police and that of the Federal Road Safety Commission (FRSC), who stopped vehicle owners at Ikeja to check if they had genuine motor insurance policies.

    The insurance companies that embarked on the road show were AIICO Insurance Plc, Royal Exchange Insurance, Niger Insurance Plc, Leadway Assurance Co.Ltd, Lasaco Assurance Plc, Mutual Benefit Assurance Ltd.

    Olowo promised to help the operators in legislation to promote the insurance business. He said insurance is a life-saving business hence the need for the public to embrace it. He advised the firms in the state to do more campaigns on insurance awareness. He also said there was the need for every business in the state to be insured.

    He called on police, FRSC and Vehicle Inspection Operation (VIO) officers on the road must ensure that all vehicles have a third party insurance.

    He asked the operators to stop unscrupulous elements in the state from selling fake insurance to the people.

    ARIAN President, Gbadebo Olamerun, said the event was held to draw attention to the evils of fake insurance policies in the state and how they could be eradicated. He said most vehicle owners do not have genuine motor insurance policies.

    Director-General, Nigerian Insurers Association (NIA), Sunday Thomas, praised the state government for embracing insurance in the state.

    He pleaded with the government to assist the sector by ensuring that it makes insurance a compulsory practice in the state.

  • Insurance premium tax rise’ll add £35 a year extra to bills

    The United Kingdom (UK) insurance sector has reacted with disappointment to the rise in insurance premium tax (IPT) announced by Chancellor George Osborne in the budget

    Motorists can anticipate a rise in their annual insurance premiums of between £12 and £13.

    The industry estimated the increase in the basic rate of IPT from six per cent to 9.5 per cent from November, this year would add between £10 and £12 to the average buildings and contents policy, and £12 to £13 to a yearly motor insurance bill.

    Price comparison website moneysupermarket.com said an average two-car household could expect to pay around £35 extra a year for home and car insurance.

    AA Insurance said the “outrageous hike” could backfire “by leading to an increase in uninsured drivers”.

    Huw Evans, Director-General of the Association of British Insurers, said: “It’s very disappointing to see a more than 50 per cent tax increase being imposed on consumers, especially when the insurance industry and government has worked so hard in recent years to bring down the cost of essential insurance.”

    Steve White, chief executive officer, British Insurance Brokers’ Association, said his organisation was extremely disappointed.

    “The government has been working with the industry to reduce the cost of insurance for consumers including a summit chaired by the prime minister. It therefore seems counterintuitive to be taking measures which will add to the cost effectively taxing protection. We hope the government will review this rise and correct it in further budgets,” he said.

    Alexis Roberts, partner in the insurance team at law firm Pinsent Masons, said insurers would be concerned on how the change could have a negative effect on sales.

    Naomi Saragoussi, health and protection lead at PwC, warned private medical insurance would be the cover worst affected. “This will result in private medical premiums increasing by between 7.5 per cent and 15.5 per cent a year. It will also impact employees’ taxable benefit, as IPT is included in an employee’s overall P11D liability,” she said.

    “An increase in premiums due to an increase in IPT may result in some individuals and companies unable to afford private medical cover, increasing pressure on the NHS.”

    Her colleague Ben Flockton, insurance tax partner, added: “Insurers will also be concerned about whether this represents part of a gradual move towards aligning the IPT rate with the VAT rate, something we have already seen in other EU member states.

    “On a more positive note, the announcement of transitional provisions around the rate rise should allow insurers to manage the change with less difficulty than in 2011. Insurers’ concerns around the way that change was implemented have been recognised.”

    But Pinsent Masons’ Roberts added that greater regulation of claims management companies, which are perceived to drive up insurers’ costs, would be welcomed by the sector.

  • ARIAN, NAICOM train 300 agents

    ARIAN, NAICOM train 300 agents

    The Association of Registered Insurance Agents of Nigeria (ARIAN) and the National Insurance Commission (NAICOM) have trained over 300 insurance agents.

    ARIAN President, Gbadebo Olamerun, who made this known in Lagos, said the training was sponsored by NAICOM to increase insurance penetration and it is the first of its kind in the industry.

    According to him, the Commission realise that it is better to train the foot soldiers – insurance agents.

    He said the agents trained represents agent managers, regional managers, unit managers and agency controllers from over 15 firms.

    He noted that the agents would further drive the agenda of the Commission on the Market Development Restructuring Initiative (MDRI)

    He stressed that the Commission expected them to increase  penetration, demystify the urban transactions common in the industry to urban rural.

    The training will help the agents to reach the nooks and crannies of the country. “There is no way we can achieve the goals without adequate knowledge,” he added.