The Nation Newspaper

Category: Insurance

  • Cornerstone profit soars by 60 per cent

    Cornerstone Insurance Plc’s profit went up by 60 per cent in the 2013 financial year when compared to 2012.

    The financial report presented during the 22nd Annual General Meeting (AGM) of the company in Lagos showed that its gross premium grew by 15 per cent from N4.6 billion in 2012 to N5.3 billion last year.

    The company’s underwriting result, however, dipped 30 per cent from N1.2 billion in 2012 to N866 million in 2013 as a result of 15 per cent increase in reinsurance expenses, which grew from N1.6 billion in 2012 to N1.9 billion in 2013 and net claim expenses that went up by 18 per cent from N985 million in 2012 to N1.1 billion in 2013.

    A combination of robust investment performance and disciplined control of operating expenses resulted in an increase in profit after tax from N544 million to N870 million.

    Based on this performance, the company recorded 16 per cent growth in the Total Asset from N12 billion to N14 billion.

    The company’s Group Managing Director, Ganiyu Musa while speaking at the AGM stated that the company  will continue to build on the strength of its people and the commitment to core values including strong ethics and innovation that will in turn make it the insurance of choice in the country.

    The Group Chairman, Cornerstone Insurance, Adedotun Sulaiman, said the company believes strongly that insurance remains fragmented and there continues to be a need for consolidation of the industry to fast-track building scale and capacity.

    He said their efforts in this direction have continued through 2013. “We have identified a company with complimentary attributes and values and at this meeting, we therefore, ask for shareholders’ approval to proceed with the business combination,” he said.

    Consequently, the shareholders gave their nod, authorsing the board to acquire 3.3 billion ordinary shares of FIN Insurance, which will make Cornerstone 100 per cent ownership.

  • NAICOM seeks govt’s intervention in Group Life Assurance

    NAICOM seeks govt’s intervention in Group Life Assurance

    The National Insurance Commission (NAICOM) has appealed to the Office of the Head of Service of the Federation (OHOSF) to look into the challenges of Group Life Insurance scheme for federal workers and the insurance of Federal Government assets and properties.

    The Chairman of the Governing Board, Hon. Chibudom Nwuche, made the call during a courtesy call on the Head of Service of the Federation (HOS) Danladi Kifasi in his office in Abuja by the management of the Commission. Nwuche led the board to see how the company can partner with the government to enhance implementation of the compulsory Group Life Insurance cover for federal workers.

    Nwuche who expressed appreciation to the HOS for the success achieved so far in the implementation of the Pension Reform Act of 2014 as it relates to the Group Life Insurance scheme for federal workers, noted that the scheme has not operated without some challenges.

    These challenges, he said, range from availability of adequate data for proper administration, timely notification of claims and submission of supporting documents and appropriate pricing of the risk.

    He hoped these issues will be looked into by the HOS to ensure continued success of the scheme for the overall benefit of the federal workers.

    He also said that the insurance of public buildings and buildings under construction be made compulsory under the insurance Act of 2003. He said it is therefore, imperative that all government buildings which fall under public buildings are adequately insured to guard against loss of property and scarce financial resources in the event of any disaster.

    Nwuche requested the HOS to look into the issue noting that the insurance of public buildings under which government buildings fall, is compulsory under the insurance Act of 2003 and NAICOM Act of 1997.

    NAICOM Commissioner for Insurance, Fola Daniel, told the HOS that the insurance industry is prepared to undertake the training of scheduled staff of the OHOSF, especially the officers involved in the management of the scheme to ensure justification and realisation of the set objectives of the scheme.

    Daniel said the industry would also provide specific preventive health training for members on the scheme based on the outcome of the information gathered from the experience analysis of the data in the Commission’s possession and, the enlightenment of scheme members.

    These are members who are close to retirement and need financial planning like choosing annuity to ensure stream of income for the rest of their retirement’s life, he added.

    The HOS, Danladi Kifasi, stated the preparedness of his office to continue the collaboration with NAICOM to ensure continuing success of the scheme.

    He pledged to support the Commission in the enlightenment and education of both scheduled staff and scheme members especially in the area of financial planning.

    He thanked the management of NAICOM for the offer to provide training for scheduled staff and members of the scheme and promised that the OHOSF will remain transparent but strict in subsequent bidding and selection processes to appoint brokers and underwriters for the Group Life Insurance Scheme for federal workers.

  • CIIN to practitioners: Reposition for growth

    The gains of creating a premium position for the insurance industry in the financial services sector and the economy must remain the goal of insurance professionals, President of the Chartered Insurance Institute of Nigeria, Bola Temowo, has said.

    Temowo made this statement at a meeting with the Nigeria Insurers Association (NIA) in Lagos.

    He said professionalism is the bedrock of insurance business and enjoin insurance practitioners to always act professionally, particularly now that our national economy has been rebased.

    He noted that this is the only way they can guarantee that the industry taps fully from growth potentials of the buoyed economy. He added that no amount of awareness campaign will be effective without their individual and collective efforts at advancing the insurance profession by benchmarking international standards.

    He said: “It is my firm belief that we will continue to march forward as an industry and surmount all the challenges facing our profession, if the industry arms continue to act in concert at all times.

    “The CIIN has the major role of providing ample opportunities for education and knowledge sharing and will continue to promote human capital development to guarantee better service delivery.

    “The Institute has therefore, continued to initiate and adopt new measures aimed at attracting more attendance at the major education and training programmes. The College of Insurance and Financial Management is becoming firmly rooted with the far-reaching developments on the construction of the major structures for the take-off of academic activities in September 2014.”

    Temowo reiterated that the institute will resuscitate the development of its building in Victoria Island, commence academic activities at the College of Insurance and Financial Management; establish an E-library; strengthen the study and teaching of insurance in secondary schools and tertiary institutions in Nigeria and provide adequate trained manpower at the institute secretariat for improved service delivery.

  • Pension fees cap could add £1b to savers’ pots

    A cap on excessive pension charges could boost savers’ retirement funds by £1 billion, five times more than previously estimated, one of Britain’s largest insurers has indicated.

    Pension fees will be capped at 0.75pc a year next April under a Government initiative to tackle “rip-off” levies that deplete customers’ savings.

    Ministers initially said this new ceiling would transfer £200 million from insurance company profits “into the pockets of savers.”

    But Royal London, which has 11 million customers calculated that the sum passed to savers by the industry would be monumentally higher.

    Phil Loney, chief executive of Royal London, said: “We estimate the total reduction in long-term insurer income may well reach £1 billion.”

    The cap on charges will apply to workplace pensions linked to the stock market.

    Pension companies such as Royal London take annual fees for managing money saved into company schemes. The charges can range from below 0.5pc a year to more than 2pc. Reducing the higher charges to 0.75pc will allow savers’ funds to grow more quickly to the detriment of pension providers. Royal London profits fell by 49pc the first half of this year as the firm acknowledged it will take less from savers each year.

    David Norman, a campaigner on charges and founder of asset manager TCF Investment, said: “The ordinary saver is entirely justified in thinking – hurrah, this serves the pensions industry right.

    “If on average consumers lose less from their pots in charges, we will all be richer. After all, pensions were not designed to make profit for insurance companies but for savers in old age – at least, that’s how it should be.”

    Justin Modray, founder of Candid Financial Advice, said some of the charges on older pensions were little short of criminal and were only there to pay excessive sales commissions.

    He said things have gradually improved over the years but there is no doubt some pensions remain too expensive. “Insurers are paying the price for treating customers poorly over several decades.”

    However, some commentators warned that reducing charges so quickly could have unintended consequences.

    Loney said the charges cap could do more harm than good, indicating that Royal London and similar providers might hit employers with supplementary fees. These would fall outside the 0.75pc government cap, which relates specifically to the management charges paid by staff.

    Tom McPhail, head of pensions at financial services firm Hargreaves Lansdown, said extra fees outside the cap would be passed on to customers and shareholders.

    “There could be a sort ‘money-go-round’ where insurers put extra charges on employers, who pass these on to staff in the form of lower pay rises and to shareholders in the form of smaller dividends.

    “If that happens there will be little overall benefit to the people the Government is trying to help.”

    Culled from The Telegraph

  • ‘PenCom’s ban on contract staff laudable’

    ‘PenCom’s ban on contract staff laudable’

    The Group Managing Director PensionScope Group, Peter Tai Adediji, has said the National Pension Commission’s (PenCom’s) recent ban on engagement of contract staff by pension operators in their key operations, is laudable because it protects the pension industry.

    In a statement made available to reporters in Lagos, Adediji urged pension operators to avoid imitating other operators who believe in casualisation of their workforce. He said due to the sensitivity of pension business, efforts must be made to forestall avenues capable of creating mistrust.

    He called on the operators to cooperate with PenCom and other stakeholders to ensure that the objectives set in the Pension Reform Act are achieved. Adediji said engagement of contract staff that are often not properly trained and not entitled to some benefits enjoyed by full time employees, portends great threat to the growth of the pension industry.

    He said the restriction is necessary at this time when some members of the public are yet to understand the difference between the old and new scheme, which has built in checks and balances to eradicate fraud.

    He said: “This is a welcome development as the engagement of contract staff is like engaging touts at our motor parks; their usefulness is never lasting. They perform more havocs than rendering unavoidable service to their ‘employers.

    “Governments at various levels have spent a lot to control the excesses of these touts especially where their activities have resulted in the loss of lives.”

    It would be recalled that PenCom in a recent circular, barred licensed pension operators from using contract staff for critical functions in their operations such as  pension administration; benefit administration; fund management and accounting; settlement; safe keeping; contribution collection and administration and information and communication technology.

    The commission hinged its decision on allegations of fraud and improper training of the outsourced staff, stressing that the risks inherent in this arrangement had already started manifesting. It said that there are several cases of fraudulent activities involving these outsourced staff.

    The commission gave all licensed operators that have in their employment outsourced staff in the affected functions, transition period of six months ending in February 2015, to convert their employment to permanent status or replace them with permanent staff.

  • Mansard opens centres

    Mansard Insurance has opened two new Welcome Centres in Enugu and Uyo in Enugu and Akwa Ibom states.

    In a statement by its General Manager, Corporate Commumications, Taiwo Adeleye, the centres would provide an opportunity for its customers to purchase its products and services in life, non-life and health insurance.

    It said customers may also receive after sales services at the centres.

    The Uyo centre opened following the opening of the Mansard Welcome Centre in Enugu by the Special Adviser to the Commissioner of Youth & Sports, Akwa Ibom State, Ese Umoh.

    The welcome Centre in Uyo is meant to serve customers and prospects.

    At the unveiling event,  the commissioner  appreciated the management of the firm for coming to Uyo,  to empower the youths and also increase the awareness and benefits of risk management in the state.

    The ceremony was followed by an awareness walk to sensitise the residents of the town on the usefulness of insurance.

  • IEI pays N616.1m claims

    International Energy Insurance Plc has paid N616.1million claims to its customers at the end of the first half of this year, its Managing Director , Mrs. Roseline Ekeng, has said.

    She said the payment was a demonstration of the firm’s resolve to meet its obligations to its customers.

    She said the claims paid are categorised into Motor, Fire, General Accident, Marine Cargo, Marine Hull, Bond, Oil & Gas, Industrial All Risks, Public Liability and Aviation.

    According to her, the prompt response also indicated its resolve to always act in line with its core values of proficiency, integrity, innovation, dependability and friendliness.

    She said: “Transparency and reliability are the most enduring values to earn customer trust, and these are the values that IEI anchors its business principles upon. Today’s business environment requires more ethical standards.

    “In paying these claims during the first six months of this year, IEI has demonstrated to its clients that it is a company that cares for their welfare consistent with its equity statement. The company boasts of having the most technical and experienced energy underwriting unit in Nigeria.  The company has also created a micro insurance desk in order to tap into the market development initiatives introduced and enforced by the regulatory body, the National Insurance Commission (NAICOM).”

  • PenCom bars operators, others from using contract workers

    Pension operators including  Pension Fund Administrators (PFAs), Pension Fund Custodian (PFCs) and Closed Pension Fund Administrators (CPFA) have been barred from using contract workers in critical positions in their operations.

    Consequently, the Commission has given all licensed operators that have outsourced or contract workers on their pay roll in the affected functions, a transition period of six months, from August 20, to convert their employment to permanent status or replace them with permanent workers.

    A circular obtained by The Nation issued to the operators by PenCom through its Head, Surveillance Department, Mohammad Datti, contained this.

    In the circular, PenCom identified the functions as pension administration; benefit administration; fund management and accounting; settlement; safe keeping; contribution collection, administration and information, and communication technology.

    The Commission lamented that it has observed an increase in the use of outsourced workers from third parties to perform critical functions in pension administration and management as well as custodian services, adding that these workers were often not properly trained while their conditions of service remained poor.

    The circular read: “The risks inherent in this arrangement had already started manifesting, as there are several cases of fraudulent activities involving these outsourced staff.

    “It would be recalled that, when the pension reform was conceptualised, the only function  allowed to be outsourced was sales and marketing to be performed by sales agents.

    “While the commission recognises the fact that every business venture should strive for efficiency and be mindful of overhead expenses, the commission will not allow the situation to be to the detriment of the pension system and services to be delivered to contributors.”

    PenCom however said the operators were at liberty to engage outsourced workers for sales and marketing functions only.

  • CIIN holds forum

    The Chartered Insurance Institute of Nigeria (CIIN) is set to hold this year’s edition of its professional forum.

    In a statement, it said the event, which is scheduled for between September 10 and 13, has as theme:  The insurance industry: New trends, new strategies.

    Its Head, Corporate Communications, Mr. Joseph Obah, said the theme aptly captures the post-economy rebasing in the insurance  environment in terms of new product trends and strategies of harnessing the perceived opportunities.

    He said speakers to address the forum topics are Commissioner for Insurance, National Insurance Commission, Fola Daniel; Deputy Commissioner for Insurance, George Onakhena; Managing Director, Niger Insurance Plc, Dauda Adedeji; Group Managing Director, Mutual Benefits Assurance Plc, Dr. Akin Ogunbiyi; Managing Director, Financial Institute Training Centre, Dr. Lucy Newman and Managing Director, Consolidated Hallmark Insurance Plc, Eddie Efekoha.

    The CIIN President, Mr. Bola Temowo, said the financial inclusion strategy might top the agenda in view of the human capital realignment imperatives for driving the financial inclusion products, such as micro insurance and Takaful.

     

  • Union Assurance to unveil new owners soon

    Union Assurance Company Limited will soon unveil its new owners, its Managing Director, Godwin Odah, has said.

    Odah, who made this known at the Monthly Members Evening of the Nigerian Council of Registered Insurance Brokers (NCRIB) in Lagos, said the revelation would be  as soon as the approvals were obtained.

    Speaking on its parent company’s (Union Bank) divestment plan, he said following the Central Bank of Nigeria’s (CBN) directives on universal banking, the bank is in the final stage of complying with the requirement by divesting its 93 per cent shareholding in Union Assurance.

    He said the company has been able to reduce its dependence on revenue from Union Bank Plc significantly from about 75 per cent in 2008 to 15 per cent to date.

    He said by way of numbers, the firm’s income from the brokers channel has grown from 12 per cent in 2009 to over 55 per cent.

    According to him, the management has also steered the company through the difficult years of the CBN’s intervention in the bank spanning from 2009 to 2012.

    Odah added that the firm has diversified its income base by deepening focus on opportunities outside the Union Bank Group by building credibility with brokers; aggressive expansion of Union Assurance foot prints of life retail with over 1,350 agents across the country and 24 full-fledged branches and six representative offices, among others.

    According to him, the company has however earmarked key strategic initiatives frunning from this year through 2018.

    He said these include the creation of a micro-insurance model that will enable it leverage affinity groups thereby achieving a lower acquisition cost for this important segment.

    He said: “We intend to participate in large transactions, particularly in the energy and power sectors, where the firm would seek to partner with big lenders such as FirstBank, Union Bank, Stanbic IBTC Bank and Standard Chartered Bank.’’

    Odah further said the firm will improve its brand visibility and awareness among the young and upwardly mobile middle class while service and product innovation will enable it deliver.

    He said: “We also aim to develop bespoke products that meet our clients’ risk and business demands; target segments within the emerging affluent markets; enlarge our retail force from 1,400 to at least 2,000 this year; create an online store with an improved business process that enables us deliver our products seamlessly across multi channels group and affinity lines. We will also deepen our relationship with the top tier brokers. Because of the complex nature of insurance, we will continue to play a major role in the industry, particularly in the commercial segment of our business.

    “The company will also effectively leverage extensive branch network,  to strengthen our growth in the retail and public sector, particularly among the growing states of Rivers, Delta, Akwa Ibom and Cross Rivers; improve on our employee knowledge, skill and ability and build capacity and technical competence in the big ticket businesses such as oil and gas, power, telecom.”

    He said this year and next year promise to produce interesting and exciting performance for the company as it transits through these phases.