The Nation Newspaper

Category: Insurance

  • IGI’s subsidiary to list on Kenyan Stock Exchange

    IGI’s subsidiary to list on Kenyan Stock Exchange

    National Insurance Corporation Limited (NIC), a subsidiary of the Industrial and General Insurance Plc (IGI) in Uganda, is set to cross-list its shares on the Nairobi Securities Exchange, in the neighbouring Kenya.

    The listing of a company’s common shares on a different exchange than its primary and original stock exchange is called cross-listing.

    NIC’s Vice Chairman, Dr Martin Aliker, who represented the Chairman, Mr. Remi Olowude, explained that the decision for the listing on the Nairobi bourse, East Africa’s most advanced capital market, was reached during the 13th Annual General Meeting (AGM) of shareholders held recently in Kampala, the Ugandan capital.

    He said the listing is part of the strategic initiatives aimed at giving NIC better access to a diverse pool of investors and improve its competitive edge in the East African region.

    He said: “Cross-listing of the shares will lead to better visibility, improved competitive edge in the regional markets, increased share liquidity, better price discovery, access to a wider pool of both sophisticated and retail investors, and better prospects of raising capital.”

    The Managing Director of NIC, Mr Bayo Folayan, said the firm intends to change its name from National Insurance Corporation Limited to NIC Holdings Limited.

    IGI Plc acquired majority shares in the NIC in 2005 after a competitive international bidding. IGI is also the largest single shareholder of SONARWA, the number one insurance firm in Rwanda, with a shareholding of 64 per cent.

  • Policy sale through SMS, internet dangerous, says Staco boss

    Policy sale through SMS, internet dangerous, says Staco boss

    The Managing Director, Staco Insurance Plc, Sakiru Oyefeso, has kicked against the sale of insurance policies through internet, social media and short messages (SMS) by telecoms companies, warning underwriters of the danger of using such channels to drive insurance business.

    He warned underwriters that approach telecoms companies to establish unsolicited relationships, to have a rethink, saying telecoms firms are not licensed to carry out sale of insurance policies.

    He said their involvement is not in the interest of insurance practitioners, pointing out that what happened in workmen compensation is a case in a point.

    Oyefeso gave the warning in a paper he presented at this month’s edition of the Nigerian Council of Registered Insurance Brokers’ (NCRIB) Evening in Lagos.

    He queried the right of the telecommunication companies to sell insurance policies when they are not licensed by the National Insurance Commission (NAICOM) as insurance brokers or agents. He described the development as an infringement and danger to insurance business, and cautioned insurance operators to beware of self-destruction.

    Speaking further on technology challenges and threat to broking in the industry, he said in the past, what marketers do to engage customers has changed beyond expectation.

    He said: “This is because the world is now a global village where many things are done with the push of a button. Tools and strategies that were cutting-edge a decade ago are fast becoming obsolete and new approaches and strategies are evolving.

    “Today, Information and Communications Technology (ICT) has become a viable channel in the selling of insurance policies through the use of internet, social media and short messages from the telecommunications companies. The question here is that “are the telecoms network companies licensed agent by NAICOM to sell Insurance? Are the telecommunications companies now brokers? This question is asked because life assurance products are now sold through them. This is thought provoking and we should be reminded of how Workmen Compensation was gradually taken away from us.”

    He explained that danger signs for them now lie between channel of distribution and new competitors and not the banks or direct market by insurance companies.

    NCRIB President, Ayodapo Shoderu while speaking on how to create more relevance for insurance broking in the country, said management has started taking strides by visiting notable insurance clients for the purpose of enlisting the continuous usage of brokers for their insurances.

    He said the management’s attention was drawn to an advertisement placed by Federal Airports Authority of Nigeria (FAAN), which excluded brokers from its insurances.

    “This issue was immediately taken up through a letter to the agency and we later follow up by a visitation to the procurement department. The action has paid off as the agency became more informed about who the brokers are as well as the value they could render to the value chain.

    He urged brokers to point out similar institutions to the Council for the purpose of following up on them for the benefit of all our members.

    He also advised members across the country to continually complement the efforts of the national secretariat in the enforcement of ethics and elimination of charlatans noting that whatever bad name the industry has attained today could be said to have been caused by the activities of unethical practitioners who are always set to dupe unsuspecting insurance clients, he said.

  • STI to raise capital through rights issue

    STI to raise capital through rights issue

    Sovereign Trust Insurance Plc (STI) is set to raise additional equity capital by offering one new ordinary share for every three ordinary shares of 50 kobo each.

    This according to the underwriting firm, is in fulfillment of one of the resolutions reached by its shareholders at the 18th annual general meeting (AGM) held last year, which empowered the directors to raise additional equity capital by way of special placement or public offer/rights issue or a combination of any of them.

    The Managing Director, STI, Wale Onaolapo who made this known in Lagos, said the plan to embark on another rights issue is aimed at consolidating the ownership of the firm by its existing shareholders.

    He said: “The rights issue, which is due to commence very soon will put on offer one new ordinary share for every three ordinary shares of 50 kobo each held in the company as at the close of register during the last annual general meeting.

    “Consequently, the management enjoins all shareholders of the company to take full advantage this second time around, by fully exercising their rights in the proposed rights issue as a way of consolidating and increasing their stake in the ownership of this very dynamic and forward-looking insurance company in the country.

    “The company, more than ever before, is poised to take the insurance business to a greater height as it gravitates to the next phase of its growth agenda. The management has set a growth agenda, which is aimed at positioning the underwriting firm as one of the top players in the insurance industry, particularly, in the oil and gas sector where it has developed very unique expertise and professionalism.”

    Onaolapo called on shareholders to lend total support to the rights issue once it’s placed on offer. This will help in achieving the various objectives that have been set by the organisation.

    He noted that the company is committed to creating exceptional value to all its shareholders.

    In achieving the huge tasks, he said they have identified that a very robust capital base is critical to the success of the set agenda hence the need for shareholders to grow their investments in the company.

    He said the firm is working towards being one of the most preferred insurance companies in the country for people to do business with, invest in as well as be the choice employer of labour.

  • NAICOM to introduce market conduct guideline

    NAICOM to introduce market conduct guideline

    Insurance policies are so complicated and packed with jargons that even the basics require a comprehensive explanation.

    The policies are also usually in tiny prints and many insurance operators do not take time to explain exclusions and inclusions of the products they sell to policyholders until after a claim occurs.

    This has created distrust among the insuring public and the insurers. It  has also continued to dwindle the fortunes of the Nigerian insurance industry.

    To address this lack of trust, among others, the regulatory authority, the National Insurance Commission (NAICOM), is in the process of releasing market conduct guideline to operators in the insurance industry to follow.

    The guideline aims to ensure that insurers provide policyholders with enough information to enable them make the right choices in life and household products, which will meet their desires.

    Besides, the guideline will ensure that all tiny prints are written boldly and shown to the buyer of the product.

    The guideline will also require operators to state in a policy document how claims can be made and also show the names and addresses of authorities of whom an aggrieved policyholder can report to.

    Commissioner for Insurance, Fola Daniel while speaking with journalist said the measure will begin to restore confidence of insuring public and also drive brokers’ efficiency.

    He said: “We are in the process of releasing the market conduct guideline. Before any insurance company introduces a product, we must approve it and make sure the attention of the policyholder is drawn to every little detail of the policy.

    “Also, any advert meant for publication in newspapers by insurance companies will be scrutinised and reviewed by our special unit that deals with public affairs where all these adverts are reviewed. In case they are unclear, the company will be asked to simplify any complexity within the insurance products.

    “We discover that policy holders are sometimes, being treated unfairly and this must stop to improve people’s confidence.”

    The NAICOM boss noted that before now, the general trend or saying is that insurance is very complex, but explained that the complexity and diversity of insurance products can be made simple by using languages people understand to communicate with them.

    “Before now, it used to be complex but now the wordings of policies have changed. They have improved and that is what we do at the regulatory side. We go through each of these policy documents and ensure that they are as simplified as possible.

    “Our planning and process in developing and coming out with the micro insurance and takaful guideline was to ensure that the languages, the words and all the terms and conditions that somebody will come up with are simplified.”

  • STI emerges oil & energy committee member

    Sovereign Trust Insurance Plc has been appointed into the nine-member committee to steer the affairs of the oil & energy pool in Africa.

    The appointment of the firm was announced at the 51st Management Board and 27th Annual General Assembly of African Underwriters in Oil & Energy Insurance at the just concluded African Insurance Organisation’s Conference (AIO), held in Kigali, Rwanda.

    Its Managing Director, Wale Onaolapo said with the recent development, STI alongside two other insurance companies in the country and some African insurance companies, namely, Misr Insurance Company from Egypt, Chanas Assurances S.A, Cameroun, Compagnie Centrale De Reassurance, Algeria, Zeb Re, Kenya, Tunis Re, Tunisia and Cica Re, Togo will administer the Oil and Energy Pool for the next two years.

    Onaolapo said the appointment is in recognition of the company’s expertise over the years in underwriting oil & gas risks in Nigeria and other parts of the African continent.

    He further said the underwriting firm will not relent in providing world-class insurance services in the oil and energy sector and other allied areas.

    He added that the firm considers the energy sector very crucial to the economic development of the country and will continue to exploit the market to maximise every opportunity embedded therein.

  • ‘Let’s resist foreign invasion’

    Group Managing Director, Custodian &Allied Insurance, Wole Oshin has urged local players in the insurance industry to go back to the drawing board and re-strategise on how to prevent the invasion of the industry by foreign players.

    Oshin who spoke on the sideline of the just concluded African Insurance Organisation (AIO) in Kigali, Rwanda said it is good that  foreign players have come to buy some insurance companies, warning that they should not be allowed to overrun local operators in the sector.

    He urged his counterparts to strive to build big brands such as  FirstBank, Gurantee Trust Bank, Zenith Bank and others, which he said have become too big for any foreign player swallow.

    Oshin  said the sector needs at least 10 big local champions.

    He said: “I’m very optimistic that the market will get stronger. We need to be more strategic because there are foreign players coming in. “There is no doubt that if you sit on the strategy table and ask yourself very fundamental questions, you will agree that we can’t ignore the foreign players.

    “It is for us the local players to go back to the drawing board and re-strategise. My prayer is that we should have sufficient local champions. The banking industry foresaw it coming and they positioned themselves. Now no foreign player can buy Zenith Bank, Guarantee Trust Bank, FirstBank and others because they are too big.

    “The challenge we face now is to ward off foreign incursions. It is good that they come but we must not be swept away just like that. We as the local players must begin to look inwards and re-strategise”

    Oshin is however optimistic that in the next five years, a stronger insurance market will emerge.

    He said he foresees a market that will undergo further consolidation, a market that will have a voice in Nigeria and put it in its right place.

    he said: “Custodian vision has been very clear. We have always wanted to set standards in the industry.  We always wanted to grow organically and through mergers and acquisitions. Moving forward, we can’t rule out mergers and acquisitions but we will also be looking at growing from inside outwards.

    “We intend to go into micro insurance. We recognise there are challenges with micro insurance but we are looking at the challenges as opportunities. Also,  micro insurance is a platform to give back to society. We have always operated as a corporate top-end insurance organisation but micro insurance will enable us have that interaction with the lower end of the market.

    “We don’t expect to make profit from it immediately because we don’t think it is an immediate profit making venture. But we are willing to deploy capital so that insurance can penetrate further to the grassroots and Nigerians can know the value of insurance in economic stability.”

    He said regulation is a global issue and it is a natural cause for development.

    “It is for all of us in the sector to increase and step up our structure to be able to handle it. Regulation is for good at the end of the day but  good things do not come easy,” he said.

    He said though the enforcement of regulation by the National Insurance Commission (NAICOM) may look tough, it is good for the development of the sector.

     

  • African regulators seek uniform guidelines on e-insurance

    The 41st General Assembly and Conference of African Insurance Organisation (AIO) has issued a nine-points communiqué tasking African insurance regulators to formulate and articulate appropriate regulatory framework.

    The framework will set out modalities and guidelines for the operation of e-insurance on the continent.

    This, according to the insurers, is in realisation of the far reaching implications of adopting e-insurance and the need to ensure its proper implementation across the continent.

    The conference was held in Kigali, Rwanda and was attended by 670 top key regulators and executives of insurance companies across the continent.The communiqué was signed by AIO Secretary General, Ms Prisca Soares.

    The communique also stated that the conference agreed that food security is Africa’s most daunting challenge and that increasing farmers productivity is key to combat the challenge.

    “It is therefore imperative for African insurance industry  to adopt the use of technology in crop insurance using satellite images with a view to reducing the processes in claims management and settlement.

    “The conference however identifies the need for collaborative efforts in addressing Africa’s food security challenge and the industry must therefore ensure that we partner agencies such as local banks, microfinance institutions, agricultural processors and buyers, government institutions and non-governmental organistions, working together and harmonising our efforts with the view to providing the most needed finance to support agricultural development in Africa.

    It added that  “In order to harness the huge potential of its largely untapped informal economic sector and to draw from the success of pivotal efforts of M-PESA in mobile money operation, the conference agreed that the African insurance industry should leverage on technology, especially telecommunications and mobile telephony in promoting financial inclusions among the rural populace. This will make its products and services accessible and affordable for the people in rural areas which will go a long way in breaking the cycle of poverty plaguing the continent.”

    The communique noted that  “in appreciation of the importance and potentials of technology in reaching out to much larger number, the conference recognises the need for the African insurance industry to embrace technology to drive its product development and deepen insurance penetration through deliberate collaborative effort with partner organisations.

    “Appreciating the huge potentials of Information Technology in insurance marketing and in particular the adoption of e-insurance in the insurance value chain, the conference underscores the need for effective regulatory coordination between the various stakeholders which include telecommunication regulators, banking regulators and the industry regulators,” it read.

  • Children Day: AIICO hosts school on risk management

    In celebration of this year’s Children Day and AIICO Insurance Plc has in line with their Corporate Social Responsibility (CSR) of empowering the Nigerian child, celebrated this year’s Children Day by training students of Helpers International School on risk management including insurance.

    Executive Director, Mr Jide Orimolade, received the students and their teachers who visited the head office of the company in Lagos, as part of their field work research on Risk Management.

    Orimolade said professional risk managers and himself gave the students tutorials on interesting areas of risk management including Insurance, health and safety living amongst other topics.

    He said the students were also taken through a question and answer session as well as refreshments after the training.

    AIICO Insurance is one of the largest Life Insurer commenced operations in 1963, and became a public liability company in 1989. In 1990, the company got listed on the Nigerian Stock Exchange  (NSE).

  • NAICOM braces for growth

    NAICOM braces for growth

    The National Insurance Commission (NAICOM) is raising insurance awareness.

    The initiative, which includes creating financial literacy, benefits of insurance, claims processes and rights of the policyholder, is targeted at achieving massive growth in the insurance sector.

    The Commission at an interactive session with Insurance Correspondents held in Uyo, Akwa Ibom State, said it intends to consolidate on its initiatives and adequately harness the great potentials of the Nigerian insurance sector for massive growth.

    The Commissioner for Insurance, Fola Daniel, said the population of the country, if adequately harnessed, could give added advantage to the insurance industry and further develop the market.

    He said the initiatives  assure of an evolving insurance model, a better industry, a growing market and a brighter future.

    Highlighting some of the initiatives, Daniel said the Market Development and Restructuring Initiative (MDRI) incepted in 2009, among others, was meant to enforce compulsory insurances and eradicate fake insurance policies in the country.

    He said this initiatives have been vigorously pursued by the Commission across the six geo-political zones of the country.

    He said: “I am glad that even though the N1 trillion target expected through the MDRI is yet to be attained, considerable progress has been made given available statistics.

    “Going forward, the Commission would consolidate on the gains made so far and ensure proper implementation of these compulsory insurance products to be able to enhance the industry’s contribution to GDP.

    “An emerging fact under this class of insurance is the interest currently being shown by various governments. A group of underwriters have come together to enforce the Motor Vehicle Third Party Liability Insurance in Imo State in collaboration with the State Government and the scheme is working very well. Another group of 19 underwriters are enforcing the Occupiers Liability Insurance in Enugu State in collaboration with the State Government and the Commission is working to get more states to embrace these models.

    “They recognised the need to develop the retail insurance market which has remained grossly untapped considering the vast population of the country.”

    The NAICOM boss noted that the Commission had recently launched the Delta State Micro Insurance Scheme at a ceremony in Asaba, the State Capital. Efforts are being made to replicate this model in other states.

    He emphasised that as a regulatory body, their primary responsibility is to protect policyholders and safeguard investments adding that they have tried to ensure this in the provision of adequate regulations and effective supervision of the industry over the years.

    He said: “Suffice it to say that the industry has witnessed considerable metamorphosis in recent times owing to the new reforms embarked upon by the Commission. Some of these reforms include but not limited to the introduction of Risk Based Supervision, migration to International Financial Reporting Standard (IFRS) from the Nigerian Generally Accepted Accounting Principles (NGAAP); Market Conduct Reforms, Claims Settlement Reforms, Financial Inclusion and combating financial crime, among others, all geared towards developing the industry and improving the general perception about insurance.

    “The successes achieved so far in this drive by the Commission may not have been possible without the unflinching support of the industry operators. Where necessary, the Commission has not failed to open lines of discussion with the operators, especially through the NIA, NCRIB, ILAN and ARIAN on issues affecting them before arriving at decisions.

    “We are aware that insurance is a business of selling promises. But when these promises made to policyholders and investors are not kept, it then becomes NAICOM’s business to intervene and ensure these promises are kept.

    “In doing this, there is always going to be tension, apprehension, disagreements, among others, between the regulator and the stakeholders. This is healthy if only to engender transparency, good corporate governance, better management and appreciation of the laws governing the business. Notwithstanding the resistance from these entities, the Commission remains committed to providing leadership to ensure sanity, good ethical practices, development and growth in the industry.

    He called on the media to support the Commission in this drive.

    Assistant Director, Inspectorate, NAICOM, Sam Onyeka, while presenting a paper with the theme, “Regulation and Insurance Market Growth: The role of the media, said Nigeria must continue to focus on institutional factors to grow the insurance market.

    According to him, insurance market growth is mainly driven by economic factors in developed countries, whereas it is largely driven by institutional factors in emerging countries.

    He explained that with economic development, the contribution of institutional factors to the insurance growth would gradually decrease and be partially replaced by that of economic factors.

    He said: “Given the net positive effect of institutional factors on the insurance industry where GDP is low, it is crucial for the emerging economies to adjust their strategy in order to achieve market growth.

    “Regulatory strategies that can stimulate market growth are compulsory insurances to address underdeveloped demand, market conduct regulation to keep product simple and build trust through distribution channels and solvency regulation to improve insurer stability and increase capacity through risk-based capital requirements.

    “Others include public risk mitigation that can make risk insurable and or cover available, premium subsidy that can help make cover available and increase demand while maintaining fundamental principle of risk-based premium and public private partnership to enhance market penetration.”

    He said the Commission intends to adopt public risk mitigation, state insurance and public private partnership.

    Deputy Director, Corporate Strategy, NAICOM, Babajide Oniwinde, speaking on Financial Literacy & Insurance Education: Issues & challenges, said financial literacy and insurance education need urgent attention because of some industry issues.

    He said this is because insurance products are generally technical while market distribution system can be complex.

    Oniwinde said full market development can be realised by awareness creation, which brings about inclusive growth.

    There is need for ongoing coordinated action and collaboration among all key stakeholders, he added.

     

  • ‘Protect your fine artwork with insurance’

    Rumour has it that casino mogul Steve Wynn once made a $50 million insurance claim on a painting that was damaged when he bumped it with his elbow and tore the canvas.

    According to Insur.com, most homeowners don’t own such pricey paintings but many do prize at least one valuable piece of artwork. For those who do, understanding how to protect their fine art can be a challenge. Purchasing adequate insurance coverage is a good place to start.

    Anything that damages a home can also damage the art inside. According to Jay M. Levin, an attorney at Reed Smith in Philadelphia, when Hurricane Sandy devastated lower Manhattan in 2012, it also led to the destruction of millions of dollars of artwork owned by individuals and businesses. Luckily, many of those pieces were covered by adequate insurance policies.

    Insurance claims for artwork”The most important thing homeowners can do is to tell their broker what they have, to make sure that it’s listed on a policy and to get a proper appraisal so that it’s insured for the right amount,” says Levin. “Then if disaster strikes, such as Superstorm Sandy or Hurricane Katrina, all is not lost.”

    What constitutes ‘art’?

    Insurable fine art can include two-dimensional works such as paintings, drawings, textiles and other framed pieces, and three-dimensional pieces such as sculptures, valuable porcelains, fine antique and contemporary furniture, according to Gordon A. Lewis, Jr., senior director and vice president at The Fine Arts Conservancy in West Palm Beach, Fla. These objects usually have some coverage under general household contents policies, but for high-end pieces, homeowners should purchase separate policies called “scheduled policies.”

    “Your overall homeowner contents policy covers the art as part of the contents. Then there are specific scheduled policies for works of art and these are generally appended to the underlying homeowner policy,” says Lewis.

    Ron Reitz, president of Quality Claims Management Corp. in San Diego, says that scheduling artwork also helps to confirm the value of the pieces by putting those values in writing in advance of any disasters.

     

     

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    “The insured supplies a detailed list of the art and the value he or she wants it insured for. If there is a loss to the art, then the homeowner receives the amount they are insured for — or the amount it is ‘scheduled’ for. These policies are actually less expensive than homeowner contents policies and importantly, they do address the question of value if a loss does occur,” says Reitz.

    Insurance claims and restoration

    As a public insurance adjuster, Matthew Blumkin, a partner and executive general adjuster at the Greenspan Co./Adjusters International in Encino, Calif., has seen numerous home insurance claims on the West Coast relating to fine arts.

    “A lot of times, fire damage is the cause for art claims whether it’s a statue or a sculpture or a painting, but water damage such as flooding can also cause humidity and other contaminants to impact the artwork,” says Blumkin.

    After a disaster, insurance companies will work with you to determine if the artwork can be repaired. If so, Levin notes that finding a qualified conservation professional is crucial.

    “The care with which restoration effort has to be made is really important. You should not just go to the yellow pages and look for an art restorer. You need someone who is really, really skilled and experienced and also respected, so that when it’s done — a painting, for example—it will still be worth as much as possible,” says Levin.

    The American Institute for Conservation of Art offers an online directory of conservators that can be helpful in finding a qualified art conservation professional. Local art museums may also be willing to provide referrals.

    If your insurance company (after conferring with a conservator) determines that the piece cannot be repaired, then you’ll be compensated according to the value established in your policy.

    This is what makes a current appraisal of the piece so important. Lewis and Levin recommend that you have your artwork professionally appraised every three years in order to ensure that you’re purchasing an adequate insurance policy. It is also important to know that a standard home insurance policy will pay for restoration but not for loss in value; a scheduled policy will pay for both.

    Lewis says that the art market is moving very quickly, so the art you bought a few years ago could be worth much more today. “In order to keep insurance up to date and be certain that they receive a fair and just compensation, consumers really need to have their appraisals updated frequently,” says Lewis. “A little advanced planning can help you prevent a big financial loss down the road.”

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