The Nation Newspaper

Category: Insurance

  • ‘Inconsistent policies, regulation threat to industry’

    The Chartered Insurance Institute of Nigeria (CIIN) has identified inconsistent policy and regulatory frameworks as factors inhibiting the growth of insurance business in the country.

    Its President, Fatai Lawal, who spoke at the weekend in Ibadan, said operators were also under pressure from business owners to deliver huge returns on investment, adding that the development posed daunting challenge to insurance manager who must not cut corners or compromise his professional calling.

    Lawal, who is also the Managing Director of Sterling Assurance Nigeria Limited spoke on The insurance industry in motion: emerging issues for the professionals at the Professionals’ Forum.

    He said the theme was apt and reminded practitioners of the dynamics of the business environment.

    According to him, it also brings into focus, the predicament of the average Manager in maintaining a stable operation to the satisfaction of investors and other stakeholders.

    He said: “These scenarios justify the annual professionals’ forum as a robust platform for practitioners’ collective review of the workings of the insurance sub-sector of the national economy in order to strengthen the profession, the practice and the Industry.

    “It remains the only way to guarantee that professionals can think and act as one in unveiling the hidden opportunities for the industry despite the business landscape that has remained volatile.”

    The CIIN chief further said that the institute has inaugurated a committee of writers with a deadline to produce an insurance course book for the teaching of insurance in secondary schools. This is in a bid to actualise the approval of insurance by the Federal Ministry of Education as a course of study for Senior Secondary Schools in Nigeria.

    He noted that part of his objectives include providing support for accredited tertiary institutions offering insurance to enhance their capacity to offer quality education and reinforcing activities at the College of Insurance and Financial Management where the second phase of construction work is in progress.

    On the Insurance Industry Consultative Committee (IICC) inaugurated last month by the Commissioner for Insurance, Lawal said the IICC is to serve as a springboard for harnessing industry views and providing a unified voice for interactions with government and other stakeholders.

    It will also serve as a veritable tool for conflict resolution within the industry, he said.

    He said the inauguration of the IICC has guaranteed the fact that the institute will be acting in concert with the rest of the industry in breaking down the barriers militating against insurance and financial literacy.

  • Fed Govt owes N24b premium

    The Federal Government is owing insurance firms N24 billion premium while it has paid N669 billion to banks as interest in one year, the Managing Director Cornerstone Insurance Plc Mr Ganiyu Musa said.

    Speaking at the Members’ Evening of the Nigerian Council of Registered Insurance Brokers (NCRIB) in Lagos, Musa added that only N300 billion was generated by the industry since its recapitalisation in 2007, describing the figure as poor.

    More appalling, he said, was that assets of banks are worth N22.5 trillion while that of insurers is about N0.621 trillion.

    Citing insurance companies’ performance with banks, Musa said while insurance companies are richer than banks in developed countries, it is not so in the country.

    He urged his colleagues to do things differently for the public to take seriously.

    He said: “Although we have been competing fiercely and robustly, there is the need for us to do more.

    “The need for the industry to achieve a better premium income as against the N300billion generated is crucial to the growth of the industry.

    NCRIB President, Laide Osijo said the professional body has attained a height where it has become an envy among professional institutions in the country and beyond.

    She said: “Through the entrenchment of sound ethical practice and professional conduct, insurance brokers now have a conspicuous place in the comity of respected professionals.

    “It is a thing of delight that the respect and amity that now exists between the NCRIB and the National Insurance Commission (NAICOM) and other professional bodies is unprecedented.”

     

  • NAICOM promises to release report on Goldlink soon

    The National Insurance Commission (NAICOM) has pledged to act soon on the recommendations of the report of the interim management it set up to probe sacked directors of Goldlink Insurance Plc, The Nation learnt.

    They were booted out for alleged anomalies and misstatements in the company’s accounts for the year ended December 31, 2011.

    Spokesman, Rasaaq Salami, confirmed NAICOM’s receiving of the report, adding that it was received about three weeks ago.

    He said the interim management has reviewed the audit by KPMG, and made recommendations, adding that the Commission is working on these recommendations.

    Salami regreted that NAICOM’s intervention came a little late. The former board alleged to be involved in mismanagement and other irregularities had Mr Gbenga Afolayan as Chairman, and Mr Femi Okuniyi as Managing Director.

    The interim board has Mr James Ayo as Chairman; Mr Gbolahan Olutayo, as Managing Director and Mr Adeyinka Olutungasem, Chief Finance Officer.

    Other members include Ambassador Umar Damagun, Alhaji Sahe Dabana, Prof. Chioma Kanu Agomo and Mallam Abubakar Sadiq Mijinyawa.

    But the interim management constituted to audit the financial reports and corporate governance failures, is still in office three weeks after the submission of their findings, despite shareholders’ grouse over the huge funds being spent on them.

    However, Salami said the interim management team was being retained to avoid a gap.

    Meanwhile, sources in the industry who asked not to be identified, said they were worried over the delay by NAICOM to unveil the findings of the KPMG report.

    One of the sources pointed out that there should be no more excuses from the regulator since the recommendation has been submitted to them.

    Another source urged NAICOM to release the findings soon.

    NAICOM had in furtherance of its oversight functions taken over the management of Goldlink Insurance Plc and constituted a seven-man interim board to oversee the affairs of the company for six months with effect from October last year.

    According to the commission, the interim board followed the resignation of members of the directors of the company. Their resignation became apparent after the commission uncovered anomalies and misstatements in the audited financial statements of the company for the year ended December 31, 2011.

    The board was charged with probing the financial reports and corporate governance failures observed in the company’s financial statement for 2011.

  • Expand market for growth, expert urges

    Expand market for growth, expert urges

    There is need for operators in the industry to concentrate more on market expansion instead of premium growth, the Managing Director, Riskguard-Africa Nigeria Limited, Mr. Yemi Soladoye, has said.

    In an interview, he said the concentration on premium growth is inimical to growth, adding that the future of the industry can only come from market expansion.

    He said: “Operators often focus on how to raise their yearly premium, abandoning the need to create expansion through good services and people-tailored products.

    “All the operators want is to ensure that their premium for this year is higher than what it was last year, and they are ready to spend anything to achieve that. If their market position last year was number six and they move to number five this year, their board would applaud their effort, not minding the cost.

    “The companies’ cost of doing business is indeed very high; the claims ratio is quite low. These are pointers to the fact that insurance companies need something new and better.

    “The issue of unhealthy competition will be getting worse, until they look for better, cost-effective and non-volatile distribution channel. This can be achieved by bankassurance, which is having collaboration with banks’ retail channel. It also means engaging in strategic alliances with organisations, such as Shoprite, Megaplaza and others.”

    He urged operators to initiate collaboration with cooperative societies and other relevant bodies to deepen insurance penetration.

  • Reinsurer cuts gold holding amid bear market

    Reinsurer cuts gold holding amid bear market

    Greenlight Capital Re Limited (GLRE), the reinsurer that counts hedge-fund manager David Einhorn as its chairman, cut an investment in gold in the three months ended June 30 as prices fell into a bear market.

    The reinsurer according to Bloomberg, had about $50.5 million of commodities at the end of the second quarter, compared with $90.3 million on March 31, according to a regulatory filing yesterday. The cost basis for the investments fell to $41.8 million from $59.9 million in the period, the Cayman Islands-based company said.

    The “decrease in commodities was due to a decline in the price of gold combined with the disposal of a portion of our physical gold holdings,” according to the filing.

    Gold futures dropped 23 per cent last quarter, the most since Bloomberg data begins in 1975, and reached $1,179.40 an ounce on June 28, the lowest since August 2010. The metal remains in a bear market reached in April after some investors lost faith in bullion as a store of value and amid speculation that the Federal Reserve will curb its stimulus program. Goldman Sachs Group Inc. forecast July 22 that prices are likely to decline further.

    About 90 per cent of Greenlight Capital Re’s $1.01 billion of investments backing policyholder liabilities was in stocks at the end of June, according to the filing. Einhorn, 44, who oversees the portfolio, has said the bet on gold was a hedge against currency devaluation as central banks around the world have worked to stimulate the economy by buying bonds and keeping interest rates low.

    The stock market’s “rapid advance is creating a potentially unstable condition which could resolve a number of ways and is difficult to predict,” the reinsurer said. The company plans “to continue holding a combination of a significant position in gold, macro positions in the form of options on higher interest rates and foreign exchange rates, short positions in sovereign debt and sovereign credit default swaps.”

    Brian Ruby, a spokesman with ICR Inc., who represents Greenlight Capital, had no immediate comment on when the reinsurer sold its holdings.

  • IMF, NIA partner on growth

    The International Monetary Fund (IMF) and the Nigerian Insurers Association (NIA) are exploring how to harness the potentials of the industry to boost the economic growth of the country.

    The Director-General of NIA, Sunday Thomas, who made this known in Lagos, said the representatives of the association’s Governing Board led by Prof Joe Irukwu, has met with the representative of the IMF, Dr Rodoyo Wenrhan, to discuss how operators of the industry can maximise value from the enormous insurance potentials in the country.

    Thomas said the parties hope to work out on how to sustain stability on insurance contributions to the economy.

    He said: “The representatives of our Governing Council led by Professor Joe Irukwu, has met with the representative of the IMF, Dr Rodoyo Wenrhan, to explore the potentials of the insurance industry as an economic growth driver in Nigeria.

    “Among the objectives of the mission was to ensure stability is sustained within the system. The representative of the IMF stated that the outcome of the meeting is expected to be published with recommendations made on how to move the insurance industry forward.”

    Th industry is also said to have within the last three years, recorded growth of one million subscribers.

    Commissioner for Insurance Fola Daniel, who made this known, said the number of insured in Nigeria was 500,000 about three years ago, but at present stands at about 1.5 million, out of a population of over 165 million.

    Daniel noted that the Gross Premium Income (GPI) has also increased from N157 million in 2010 to N250 million in 2012, adding that as a result of that, increase in the ratio of premium to Gross Domestic Product (GDP) moved from below 0.5 per cent to nearly one per cent.

    He said increase in local capacity has moved from less than 10 per cent to 48 per cent, adding that the commencement of implementation of Section 50 of the insurance Act 2003 has improved financial assets of operators.

     

  • Group opens Cross River chapter

    The Association of Registered Insurance Agents of Nigeria (ARIAN) has established a new chapter in Cross River State.

    The move, which was okayed by ARIAN Board, was in recognition of the need to deepen insurance penetration in Nigeria.

    It is also in line with the National Insurance Commission (NAICOM) development platform, the Market Development and Restructuring Initiative (MDRI).

    Before the chapter was established, ARIAN has established chapters in Ibadan, Abuja, Enugu, Port Harcourt, Akwa Ibom and Lagos. Cross River State’s chapter was approved for establishment, among others, owing to their strategic economic importance and relevance to the growth and development of insurance.

    The new executives of the chapter include Elder Bassey Orok, chairman; Elder Medie Uudom, vice chairman, Elder Akwa Etukudo, secretary; Elder Mike Ukpong, assistant secretary; Prince Remmy Awana, treasurer, Elder Ikpeme Samuel, provost; Elder Samuel Effiong, financial secretary; Madam Theresa Okon, welfare and Imo John Akpan, PRO.

    The National President of the association, Mr Kingsley Obuvie, who was represented by Mr Innocent Williams, said he was determined to expand the insurance agency networks, hence this initiative to do a nationwide sensitisation informing all insurance companies practicing agency business.

    He highlighted the requirements needed to become licensed NAICOM insurance agents. These include N1,000 NAICOM registration fee, N2,000 for ARIAN certificate, CIIN proficiency certificate, tax clearance, letter of authority from employers.

    The association is also planning its yearly conference and AGM scheduled for next November.

  • Risk managers advocate reform of legal system

    Risk managers advocate reform of legal system

    In recognition of the challenging security situation and the serious implications for the socio-economic and political development of Nigeria, the Risk and Insurance Managers Society of Nigeria (RIMSON) has reiterated the need for the implementation of its communiqué.

    RIMSON President, Mrs. Henry Akwara, disclosed this at the end of their meeting in Lagos.

    According to her, the communiqué seeks a law reform as the penalties for certain crimes are too low to prevent further occurrence.

    They also said there was the need for the government to support insurers to form pools and alliances on terrorism insurance to be able to underwrite the risk as it is the case in United States, United Kingdom and France.

    Besides, Akwara said there was need for synergy between Risk Managers, stakeholders and security agencies, where information is exchanged and worked upon to minimise security risks.

    She stated that rates of premium chargeable should be commensurate with the nature of the risks to be covered and there should be leverage on international brokers for cover at Lloyds on per risk basis (for large risk) while the local insurers’ retentions should be minimal regardless of the sum insured.

    She noted that response time in emergency situations is at present poor hence it should be improved upon.

    Also, “Security agencies should be insulated from undue political interference while government should sustain professionalisation of security services through improved training, strategic and tactical focus, intelligence gathering, increased numerical strength of security personnel, provision of additional logistics and requisite weaponry.

    “The risk managers also want clear policy guidelines on treatment of security risks like clarity of purpose and objectives,” she said.

    “Akwara further said that the communiqué urged the governments to exercise strong political will and commitment to tackle security challenges to logical conclusion, noting that the management of security challenges requires improved data base and effective utilisation.

    She said: “Thee government should concretise and domicile conventions and commitments entered into both at the UN, and AU levels including the evolution of political will to deal with terrorism.

    “We should be pro- active instead of being reactive. Appropriate counter terrorism actions should be taken promptly on intelligence reports. There should be massive campaigns and encouragement of the citizenry to expose criminals. Security agencies and the judiciary should evolve efficient means of proactively discharging their functions to curb criminal and terrorist activities.

    “The government should establish national counter terrorism framework and architecture upon which international support can lean and work with and engage the services of well trained counter terrorism operatives.

    “They should re-activate the disaster management trainees and establish rallying points for managers who should fit into counter terrorism infrastructure, reinforce the protection of national infrastructure against terrorist attacks.”

  • NAICOM seeks legislation to end building collapse

    NAICOM seeks legislation to end building collapse

    •Erring landlords risk jail 

    The National Insurance Commission (NAICOM) has called on state governments to enact a legislation to ensure buildings used by third parties within their states are adequately insured.

    NAICOM Commissioner for Insurance, Mr Fola Daniel, disclosed this in a statement made available to The Nation. He, however, sympathised with victims and family members of those who lost their lives in collapsed buildings.

    He advised members of the public to comply with the Insurance Act 2003, which made it compulsory for buildings used by third parties to be insured against the risks of collapse, fire, earthquakes, storm or flood.

    He reminded the public that non-compliance with this provision of the law attracts a penalty of N100,000 or one year imprisonment or both.

    According to him, this has become necessary in other to give relief to victims of collapsed buildings whenever they occur.

    He noted that in Lagos alone, it was reported that well over 20 lives had been lost to building collapse in the last six months.

    Daniel said, “NAICOM deeply sympathises with victims and family members of those that lost their lives in the recent collapsed buildings in Lagos and Kaduna States. In Lagos alone, it is reported that well over 20 lives have been lost to building collapse in the last six months.

    “Most painful is the fact that majority of those injured have to bear the treatment costs themselves while the families of those that lost their bread winners have no form of compensation, except maybe, the little that the state government could provide from the scarce resources of the state. The Commission is sad with this avoidable burden on government and victims if only these buildings are adequately insured.

    “The Federal Government, through the Insurance Act 2003, made it compulsory for all buildings used by third parties to be insured against the risks of collapse, fire, earthquakes, storm or flood such that in the event of any of these risks crystalising, adequate compensation would be paid to both victims and families of those who may lose their lives.

    “Members of the public are hereby reminded that non-compliance with this provision of the law attracts a penalty of N100,000 or one year imprisonment or both.”

    He said the Commission equally seizes this opportunity to urge all state governments to push or the enactment of a law to ensure that buildings used by third parties in their states are insured to give relief to victims of collapsed buildings.

    “Let us all give hope to victims and family members of those who lose their bread winners in collapsed building incidences across the country,” he added.

    Insurance of public buildings is one of the major components of compulsory insurance in Nigeria in 2007. They were introduced by NAICOM through its Market Development Initiative programme and made compulsory by the Insurance Act 2003 and other sister legislations.

    Several collapsed buildings in the country have left scores of people injured or dead without any compensation because they were not covered by an insurance policy.

    Recently, tragedy struck in Lagos as a three-storey building collapsed in Ebute Meta, killing seven people and injuring many others.

    Also, in Kaduna State, another three-storey building collapsed in the Kaduna metropolis with many people reported trapped.

     

     

     

     

  • NHIS ready for 2015

    TO achieve the mandate of universal health coverage by 2015, the National Health Insurance Scheme (NHIS) has rolled out programmes to address the various segments of the society.

    This was made known by the Deputy General Manager (DGM)/Head, Media and Public Relations Division of the scheme, Mrs. Hannatu Ardo, during the Kaduna International Trade Fair.

    The DGM, who was represented the Executive Secretary of the NHIS during the fair, said the organisation had designed programmes that will be convenient for the various segment of the society.

    According to her, programmes such as the Voluntary Contributor’s Social Health Insurance (VCSHI), the Community Based Social Health Insurance (CBSHI), Tertiary institution Social Health Insurance (TISHIP), the Formal Sector Social Health Insurance (FSSHI), among others, are designed to address the financial and social inequality in the country.

    She called on Nigerians to avail themselves of any of these products that has been specially crafted to meet their health needs.

    Mr Eliagu Okongu, an enrolee of the scheme, asked the NHIS to intensify its effort in monitoring health care providers as some of them are ripping off enrollees under the pretext that some of the ailments they complain about are not covered by the Scheme.

    The launch of NHIS in 2005, it was mandated that, 10 years later, every Nigerian should have health insurance as a positive development in health insurance. The target coincides with the Uation Nations (UN) Millennium Development Goals (MDGs) target to reduce poverty by half.