The Nation Newspaper

Category: Insurance

  • First Bank to float insurance firm

    First Bank of Nigeria Plc has concluded plans to float a general business arm. The bank will by next month announce its position on the new underwriting firm.

    Earlier, it had established life insurance business with Sanlam Emerging Markets of South Africa.

    A source said the group has been putting together necessary requirements for the smooth take-off of the firm.

    He said: “We are still working on it, before the end of next month, we will make a formal announcement. At the moment, we can’t say much for we are bound by some level of confidentiality. When we get to that stage, we will make a formal announcement.”

    FBN Life, a joint venture between FirstBank of Nigeria Plc and Sanlam Emerging Markets of South Africa, which was licensed to transact life insurance business in Nigeria, started operations on September 1, 2010.

    In the joint venture, FirstBank of Nigeria Plc owns 65 per cent of FBN Life, while Sanlam owns 35 per cent.

    Managing Director, FirstBank of Nigeria Life Assurance Limited, Val Ojumah, said by the middle of this year, the bank would have acquired a non-life licence either by buying a non-life company or by getting a fresh licence. We are approaching the issue with both hands.”

  • PenCom okays 317 firms for govt’s contracts

    The National Pension Commission (PenCom) has okayed 317 private sector organisations. By this certification, the companies can bid for contracts with Federal Government Ministries, Depart-ments and Agencies (MDAs).

    This is by virtue of the certificate of compliance issued to these organisations by PenCom after having provided evidence of complying with provisions of the Pension Reform Act (2004).

    Compliance with the Pension Act, at minimum, include ensuring that all employees open Retirement Savings Accounts (RSAs) with Pension Fund Administrators of their choice; remitting both employer and employee pension contributions to the appropriate Pension Fund Custodian not later than seven days from the date of payment of salaries and transferring pension funds and assets prior to the commencement of the Pension Act to licensed pension operators.

    The Compliance Certificate replaces the erstwhile Letters of Compliance that were issued to organisations bidding or soliciting for contracts with Federal Government MDAs.

    PenCom had earlier brought it to the attention of all organisations and the public that any supplier, contractor or consultant bidding or soliciting contract or business from any MDA must fulfil all its obligations on pensions.

    PenCom has been updating the list of organisations that have been issued compliance certificates.

    The names of the affected companies are pasted on the commission’s website with PenCom noting that it has to be publicised to serve as a guide to Federal Government MDAs and for information of the public.

     

  • Brokers to pay N2.5m for revoked licence

    NATIONAL Insurance Commission (NAICOM) has warned that any broker that loses its licence as a result of infraction would be asked to pay a penalty of N2.5 million.

    The Commissioner for Insurance, Fola Daniel, made this known at the council meeting of the Nigerian Council of Registered Insurance Brokers (NCRIB) in Lagos.

    He urged brokers to avoid anything that would make NAICOM revoke their licences, adding that any broker who subverts the industry’s rules and has his licence revoked, would pay the new processing fee of N2.5 million.

    Meanwhile, the President, NCRIB, Mrs Laide Osijo, has appealed to brokers to cooperate with NAICOM in the implementation of the new premium regime, stressing that they should avoid any infraction that might lead to sanctions.

    She stressed that the council had gathered from members and underwriters that the public and government were already adjusting to the new premium rule. She called on insurance operators to embark on enlightenment of client on the new rule.

    She said: “Reports reaching us from the underwriters and brokers indicate an adjustment to the new rule by insurance clients, including the government.

    “From my findings, it has become necessary to advise brokers to cooperate with NAICOM in the implementation of this rule as well as avoid any infraction that may lead to sanctions by the commission.”

    Osijo said the ‘no premium no cover’ is the best thing that can happen to the insurance industry. She said: “The money in our hands is better than expectations; it beats our imaginations. So many brokers have testified to the workability of the policy. You can’t believe the amount of premium we have received in my office this year so far as a result of the policy because we refused to give them cover on credit.”

    She insisted that the law is there and has come to stay for the good of the national economy, the insured as well as the operators in the insurance industry in the country. She said: “It is a fantastic thing happening to the insurance industry and it is going to benefit everybody, whether you are an underwriter or a broker, even the public, because if you pay your premium on time, nobody will tell you stories the moment your claim falls due.”

  • Group blames industry woes on fake agents

    The Association of Registered Insurance Agents of Nigeria (ARIAN) has ascribed the continual downfall and low level of insurance culture in Nigeria to the presence of unregistered agents employed by insurance companies.

    The Group’s National President, Kingsley Obuvie, during a media chat in Lagos, said insurance operators are yet to see how agency can help the industry develop and grow to the level of international standards.

    He stated that though there are about 34,000 insurance agents in the country, only about 5,000 are licensed. He explained: “The enormous problem facing insurance in Nigeria is mainly because of the unregistered agents in the market. We have many agents who are not trained, but operating in the market selling insurance. If the public can ask for a broker’s licence before any deal is struck, then the public should always ask for an agent’s licence before they do any business with them.

    “We have approached National Insurance Commission (NAICOM) on this and it will be in the best interest of the industry if NAICOM can include it in the rule that before any individual or company deal with any person, not minding which company is involved, he or she should ask for the agent’s licence before any transaction.The truth of the matter is that the challenges we are having in the industry today is because of these unregistered agents,” he said.

    The ARIAN chief mentioned that insurance outfits in Nigeria are doing well but they lack manpower, adding that the industry itself has realised that agency is needed to help boost insurance success.

    He further said Nigerians are yet to see agency as a career business and a lot of people don’t want to come into it because it is strictly on commission basis. “Agents are only living on commission earned from the field and some of the products available are not customer friendly.

    “Looking at the economy, an average Nigerian does not see insurance as a priority, if not that motor insurance is made compulsory, there wouldn’t have been anyone buying insurance in the country,” he stated.

    “Though some companies have actually seen agency as a way to grow their business, they have embraced it and given it some level of support. But insurance companies in the country are yet to see the core value of licensed insurance agents,” the ARIAN he said.

    Obuvie lamented that the industry itself has not given agency the recognition it deserves, yet “brokers are everywhere because the industry has really given them the support which makes it easier for them to gain more ground,” he said.

    He, therefore, called on the industry to embrace the agency and give it necessary support to reach out to every Nigerian.

     

     

  • Nigeria has 112m potential microinsurance customers

    Regulator of the risk-bearing industry, the National Insurance Commission (NAICOM), has said that there are at least 112 million potential microinsurance customers in Nigeria, adding that it has begun the process of fine-tuning a policy framework for micro-insurance services designed to cater for the low income earners and vulnerable poor of the rural areas.

    Commissioner for Insurance and CEO of NAICOM, Fola Daniel, said micro-insurance was specifically designed for the protection of low-income earners against specific perils in exchange for regular premium payments proportionate to the likelihood and cost of the risk involved.

    Giving further perspective on the evolvement of micro-insurance, he said the Commission in its continuing drive to deepen the Nigerian insurance market, collaborated with a German Firm, GIZ/MFW4A and some other agencies, to conduct a nation-wide diagnostic study on the potentials of micro-insurance in Nigeria.

    “One of our goals was to generate at the end of the exercise, a document that will enable us take evidence based decision on the issue of micro-insurance in Nigeria and also serve as public resource in its own right.”

    The General Manager, Business Development, Union Assurance, Mr Okanlawon Adelagun, said micro-insurance is aimed at getting the people who cannot afford to take insurance at the commercial level get insurance cover. He said it is like providing the covers without any paraphernalia. “It is an insurance scheme with its own peculiarities that deals with people who live slightly above poverty level.”

    Adelagun said while compulsory insurance is aimed at providing cover for a third party that may suffer loss or injury as a result of one’s activity, microinsurance on the other hand is a cover targeted at the peson and not the third party, he explained.

    “Micro insurance is recognised as a useful tool in economic development. As many low-income people do not have access to adequate risk-management tools, they are vulnerable to fall back into poverty in times of hardship, for example when the breadwinner of the family dies, or when high hospital bills force families to take out loans with high interest rates. Furthermore, micro insurance makes it possible for people to take more risks,” he said.

    According to him, when farmers are insured against a bad harvest (resulting from drought), they will be in a better position to grow crops which give high yields in good years, and bad yields in year of drought, adding that without such cover, they will be inclined to do the opposite. “Since they have to safeguard a minimal level of income for themselves and their families, crops will be grown which are more drought resistant, but which have a much lower yield in good weather conditions,” he added.

    On the current drive in most parts of the world towards microinsur-ance, Adelagun said it was as a result of the increasing level of poverty worldwide and the need by world leaders to do something to assuage the sufferings of the poor. ”International organisations like the International Labour Organi-sation (ILO),UNESCO and others, felt that majority of the people in the world live below poverty level and they are unbanked, uninsured and un-catered for by the commercial insurance. He said the need for the world leaders to address these issues brought about the current drive to microinsurance. It is more or less a social business that caters not so much for profit but towards the well being of the masses, he added.

  • CIIN takes insurance to schools

    Determined to continue with its efforts to encourage and ensure insurance awareness and penetration, the Chartered Insurance Institute of Nigeria (CIIN), the education arm of the industry in the country, in collaboration with the Federal Ministry of Education are working out ways to get states’ ministries of education enforce the introduction of insurance curriculum in secondary schools.

    President of CIIN, Dr. Wole Adetimehin, who disclosed this in an interview, said as part of the institute’s strategic action plans, it intends moving round all ministries of education across the nation to canvass the implementation of the policy.

    He said: “In our favour, the Federal Government has made insurance as one of the subjects to be examined by West African Examinations Council (WAEC) and National Examinations Council (NECO), students have to offer insurance from Senior Secondary one to three.

    “As part of our strategic action plans, we intend moving round all ministries of education across the nation to canvass the implementation of this policy. We have been to the Federal Ministry of Education and we have gotten the entire curriculum for the schools, now we are partnering the Federal Ministry of Education in enforcing or compelling all the states’ ministries of education to implement this new agenda.”

    He said the institute is already commissioning people to write text books on insurance in line with the curriculum, adding that the effort would at the same time create jobs for members of the institute.

    The Federal Government in a bid to deepen insurance awareness, last year, introduced a curriculum that would enable students acquire insurance knowledge at the secondary school level.

  • Pension operators target 20m contributors

    Pension Fund Administrators (PFAs) are targeting at least 20 million contributors in the next four years through the Contributory Pension Scheme (CPS), the President, Pension Fund Operators Association of Nigeria (PenOp), Dave Udeanu, has said.

    Udeanu said they would leverage on the integration of businesses in the informal sector to increase the number of contributors.

    He told The Nation that the operators are looking forward to boosting the figures from the current 5.5 million to 20 million by 2017.

    He said several additional incentives are being proposed to make the pension scheme more beneficial to persons working in the informal sector that account for over 60 per cent of the working population in the country.

    He disclosed that the National Pension Commission (PenCom) has released the the framework for the participation of persons operating in the informal sector, stressing that the draft is currently being finalised, adding that once the framework is released, it would ensure the participation of persons working in the informal sector and effectively increase the coverage of the scheme.

    PenCom, he said, will incorporate a multi-fund structure for Retirement Saving Accounts (RSA) funds into the amended investment guidelines before the end of the first quarter.

    “The decision to introduce the multi-fund structure in the first quarter of this year, is to allow enough time for public education and sensitisation by the commission and also allow operators enough time to be ready to implement the structure.

    “The multi-fund would be primarily differentiated by their overall exposure to variable income instruments and a contributor’s choice of funds may be limited based on the age of the contributor. Also the multi-fund structure would likely allow for the introduction of a non – interest or ethical fund,” he said.

    On the issue of misappropriation of pension contributions, the PenOp chief said the contributors in the CPS have nothing to worry about the safety of their retirement savings, assuring that the scheme is robust, safe and poised to help the retirees to live peacefully after their active employment years.

    Udeanu said the new pension scheme is a very simple antidote to the complexities of the old scheme and will ease the problems of retired workers going through hell to get their retirement benefits.

    Under the new scheme, fraud and delay in payment of benefits are almost non-existent due to structures and controls put in place for securing the funds and the fact that the accounts are always fully funded, he said.

     

     

  • ‘Include workers in life insurance scheme’

    ‘Include workers in life insurance scheme’

    LIFE insurance firms have been urged to involve workers in the private sector in their group life insurance schemes.

    The President, Nigerian Council of Registered Insurance (NCRIB), Mrs Laide Osijo, gave the advice when the management of Crystalife Assurance Plc, led by the Managing Director, Mrs. ‘Seyi Ifaturoti, paid her a courtesy visit in Lagos.

    Osijo said the 27 life companies in the country should evolve insurance policies that would meet the needs of the teeming Nigerian population as obtained in other countries where insurance penetration is deeper.

    The NCRIB chief noted that under the Pension Act, employers are expected to get life insurance cover for its employees.

    While saying that the public sector was complying with the Act, Osijo said there were rooms for ingenious life companies to prospect the numerous private sector workers and take advantage of the Act to grow the industry.

    She said the world over, life specialist companies play catalytic roles in economic development as they possess the required professional competence to conceive life policies or welfare schemes that would, ultimately, be of benefit both to employers and employees.

    Osijo, who commended the synergy between the National Insurance Commission (NAICOM) and the Pension Commission (PENCOM) on group life insurance and annuity, noted that it would grow the industry and improve the welfare of Nigerians.

  • ‘Nigerians ‘ll soon embrace insurance like telecoms’

    With the efforts being put in place by underwriters, the public will soon embrace life insurance products like they did in the telecoms sector some years back, the Managing Director Crystalife Assurance Plc, Mrs. Seyi Ifaturoti, has said.

    She told The Nation: “It is my belief that life insurance would be appreciated just as the telecommunications, which many people in the past, did not believe would be embraced by the number we have today.”

    She noted that the company has a basket of products ranging from education, health, pilgrimage policy, mortgage policies, credit life and more, all designed to improve lives.

    “We believe that addressing the needs of people would enable us to draw them to embrace our business. We have been trying to talk to people, engage in pool marketing, which we believe, sooner than later, we should be able to attain the desired level of penetration. It is our key objective to deepen the penetration of individual life business. We have given ourselves targets on how to achieve our set objectives,” she said.

    She said the operators would continue to educate the public on the need for insurance policies, adding that as soon as people begin to embrace it, it would have multiplier effects.

    The Crystalife Assurance boss said the opportunities for insurance has grown, requiring businesses to rethink product design, pricing, and distribution strategies to reach potential customers.

    On the investment into the company by LeapFrog, a leading emerging markets fund investor, she said the firm’s experience in building insurers in emerging markets would help CrystaLife stimulate significant growth in the sector.

  • MDRI’s success rate hits 75%

    The Market Development and Restructuring Initiative (MDRI), a programme adopted by the National Insurance Commission (NAICOM) to drive insurance penetration in the country, has recorded up about 75 per cent success, the Managing Director Riskguard-Africa Nigeria Limited, Yemi Soladoye, has said.

    Soladoye, who made this known at a media parley in Lagos, said the initiative is a turning point in the industry, adding that with the initiative, operators, regulators, service providers and the government, have realise that there is something going on in the industry.

    He said prior to the introduction of the MDRI, operators were leading the industry, but with the initiative, the fear of the regulator has become the beginning of wisdom.

    He said: “MDRI is also a turning point because it is from that stage we saw the regulator leading the market. There is a united focus for all of us. Whether you adopt it or not, we all know that there is a project on ground and there is a destination to reach and there is a direction as to the way we can go for us to secure increased penetration for insurance business in this country.

    “The initiative is a watershed in the history of the industry and it is also an evergreen thing. You cannot wish it away, as it has brought about many developments. When you read the strategy document, you would see that micro-insurance is part of the area that was recommended as where the industry will get development.’’

    Soladoye described Takafu as an aspect of the initiative. ‘’As MDRI is targeted at restructuring, all the restructuring that are happening in the market are embedded within the programme,” he added.

    He lauded the efforts of the Commissioner for Insurance, Fola Daniel, saying prior to his appointment, the best the industry had on the premium income was 24 per cent increase, but it has increased to 36 per cent.

    He said the results in the past five years that the Commissioner has been in the saddle, is an indication that the industry will meet its projections.

    He said with the industry’s projection, by the time the insurance firms that are engaging agents start operations, there will be an increase.

    He said as at December 2009, NAICOM had about 1,695 registered agents with different insurance firms, but that a year later, the number increased to 3,404. Despite the success, more firms are yet to embrace retail marketing, which he said, remains a panacea to the industry’s growth.

    “The insurance companies feel that retail system is not the area they want to adopt, despite the fact that the regulator has put in place for them a lot of incentives to make them go into agency recruitment. NAICOM does not have underwriting license neither does it, any brokering licence.

    “The regulator has done all it could, believing that this is what is operating ease where and if underwriters adopt the initiative we will get there. From the reports available to us, we have observed that the underwriters are realigning to embrace the initiative,” he said.

    He said the MDRI has not ended, stressing that there was a delay in the implementation and that the industry will adjust to meet the set targets.