The Nation Newspaper

Category: Insurance

  • Royal Exchange appoints three senior managers

    Royal Exchange Plc has appointed three management staff.

    According to the Corporate Communication Department of Royal Exchange, they are Mr Donald Nosiri, Group Head, Human Resources; Abiola Sanni, Group Head, Asset Management and Mrs. Temitope Ige-Isang, Group Head, Retail Business.

    The Group Managing Director, Mr Chike Mokwunye, said: “These new appointments are in line with our vision to once again be one of the dominant players in the insurance industry in the coming years.”

    Mr Sanni, a certified public accountant, has experience in corporate finance and investment management. Mr Nosiri is an experienced human resources practitioner with over 21 years experience in the banking sector and also in human resources consultancy.

    Mrs Ige-Isang has over 22 years experience in sales spanning several industries.

  • Over 13,000 agents not registered, says NAICOM

    About 70 per cent of insurance companies do not register their agents with the National Insurance Commission (NAICOM), The Nation has learnt.

    Investigation revealed that out of about 15,000 agents working for insurance firms, only 1,900 are registered. It was learnt that the agents were not registered because the insurance companies want to avert expenses charged by NAICOM on agents.

    A consultant with the National Insurance Commission, Yemi Soladoye, said only 30 per cent of insurance companies have registered their sales agents. He noted that the operators do so because they want their agents to perform before they can start paying huge fees on them. He urged insurers and brokers to train agents to deepen insurance penetration.

    He said: “The fact is that even the brokers need agents. I have been to a country where a broker has 3,000 agents. In Kenya, there is a bankassuarnce agreement between two brokers and two banks. What the brokers did was to appoint agents that sell insurance to customers of the bank. Agents can only sell a particular product of a particular underwriter, but a broker sells products of all underwriters.”

    Observers said agents are crucial link between the public and the insurer. Therefore, if they are well- trained, they could effectively play the role of an efficient intermediary between the insurer and insured in insurance transactions.

    He said unlike the insurance broker who is the agent of the insured, the insurance agent is the agent of the insurer who appoints him.

  • PFAs pay N12b into life annuity accounts

    PFAs pay N12b into life annuity accounts

    Pension Fund Administrators (PFA) paid N12.09 billion to some life insurance companies for life annuity bought by retirees as at December 31, last year.

    Speaking on Issues arising from marketing of retirement annuities, at a workshop in Lagos, the Head of Benefits and Insurance, National Pension Commission, Mr Olulana Loyinmi, said Section Four of the Pension Reform Act 2004 provides that an employee can, on retirement, make withdrawals from his Retirement Savings Account (RSA).

    Such withdrawal, he said, could be monthly or quarterly based on his life expectancy of life annuity bought from a life insurance company.

    He said the retired worker can as also withdraw a lump sum from the balance in his RSA account provided that the amount left in the account after the withdrawal is enough to fund the life annuity or a programmed withdrawal of not less than 50 per cent of his yearly remuneration at the date of retirement.

    He explained that retirement by life annuity under contributory pension scheme started in 2010, adding that as at last year, only 10 life assurance firms in the country were licensed to transact retirement annuity business.

    The PenCom official stated that as at the end of 2012, 2,343 retirees were on annuity, while the total life annuity premium paid amounted to N12.09 billion and total monthly pension by annuity averaged N118.06 million.

    The Acting Director-General of PenCom, Mrs Chinelo Anohu-Amazu, said a major challenge facing annuity business in the country is inadequate sensitisation and public enlightenment on the expectations from stakeholders.

    She said annuity is a contract between the annuitant and a service provider, usually an insurance company for the payment of an agreed amount of money at given intervals to the annuitant. She said there are different types of annuity, but the one recommended under the Pension Reform Act 2004, is life annuity, which seeks to guarantee income for retirees until they die.

    Mrs. Amazu said life annuity, one of the modes of withdrawing retirement benefits under the pension reform law is a regular income received from a life insurance firm in consideration for payment of premium, or transfer of the accumulated savings standing in the retirement savings of a worker or part of it at the time of retirement.

  • LASPEC advises retirees on wills

    The Lagos State Pension Commission (LASPEC) has advised retiring civil servants to write wills while they are still alive.

    The Director-General, Mr Rotimi Hussain, said a will is an essential document in the Contributory Pension Scheme.

    Hussain, who gave the advice during a retirement seminar organised by LASPEC in partnership with some Pension Fund Administrators (PFAs) for workers billed to retire from the state public service between January and June, said: “The erroneous belief in many quarters is that if you prepare your will, you may die early.This is not the case. Preparation of a will is not a licence to early; rather it is an essential document which allows beneficiaries or next-of-kin to unfettered access to the estate when eventually left behind by the benefactor.”

    Explaining further, the Director-General said: “If a person died intestate without a will, the beneficiaries would be required to provide a letter of administration from the Probate Registry of a Law Court before they could access the balance in the Retirement Savings Account.

    He said: “Obtaining the Letter of Administration is always a difficult task, considering the time and finances involved.

    “Lagos State Pension Commission is already exploring the possibility of identifying reputable organisations who will assist workers in the area of will preparation,” he said.

    He noted that the pre-retirement seminar was designed to help retirees on pensions.

     

     

     

  • Mutual Benefits aims high

    Mutual Benefits Assurance Plc said it has positioned itself to take over as the leading insurance firm in the country in the next three years.

    To realise its plans, the underwriting company disclosed that it has undertaken strategic investments in various sectors of the economy.

    The Group Managing Director (GMD), Akin Ogunbiyi, in an interview with The Nation, said:“With a lot of successes already recorded in the retail space of the insurance market, Mutual Benefits Assurance Plc is expanding beyond insurance into property, housing development; mass transportation and investment in other subsidiaries within and outside the shores of Nigeria.

    “We want to be number one in the industry by 2015 in all fundamentals,” he said.

    On the company’s performance in 2012, the helmsman said though the result has not been released, he is sure the company would record about 35 per cent growth in premium volume, adding that the company achieved premium income of N10.7 billion in 2011, and made a profit before tax of N916.9 million, as against N892.2 million in 2010.

    Its profit after tax rose from N758.4 million in 2010 to N763.8 million in 2011, while claims settlement increased from N731.5 million in 2010 to N1.02 billion in the 2011 financial period.

    Ogunbiyi said the underwriting firm has invested N3 billion in the development of Mutual Alpha Courts at Costain, Lagos, adding that the work had reached about 75 per cent completion stage.

    He said the firm’s investment in marginal oil field was almost at its completion stage, while other investments were yielding returns in line with its projection.

    He said with a workforce in excess of 4,000, the firm is pulling long terms funds that leave room for more expansion in other sectors of the economy.

    He said the company’s success story is also hinged on the quality of its product offerings, adding that the firm has in its offerings, 45 different products, which allow the insured to make savings for the future.

    “What we have done is to design our products to reach the mass market. The premiums are as low as N50 daily and these have offered the lower class of the society, the market women and the artisans the opportunity to get insured”

    According to him, beyond its huge investment in the Lagos Bus Rapid Transport (BRT) project, it has invested in the Imo State Transport Company (ITC).

    “Before we came into ITC to provide vehicles for the company, it was almost moribund and, today, life has returned in that company and the state government is happy with us,” Ogunbiyi said.

    We are not stopping there; rather, we are determined to make insurance more relevant in the economy by providing long term funding for development of other sectors, he added.

  • Pension remittance: Recovery agents go after 8,584 defaulting firms

    The National Pension Commission (PenCoM) has made good its threat of recovering workers’pension deductions withheld by some employers.

    It has asked Recovery Agents to collect all outstanding remitances. from defaulting firms. The exercise has recorded progress, according to the Chairman of the Pension Operators of Nigeria (PenOp), Mr Dave Udeanu.

    Udeanu told The Nation that the Recovery Agents have visited 8,584 of 15,760 defaulting firms.

    He said:“Recovery agents appointed by the National Pension Commission to go after companies, or organisations that failed to remit their employees’ contributions to Pension Fund Administrators (PFAs), have made progress by visiting 8,584 of such firms and recovered various amounts from some of them.”

    He said as at the end of January, the liabilities from the firms visited stood at N2.5 billion. Demand notices have been sent to them; the accounts of the Pension Fund Custodians to remit the monies and how the remitances should be made have been forwarded to them.”

    The Pension Reform Act (PRA) 2004 made it compulsory for companies seeking government business to present certificates of compliance, which indicates that they are meeting the regulation on staff pension contributions.

    The PRA 2004 also mandates employers with minimum of five staff to subscribe to the new pension scheme.

    To ensure enforcement of the law, the commission said employers who fail to remit their pension contributions would pay two per cent surcharge, two weeks after deductions have been made by them.

    PenCom noted that employers are to remit employees contributions not later than seven working days from the day salary is paid, adding that if the default persists after three months, one per cent of the outstanding would be paid to the commission.

    The co

    The Organised Private Sector (OPS) has taken over the lead in pension contributions from the public sector which has been at the fore-front since 2004 when the contributory scheme became operational.

    Udeanu said the OPS has performed tremendously well, as organisations in the sector are complying with the scheme by remitting their contributions promptly.

    He said: “The organised private sector has done very well. Often time, we talk of the public sector, but we should give credit to the private sector, for most of them treat pension as they treat salary. It is important to encourage them for they have turned out to be the strongest pillar or supporters of the scheme. The private sector has overtaken the public sector in terms of registration of contributors.”

    Udeanu also disclosed that as part of efforts aimed deepening the sector, pension operators and the National Pension Commission (PenCom) are working out ways of integrating the over 40 million workers in the informal sector into the scheme. He noted that the framework to that effect will soon be finalised.

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

    “The decision to introduce the multi-fund structure in the first quarter of 2013` 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 also allow for the introduction of a non-interest or ethical fund,” he said.

    The Managing Director, Legacy Pension Managers Limited, Mr Misbahu Yola, said most of the big companies treat pension deduction and remittance the same way they treat salaries. This is what it is supposed to be, he said; adding that it is important to encourage them.

    He said when the scheme started initially, employers felt it was another burden on them but that now most of them understand what they government meant by taking that decision.

    He, however, said many employers are not still complying.

     

  • Life policies outpace rest of industry

    Life insurance was the largest segment in the overall United States insurance industry in terms of gross written premium from 2007 through 2011 but the industry’s book of business shrank during that time, according to a new report from market research firm

    The report, “Life Insurance in the US, Key trends and opportunities to 2016” reviews both historical data and examines the industry’s prospects through 2016, according to a statement.

    The total written premium value of the life insurance segment decreased at a compound annual growth rate (CAGR) of 0.7 per cent during the review period. The report examines written premiums, incurred losses, loss ratio, commissions and expenses, and also analyses the various distribution channels for life insurance products, according to the publisher’s statement.

    A separate financial analysis prepared by SNL Financial reported that while industry revenue grew by eight per cent between 2010 and 2011, it has been nearly flat over the five-year period.

    Revenues totaled just over $815 billion in 2007, grew to $844.7 billion the following year, then slipped during the financial crisis before rebounding to $835 billion in 2011.

    Net income declined 8.8 percent between 2010 and 2011, and at $14.4 billion in 2011 was slightly less than half of 2007’s $31.6 billion, according to SNL Financial.

    The decrease is attributed to high levels of unemployment, which depressed the demand for group life insurance products and the uncertain economic environment, which resulted in a decline in gross written premiums in the term life category, researchers found. In addition, the low investment returns due to low interest rates represented losses to the earnings of life insurers.

    Other industry watchers have said life insurance companies face a broad array of headwinds, from the demographic to the financial. Accounting giant Ernst & Young’s 2013 industry outlook noted, “Insurers are competing in a market where average household expenditures on life insurance have declined 50 per cent over the past decade.” Deloitte, another large accounting firm, issued its own pessimistic US life insurance predictions for the year: “With millions still out of work or underemployed, and many more focused on repayingdebts, a lot of consumers have shorter-term financial priorities to worry about other than life or annuity protection.”

     

     

     

  • Nigerians advised to use brokers

    Nigerians have been urged to patronise registered brokers when taking insurance covers.

    General Manager (Technical), Relics Insurance Brokers Limited, Mr Festus Alikwe, said it is better and safer because the registered brokers are experts and will give good advice.

    He said: “For those seeking to take up insurance cover for their properties, businesses and even those seeking to take up life insurance covers, they should do so through qualified and registered insurance brokers.”

    He said this is important because brokers understand the technicalities of the business more than the intending client, adding that this is for the good of the client.

    Alikwe told The Nation that the way brokers see insurance firms is not the same way the prospective clients who are not insurance experts, see them.

    He said if an intending client goes s to an insurance company, it is still the same amount of premium he will have to pay if he goes through the brokers.

     

     

     

  • Lagos pays N14.45b to retirees

    The Lagos State Government paid N14.486 billion to 2,604 retirees of the contributory pension scheme in two years, the Director-General Lagos State Pension Commission (LASPEC), Rotimi Hussain, has said.

    Hussain, who made this known at the Third Pre-Retirement seminar for workers retiring from the state’s service between January and June, said the contributory pension scheme, has continued to record huge success, adding that the amount was paid between October 2010 and December 2012.

    He noted that the event was designed to help the would-be retirees prepare for their physical, emotional and financial well-being upon retirement.

    He said with effective planning, retirees would be afforded the benefit of being in a better position and frame of mind to build a vibrant and rewarding life in retirement.

    He said: “I am pleased to state that the contributory pension scheme in Lagos State has continue to record huge success. As we speak, 2,604 retirees who retired from the State public service under the scheme have been paid N14.486 billion between October 2010 and December 2012.

    “This feat gives hope that with the contributory pension scheme, the future is absolutely bright for workers in the state.”

    Hussain said the state is poised to provide comfortable live for its workers during retirement.

     

     

     

     

  • STI adopts risk framework to drive operations

    Sovereign Trust Insurance Plc is embracing enterprise risk management framework to drive its operations.

    The Managing Director/Chief Executive Officer, Mr Wale Onaolapo, said the framework is designed to assist the Board and Management to align the company’s risks to its business strategy, enhance risk response decisions, reduce operational surprises and losses, identify and manage interdepartmental risks, allow for more informed risk decisions and improve capital management.

    He said the regulatory environment has evolved with regulators seeking assurance as to the robustness of the risk management capacity and the financial viability of financial institutions in a stressed environment.

    He addded that part of the company’s policy is to maintain a strong capital base to support the growth and the development of its business and to also be able to meet regulatory capital requirements at all times through its corporate governance, processes and procedures.

    Its spokesperson, Segun Bankole, said the move became necessary to ensure that operations of the organisation are carried out on sound business principles to protect shareholders and other stakeholders’ interest.

    Head of Risk Management and Control of of the firm, Mr Sanni Oladimeji, said it has become imperative to apply sound risk management principles to ensure that organisations are safeguarded against unforeseen risks.

    He further said the company’s management is committed to the execution of the framework in the years ahead.

    He noted that the creation of a Risk Management and Control Department in the organisation has given a voice to staff. He said employees have been trained to make decisions on risks.