The Nation Newspaper

Category: Insurance

  • Life annuity retirees under CPS hit 48,539

    •PenCom implements pension increase in Programme Withdrawal

    The number of retirees, who chose Life Annuity retirement plan, under the Contributory Pension Scheme (CPS), has risen to 48,539.

    These are the retirees who applied to the National Pension Commission (PenCom) to get their retirement benefits through the annuity plan as at last December.

    This is coming at a time PenCom implemented its pension enhancement initiative, which resulted in increased monthly pensions for retirees under the Programmed Withdrawal.

    Upon retirement, retirees are to choose between the two payment options.

    Life Annuity refers to fixed payments paid at intervals over the specified annuity. A Retirement Savings Account (RSA) holder may, upon retirement or on attaining 50, buy an annuity from a life insurance company licensed by the National Insurance Commission with monthly or quarterly payments.

    Programmed withdrawals, on the other hand, refer to withdrawals of funds regularly, which may be monthly, quarterly. An RSA holder upon attaining retirement age or 50,   could request for the balance in his RSA to be paid out via programmed withdrawals.

    In a report by the National Pension Commission (PenCom), 6,851 applications for annuity retirement plan were approved as by last December.

    According to the Commission, this brings the total number of retirees receiving their retirement benefits through the annuity plan to 48,539.

    The report further showed that the  retirees received N6.32 billion as lump sum and paid annuity premium of N35.77 billion to insurance firms, cumulating in a total N60.29 billion and N241.62 billion as lump sums and annuity premium.

    The retirees were receiving average monthly annuity of N2.53 billion as at by last December.

    Amid this development, the review and enhancement of pensions of retirees under the Programmed Withdrawal may make the payment option more attractive to retirees.

    Explaining the reason for the enhancement, PenCom said based on retirement benefits paid, there were  pensioners whose monthly pensions were low when compared with their terminal salaries.

    The Commission said: “The reasons for low level of pension for certain category of pensioners include the recent generous salary increases, especially those retiring within the first 10 years of the Scheme, whose accrued pension rights were calculated based on their salaries as at June 2004. In addition, the relatively low monthly pension contributions for most public service workers continues to hamper the accumulation of sufficient funds in employees’ RSAs at retirement. Unlike the old Defined Benefits (DB) Scheme where some categories of public servants were entitled to fixed sums as pensions by administrative fiat, the CPS equitably ensures that each employee earns pensions commensurate to their RSA balances at retirement.

    “The issue of low pensions remains the most potent bait, which is being manipulated by various interest groups in attempting to undermine the lofty gains of the CPS in Nigeria. The foregoing scenario prompted the Commission to examine the balances in the RSA of retirees receiving pensions through Pension Fund Administrators (PFAs)under the programmed withdrawal. It was discovered that the returns being generated by the PFAs on the balances of the RSAs of the majority of the affected retirees could be used to enhance their monthly pensions.’’

    It continued: “Consequently, the Commission sought for and obtained the approval of the Secretary to the Government of the Federation to implement the pension enhancement which resulted in increased monthly pensions for most retirees under the Programmed Withdrawal.

    ‘’Accordingly, the PFAs were directed to commence the enhancement of the pensions of all retirees under Programmed Withdrawal with effect from December 2017. The implementation of the pension enhancement is one of the significant milestones attained since the commencement of the CPS. It confirms that the CPS has workable internal mechanisms to respond to legitimate demands of retirees as they seek a reasonable retirement income. The Commission intends to sustain this periodic review exercise in line with relevant legal provisions.’’

  • Linkage to launch online motor insurance

    Underwriting firm, Linkage Assurance Plc, has secured the nod of the National Insurance Commission (NAICOM) to distribute its motor insurance policies online through a robust technology platform that makes it more accessible to its customers anywhere in the country.

    But, the policy could also be bought by anyone outside Nigeria whose vehicle is in Nigeria.

    The firm’s Managing Director, Dr Pius Apere, during an interaction with reporters in Lagos, said the product is expected to drive more sales and boost the firm’s premium growth, adding that the launch date would be announced soon.

    He said the platform will enable customers to buy comprehensive motor insurance, Motor Third Party, Third Party Plus and Third Party Fire and theft policies online for fleet and single cars.

    Apere said: “This is a major breakthrough for us because we are committed to ensuring that we deliver seamless service such that our customers from the comfort of their homes or offices can buy insurance and get their certificates without a face to face contact with us. It is a result of hard work, dedication and most importantly commitment to deliver consumer value.

    “Linkage will continue to invest in technology, research and its people for more innovative products and services. Our customers are our priority and we will continue to meet their needs and expectation.”

    For Motor Comprehensive and Motor Third Party Plus covers, he explained that in addition to personal data and car details, customers are expected to upload picture of the car to be insured.

    He added that upon the payment for the policy with the use of credit or debit cards or Linkage scratch cards, which are exclusive and Third Party Plus, the customer would get his insurance certificate and policy document.

    This portal could be used by brokers and agents who registered with Linkage Assurance Plc, he said. Upon the launch of the platform, visitors to Linkage Assurance website could get to the motor insurance portal via the “online insurance” button on the site, he added.

     

  • Lagos releases over N1b to retirees

    Lagos State Government has released over N1.24 billion for paying pension entitlements of 183 Public Service retirees under the Contributory Pension Scheme (CPS0 for last March.

    Lagos State Governor, Mr. Akinwunmi Ambode, stated this during the 49th Retirement Benefit Bond Certificate presentation.

    He reiterated his commitment to ensuring the payment of terminal benefits of retired civil servants.

    The governor, represented by the Commissioner for Establishments, Training and Pensions, Dr. Akintola Benson, said since the inception of this administration no fewer than 8,731 retirees were paid over N35 billion.

    He said though funding had been huge, the administration had been consistent in the payment of pension entitlements, adding that this was so because of the Ambode’s commitment and diligence.

    Lagos State Pension Commission (LASPEC) Director-General, Mrs. Folashade Onanuga, said the governor had been committed to retirees’ welfare and that this was so because of the understanding that the state government’s greatest assets are the employees.

    She stressed that their well-being is a priority.

    She assured the retirees that the government would keep in touch with them after they had collected their bond certificates to know how they were faring.

    She said: “Governor Ambode wants to make sure that your labour in service is not in vain and that is why he has promised to continue to reach out to you.On your birthdays, you will get gifts from the state through the Post Service Department in the Office of the Head of Service.”

    Mrs Onanuga advised the retirees to decide on which to opt for – programmed withdrawal or life annuity – to receive their terminal entitlements.

    Mrs. Ego Onwuzubike appealed to her colleagues to understand the conditions when filling forms with their Pension Fund Administrators (PFAs) and ask questions when they don’t understand some things.

    “The two exit options are good, depending on what you want, and no particular one should be forced on any retiree. Read the instruction very well before you fill your forms,” she said.

    Another retiree, Mr. John Oladipupo, lauded the governor for his concern and consistency in payment of terminal dues.

  • Committees on corporate governance, micro-insurance to boost industry guidelines

    The Joint technical, legal and micro insurance committees set up by the Nigerian Council of Registered Insurance Brokers (NCRIB) have met to fine-tune new regulations on Corporate Governance and Guidelines on Micro Insurance proposed by the National Insurance Commission (NAICOM) for the Council’s input.

    NCRIB President, Shola Tinubu, who made this known during the quarterly press briefing of the Council in Lagos, said the meetings are in line with the Council’s proactive response on industry’s regulatory guidelines.

    He pointed out the tempo of proactive response to laws and regulatory prescriptions by NCRIB have been sustained, adding that the Council hopes that the far-reaching suggestions by the Council would serve as good inputs into the guidelines.

    One of the cardinal focus of his administration, he said, is self-regulation, adding that this is the reason why they coined the “Self-Regulation for Self-Respect” slogan, which will continue to be their guide.

    “In our bid to give necessary impetus,” he said, “the Council has published nuggets on compliance issues for members.”

    He noted that the publication would be sustained to add value to members and simplify their operations, streesing that his administration started on a positive note in its quest for a better relationship with NAICOM through visitation to the Commission.

    “In the last three months, we have visited the Commission twice. We used the opportunity to raise crucial matters bordering on contemporary issues on regulation of Brokers, fines and penalties etcetera. The Commission expressed support and showed positive inclination to cooperate with the regime for the benefit of Brokers.

    “The promise of the Commission has started manifesting in its subsequent dealings with the Council as the Commissioner and a team of top management of NAICOM have found time to attend some of our events to shed light on torchy regulatory issues to the delight of members,”he said.

    On issues of compliance with the Federal Government Voluntary Assets and Income Declaration Scheme (VAIDS), he said: “We are all aware that there is no nation that could attain economic buoyancy without exploring taxation as a key revenue option of government. Most modern economies are buoyed on effective taxation and ours cannot be an exception.

    “However, it would be apposite to stress that it behooves on government to live more to its fiscal responsibility when adequate compliance is received from the people and institutions.  When the confidence level is enhanced, payment of taxes would no longer be seen as a burden, but a cardinal responsibility to be discharged by the citizenry.”

     

  • No room for non-insurance operator, says NAICOM

    Some customers, who connive with insurance brokers, are endangering the insurance industry by allotting proportion of risk to local underwriters without due cognisance of the insurers’ capacity. They also place risk abroad when the local market is not saturated, commissioner for Insurance, National Insurance Commission (NAICOM, Mohammed Kari, has said.

    Kari, who spoke while addressing journalists in Lagos, said some insured, in alliance with intermediaries, chose to exclude some underwriters from participation in underwriting certain risks without cogent tenable justification. ““Some insured in alliance with intermediaries, chose to exclude some underwriters from participating in underwriting certain risks without cogent tenable justification

    “Once the consumer places his risks with the insurer, whether direct or through a broker, he or the broker has no role in the placement of the reinsurance,” he said.

    He warned the insured that the Nigerian Insurance space should only be occupied by Insurance institutions licensed and regulated by NAICOM. “We would not accept insurances placed through a non-licensed operator in this market,”he warned.

    He said the  practice is not in sync with the sector’s ethics and is detrimental and dangerous to the sector.

    The Commission, he said, frowns at the practice, warning that such consumers should desist from it as they run counter to the sector’s regulations.

    He said: “Where we have noticed such practices, we have rejected applications from operators for approval to cede such risks abroad. This action of the consumer and broker sometime leads to delays in placement of the risk even when the insured has paid its premium to the intermediary. While the Commission is not averse to ceding of risk offshore, it must be done only when the local market has taken the much its capacity would allow.

    “Other areas where the Commission has issues with the insurance consumers are delays in submitting evaluation results of bidding processes to the Commission, the emerging practice of supposed premium funding by local brokers on behalf of the insured and delays by the insured in issuing placement and renewal instruction to the insurer. These delays, more often than not, make it impossible for the insurer to meet the application period for the placement of excess risks offshore where applicable.

    “These are trends that are not only dangerous to the industry, but to the consumer. We ask you to desist from these practices because they are neither in their best interest nor that of the insurance operator and of course, that of our nation.”

    He craved the understanding and cooperation of consumers to ensure compliance with insurance laws and regulations, particularly the Insurance Act 2003 and the Local Content Act. “Such good understanding between all stakeholders can only make NAICOM more effective in its role of protecting the insurance consumer,”he said.

    Speaking on improving service delivery of insurance products and services in the Country to consumers, the Commissioner said the Commission has signaled the issue of effective and efficient service delivery to consumers as a key priority with its establishment of Complaint Bureau Unit to deal with complains from members of the public against any insurance operator.

    “This unit has recently been upgraded and is headed by a Deputy Director to attend to aggrieved consumers. Many aggrieved consumers have continued to access this desk to register their complains with us. We advise you to take advantage of this desk and report your challenges to us and I assure you that any company found in default shall be compelled to do the needful.

    “There is no doubt that our competitive environment and the changes in the world economy as a result of globalisation, deregulation, privatisation, financial meltdown, and the modern advancement in technology give insurers the opportunity to transform their business operations and realigned with customers by understanding consumers‘ needs  and ensure an enhanced and efficient delivery of products and services. “We are aware that the satisfaction of consumers of product and services plays a vital role in the sustenance of any business. The difference between great and poor customer service has always been clear, and businesses on the wrong end of this spectrum usually pay a price. This is as true for insurance as it is for any other customer-facing business.

    “Today, the consequences of subpar service are amplified by the speed and reach of social media. One poorly handled claim, one mistake captured on a smart phone could escalate quickly into a brand-damaging crisis. This is why we believe it has become imperative that insurance firms increased their focus on providing great customer experience,”he said.

  • Robots’ use brings businesses, new loss, others

    The rise of robots usage has brought about a mixed-grill of fortune to businesses. While it has acrued huge benefits to businesses, it has also created new losses, risks and liabilities’ scenarios, a report by Allianz Global Corporate & Specialty (AGCS), has shown.

    The report showed that Chatbots, autonomous vehicles, and connected machines in digital factories foreshadowed what the future will look like.

    According to the report, the widespread implementation of Artificial Intelligence (AI) applications has brought many advantages for businesses such as increased efficiencies, fewer repetitive tasks and better customer experiences.

    However, in the wrong hands, the potential threats could easily counterbalance the huge benefits. Vulnerability to malicious cyber-attacks or technical failure will increase, as will the potential for larger-scale disruptions and extraordinary financial losses as societies and economies become increasingly interconnected. Companies will also face new liability scenarios as responsibility for decision-making shifts from human to machine and manufacturer.

    In the new report: “The Rise of Artificial Intelligence: Future Outlook and Emerging Risks”,  insurer, AGCS identified both the benefits and emerging risk concerns around the growing implementation of AI in society and industry, including the insurance sector. AI, also referred to as machine learning, is essentially software that is able to think and learn like a human.

    It read: “AI comes with potential benefits and risks in many areas: economic, political, mobility, healthcare, defense and the environment. Active risk management strategies will be needed to maximise the net benefits of a full introduction of advanced AI applications into society,” said Michael Bruch, Head of Emerging Trends at AGCS.

    “Today, weak or basic forms of AI are able to perform specific tasks, but future generations of so-called strong AI applications will be capable of solving difficult problems and execute complex transactions. AI is beginning to find users in almost every industry, from chatbots which offer financial advice to helping doctors to diagnose cancer. The technology is used to power driverless cars better predict the weather, process financial transfers or to monitor and operate industrial machines. According to Accenture, AI could double the annual economic growth rate in 12 developed economies by 2035..

    “But with these potential benefits come risks. Cyber risks, which are one of the biggest risks for businesses according to the Allianz Risk Barometer 2018, illustrate the two different faces of new technologies such as AI: AI-powered software could help to reduce cyber risk for companies by better detecting attacks, but could also increase it if malicious hackers are able to take control of systems, machines or vehicles. AI could enable more serious and more targeted cyber incidents to occur by lowering the cost of devising attacks. The same hacker attack – or programming error – could be replicated on numerous machines. It is already estimated that a major global cyber-attack has the potential to trigger losses in excess of $50 billion] but even a half-day outage at a cloud service provider has the potential to generate losses around $850 million.

     

  • Obasanjo okays Anchor’s policy on job loss

    •Firm partners OOPL

    Former President Olusegun Obasanjo has thrown his weight behind the Anchor Loss of Employment Insurance Scheme (AnchorLoEIS).

    Obasanjo okayed the product when Anchor Insurance Company Limited executives visited him at the Olusegun Obasanjo Presidential Library (OOPL) in Abeokuta, the Ogun State capital.

    In a statement, the company’s Head, Brand & Corporate Communications, Jamiu Osoba, said: “While introducing the members of the delegation, the General Manager, Retail and Micro Insurance, Uzoma Ofurum, introduced the product to the former president.

    ‘’Seeking to know the benefits of this unique insurance product, the former president was informed that it is developed to cushion the effect of the sudden loss of employment with the payment of salary income to policy holder for 24 months after loss of job.

    “Having been made aware of the product’s benefits, the former president thereafter endorsed AnchorLoEIS.’’

    Obasanjo said he would be in the forefront of the product’s promotion. He advised Nigerians, especially the employed to take the insurance policy to protect them against job loss.

    He urged the company to develop new products, especially policies for the elderly and unemployed.

    Meanwhile, Anchor has partnered   the OOPL Wildlife Park’s (WLP’s) “Adopt an Animal” programme by adopting a Lion tagged “Anchor Lion” in the wildlife.

    Ofurum said: “With this partnership, the company has created the opportunity to contribute to the conversion of local animal species and encourage their reproduction and preservation of wildlife, which in its stead, will further encourage local tourism.

    ‘’Obasanjo while receiving the delegation announced the plan to insure the animals in the Wildlife Park against the third party liabilities as it is essential to protect the visitors to the park from any unanticipated eventualities.

    ‘’Just in case somebody puts his hand in a lion cage or a lion breaks out. It is very important to have insurance despite all the barricades and cages we have in the park.’’

    The company’s Executive Director, Business Development & Marketing, Mr. Augustine Ebose, who led the delegation, lauded the former president for sanitising the financial industry through recapitalisation and the Local Content Act enacted during his administration.

    “The industry was undertaken by foreign underwriters on behalf of the local insurance companies due to lack of financial capacity before recapitalisation and enactment of local content law during your administration.

    “But the Local Content Act brought a rise in the industry and we are now underwriting about 75 per cent of local content. As one of the major service delivery companies in the industry, we want to thank you for this because we are your product,” Ofurum added.

  • Lloyd’s slumps to £2b loss

    Lloyd’s has plummeted from a £2.1billion pre-tax profit in 2016 to a loss of £2billion in 2017.

    The net swing of more than £4billion came as the combined operating ratio worsened to 114 per cent in the past 12 months (2016: 97.9 per cent).

    The insurance market flagged that the year was “one of the costliest” for natural catastrophes in the past decade.

    In particular it highlighted the frequency and scale of the disasters that struck around the world in the second half of 2017.

    Investment

    Major claims for the full year cost the Lloyd’s market £4.5billion, more than double the previous year’s £2.1billion figure.

    There were, however, increases in both gross written premiums (GWP) and net investment returns in a year that saw Lloyd’s contact all staff about voluntary redundancies and ultimately issue proposals to cut headcount by 10 per cent.

    GWP rose to £33.6billion in 2017 from £29.9billion in 2016 while returns ticked up to £1.8billion (2016: £1.3billion).

    Six years

    Lloyd’s Chief Executive Inga Beale commented: “The market experienced an exceptionally difficult year in 2017, driven by challenging market conditions and a significant impact from natural catastrophes.

    “These factors mean that for the first time in six years Lloyd’s is reporting a loss.”

    She added: “Lloyd’s is here to support customers when it matters most, providing the financial support to enable businesses, governments, and most importantly people to recover and rebuild their lives as quickly as possible and I’m proud of the market’s response.”

     

    • Culled from Insurance Age

  • Royal Exchange MD ‘is outstanding CEO’

    R oyal Exchange Plc Group Managing Director Alhaji Auwalu Muktari has

    been awarded the Outstanding Chief Executive Officer of the Year (Insurance) by Independent Newspapers during its Annual Awards at the Eko Hotel and Suites, Lagos.

    According to Independent Newspapers Managing Director/Editor-in-Chief, Mr. Ade Ogidan, the award was in recognition of Muktari’s doggedness, dynamism, unparallelled energy and passion in impacting insurance and excelling in a very difficult business terrain.

    Commenting on the award, presented by Vanguard Newspapers Publisher, Mr. Sam Amuka, Muktari thanked Independent Newspapers’ management for selecting him from the over 50 insurance chief executives in the country.

    He praised Royal Exchange Board and Management for their support to him.

    Muktari said the award would  spur him and his team to strive for better financial results.

    ‘’Our resolve as a 100-year company operating in Nigeria is to ensure that we leave a great legacy for those coming behind.

    ‘’The goal for all of us in Royal Exchange is to ensure we make the company among the best insurance groups in Nigeria,’’ he  added.

     

  • Draft Bill excites insurers

    •Operators may pay interest on delayed claims

    INSURERS are upbeat about the Consolidated Insurance Draft Bill hoping that it may soon be passed into law by the National Assembly.

    Nigerian Council of Registered Insurance Brokers (NCRIB) President, Shola Tinubu said the bill had been in the works for over seven years.

    Speaking at the Council’s Quarterly briefing at Insurance Brokers House, Yaba Lagos, said one of the major items in the bill is sanctions for  firms that delay in claims payment.

    He said insurance firms that do not pay claims promptly would be sanctioned by paying interest when they eventually pay.

    Tinubu said: “We have been talking about this draft bill for over seven years and there have been various endeavours to make amendment to it. But it is not totally strange because the process of law making is not exclusive to one procedure. We could have an executive bill, a bill from the House, and those that come in from different groups. What has happened so far is that the industry has been able to have a consolidated bill that has gone through a lot of process. And because the industry report to the Ministry of Finance, the ministry took it upon itself to start an initiative to amend the laws. They did say that what they want to do this time is to consolidate.

    “What is different from what we used to have is that we now have a consolidated bill. They set up a committee in which we, as brokers, are members. The immediate past president was a member, and I was also even before I became the president. For several months, we assiduously worked on that. We had several committees at NCRIB, including legal and technical committees. The committees took into cognizance all the things we would like to see not only for insurance brokers, but also for the brokers and for loss adjustment. We went through the motions, we even took motions for third parties.

    “It will gladden you to know that what you will find in the bill that was concluded is that insurance companies that don’t pay claims on time will begin to pay interest on them. So, if they are wasting time on it, they will know that they have to look for money to pay interest. This is the kind of things that we have put into the document. I know we keep calling it a bill, but it is really not a bill till it appears in the National Assembly. It is just that we are putting together a draft application by the Ministry of Finance before it takes it off finally. The ministry must send to the Justice Ministry, which will, in turn, not only ensure that it complies with legality, drafting rules and guidelines, but also other things the government is doing in all spheres. So, you don’t have one bill doing something good and the other working against it.

    “The Commissioner for Insurance, Mohammed Kari, at last our meeting, said were coming to the end now, that the document would be out soon and it would go back to the Ministry of Finance, which would then send it to the Federal Executive Council (FEC), and then to the Assembly.

    ‘’The assembly drafting team was also on the committee and were guiding us to ensure that we didn’t go out of sync with what they expected when we got to the assembly. So, if we have done all of these, I think that it will run through the House because there will be no objection and we will get it through this parliament.

    ‘’Overtime, the political cycles have shown more bills are enacted at the end of tenure. We have seen situations where they sign 100 bills in one day. What we hope anwd think is that since many of the stakeholders were part of the process and there is no opposition, it will run through the house quickly,” he added.