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Tag: insurance chiefs

  • Budget favours sector, say CEOs

    Budget favours sector, say CEOs

    • ‘It’ll grow it’

    Insurance chiefs have said the proposed N6.08trillion 2016 budget will rub off on the sector.

    They made this known while giving an outlook on the industry with journalists in Lagos.

    Managing Director, Anchor  Insurance, Mayowa Adeduro, said the capital and recurrent expenditures will bring growth to the insurance industry.

    He is optimistic that all the Ministries, Agencies and Departments (MDAs) of government will implement it.

    He said: “The capital and recurrent expenditure will bring growth to the sector. For instance, we have a capital expenditure of 30 per cent. We also have due diligence now inimplementing the recurrent expenditure.

    “Meanwhile, insurance is part of the capital expenditure because we are going to do Contractor All Risk (CAR) and engineering insurance for some of the capital projects. They budgeted for insurance in the recurrent expenditure,  and I believe they will carry it out.

    “I believe that the MDAs are not going to carry insurance overhead and spend it somewhere else. I think the proposed 2016 budget is the best so far and even though it is going to be a tough economic year for us, insurance should be positive in terms of developing and penetrating sectors of the economy.”

    He added that the regulatory body, the National Insurance Commission (NAICOM), is moving round the MDAs to ensure  that they set up insurance desks and not just buy insurance as something to spend little money on. They need to buy insurance now as real value.

    CIIN President and Managing Director, Nigeria Reinsurance Corporation, Lady Isioma Chukwuma on her part, said they expect everything that concerns the Government will be done the way they ought to be done.

    According to her, this will translate into improved premium income for the sector and the economy.

    “If all governments’ properties are adequately insured, and every sector of the economy puts insurance in their day to day activities, it will translate into improved premium income for the industry and the economy,” she said.

    “There is also the need for the economic policies of the Federal Government to be made in such a way that businesses get the money that they require so that people can have money to spend to be in business,“ she stated.

    Lady Chukwuma said insurance is the least of people’s priority, but it should not be so.  “We cannot blame the people because there are other needs and there is not much money in circulation. Insurance should be made top priority because if insurance is in place, then all other businesses can have the comfort to venture into new businesses.

    “I am hoping that money will be in circulation so that people can do their businesses as usual and if they do their businesses, there will be need to insure and when they do so, money will come into the insurance industry.”

    Managing Director, LASACO Insurance Plc, Dimeji Olona, said they qwere expecting the economy to take proper shape.

    He believes that the economy will jack up when government invest in infrastructure.

    He said the budget must favour capital expenditure over and above recurrent expenditure so that people can have money to do business.

    He stressed that this will bring employment which will trickle down on everybody in the country.

    “The economy will likely if they ensure they spend money in the right places and if this happens, people will dispose money effectively. People will also easily accept insurance and they will get value for their money.

    “To this end, we expect the government to spend money judiciously especially on budget expenditure and it will affect the industry positively”

    Managing Director, NEM Insurance, Tope Smart on his part said insurers are very hopeful and positive that with the steps that the government has taken, 2016 will be much better for the industry.

    “We believe that once the activities begin, insurance will benefit from all the steps that the government is taken. There has been so many issue this year like inaccessibility to foreign exchange by manufacturers and some people who normally do imports.

    “So we believe that when some of those issues are resolved, insurance companies will benefit”, he said.

  • Insurance chiefs want bill, others addressed by finance minister

    Insurance chiefs want bill, others addressed by finance minister

    Expectations are high among chieftains of the Nigerian insurance sector following the appointment of the new Minister of Finance, Mrs. Kemi Adeosun. The chieftains want the minister to help with the passage of Insurance Bill, which has been at draft level for long.

    They are looking up to her to restructure the economy and put in place effective policy measures that would deepen insurance penetration, enforce compulsory insurances and marine insurance, among others.

    The sector, like others within the financial system, is being regulated by the National Insurance Commission (NAICOM) and directly under the supervision of the Ministry of Finance.

    The sector, which has a record premium income of N300 billion, has been affected by the recent foreign exchange crisis. It has reduced the sector’s revenue from number two position in Africa, to four in terms of volume, and reduced insurance penetration to one per cent.

    • Thomas
    • Thomas

    The Director-General, Nigeria Insurers Association (NIA), Sunday Thomas, said he is excited that the nation now has a minister of finance, who will be responsible for the activities within the insurance sector, adding that he  expected the minister to end waste in government assets by imbibing insurance culture.

    He stressed the need for her to quickly deal with the foreign exchange situation, pointing  out that Nigeria’s image on global insurance map is low because of the exchange rate problem. He said the  sector has  dropped from being the second biggest  in Africa to fourth, falling behind South Africa, Morocco and Egypt.

    He is, however, optimistic that there is room for improvement, stressing  that through good policy measures, the situation could improve.

    He said practioners also expect that the minister will look into the problem of non-payment of premium, insurance of government assets, the Group Life Insurance Policy (GLIP) for government workers, manage micro economic variables, such that citizens have more money in their pockets and help in fast-tracking the passage of the insurance law.

    He said: “I listened to her when she appeared before the Senate; no doubt, she is a visionary woman. We as insurers, expect that not only will the issue of asset acquisition be uppermost in her agenda, but also asset maintenance and the deployment of insurance as a mechanism for maintenance of state assets. This I believe will be good for our economy at this point in time.

    “We have had incidents where assets acquired by government were destroyed and were either replaced by taxpayers’ money or never replaced at all because they could not generate new funds to replace them, and therefore, we lost their use. We believe that proper structuring of the nation’s finances will go a long way in curbing waste in the system.”

    He saiod a lot of people are hungry, believing that the problem can be solved through economic restructuring and effective policy measures that can put more money in the pockets of the people. “She is not going to do it alone, it will be in conjunction with other ministers. I believe it will assist and insurance too will become more interesting,” he stated.

    On the Insurance bill, he explained that it is an executive bill, which has been at a draft state for a while.

    “We believe it will be uppermost in her agenda. I participated on the committee that drafted the bill. There are aspects of it that we believe can fast track the sector and also empower the regulator to carry out effective oversight functions.”

    “We also want her to look into marine business as she is also responsible for supervision of the Nigeria Custom Service. We are experiencing huge gap in the area of marine insurance. Section 67 of the Insurance Act, 2003 makes insurance of imports compulsory. Any import must be insured with company domiciled in Nigeria and we hope that she will make sure that every good that comes into this country carry the genuine cover.”

    According to the Director- General, to aid the customs, operators have extended their industry portal, the Nigeria Insurance Industry Database (NIID) to cover and checkmate fake marine certificates.

    Thomas also noted that just before the end of the last administration, the former minister of finance, Mrs. Ngozi Okonjo-Iweala, held a summit with the sector for the first time and showed readiness to help move the sector forward, saying that agenda were set and committees were formed.

    He urged the new minister to continue from where Dr. Okonjo-Iweala stopped and improve on the modalities laid on ground.

    The Managing Director, LASACO Assurance Plc, Olusola Ladipo-Ajayi said he has confidence in the minister, stating his acquaintance with her on an insurance matter when she was Ogun State Commissioner for Finance.

    Ladipo-Ajayi, who is also a past chairman of the Nigeria Insurers Association (NIA), said he had interactions with her ministry on some insurance issues. He said she was very cooperative on the matter and helped resolve the issues amicably.

    He believes that in the light of the fact that she understands insurance, she will help grow the sector. “I believe that she will help drive insurance penetration in the country and help with the passage of the Insurance Bill, which is consolidation of insurance laws among other things,’’ he said.

    Staco Insurance Plc Managing Director,  Shakiru Oyefeso, on his part, appealed to the minister to promote insurance in her policies. He expressed belief in the administration of President Muhammadu Buhari, whom according to him, understands the need for insurance in the country.

    He added that the former Governor of Lagos State, Babatunde Fashola, who is now the Minster of Power, Works and Housing also understands the benefits of insurance.

    He pointed out that insurance is a way to fight against poverty and any government that knows his onions will boost insurance penetration in the country.

    “Government should enforce compulsory insurance to curtail national waste. It must look inwards and not continue to dip hands into their running funds when there are losses. Government should imbibe insurance in all its activities so that it can mitigate losses that Nigerians suffer. The amount of premium that will be paid will not kill them. This will in turn grow the insurance companies and also create employment,” he said.

    He stressed that risk management is crucial for any government, adding that insurers have good personnel that can help in its risk management.

  • Insurance chiefs want bill, others addressed by finance minister

    Insurance chiefs want bill, others addressed by finance minister

    Expectations are high among chieftains of the Nigerian insurance sector for the newly appointed minister of finance, Mrs. Kemi Adeosun. The chieftains want the minister to help with the passage of Insurance Bill which has been at draft level for long.

    They also want her to restructure the economy and put in place effective policy measures that will deepen insurance penetration, enforce compulsory insurances, marine insurance, among others.

    The sector like other sectors within the financial system is being regulated by the National Insurance Commission (NAICOM) and directly under the supervision of the ministry of finance.

    The sector which has a record premium income of N300 billion has been affected by the recent foreign exchange crisis. It has reduced the sector from number two position in Africa to number four in terms of volume and reduced insurance penetration to one per cent.

    • Thomas
    • Thomas

    The Director-General, Nigeria Insurers Association (NIA), Sunday Thomas, said he is excited that the nation now has a minister of finance who will be responsible for the activities within the insurance sector. He said he expects the minister to end waste in government assets by imbibing insurance culture.

    He added that there is also the need for her to quickly deal with the foreign exchange situation, noting that Nigeria’s image on global insurance map is low because of the exchange rate problem.

    According to him, the  insurance sector has  dropped from the second biggest sector position in Africa to fourth position, falling behind South Africa, Morocco and Egypt.

    He is however optimistic that there are always rooms for improvement.

    He added that through good policy measures by the minister, the situation of things in the country will also improve.

    He said practioners also expect that the minister will help look into the problem of non-payment of premium on insurance of government assets including the Group Life Insurance Policy (GLIP) for government workers, manage micro economic variables such that citizens have more money in their pockets and help in fast-tracking the passage of the insurance law.

    He said: “I listened to her when she appeared before the Senate; no doubt, she is a visionary woman. We as insurers expect that not only will the issue of asset acquisition be uppermost in her agenda but also asset maintenance and the deployment of insurance as a mechanism for maintenance of state assets. This I believe will be good for our economy at this point in time.

    “We have had incidents where assets acquired by government were destroyed and were either replaced by taxpayers’ money or never replaced at all because they could not generate new funds to replace them, and therefore, we lost their use. We believe that proper structuring of the nation’s finances will go a long way in curbing waste in the system.

    “A lot of people in the country are hungry and I believe that this problem can be solved through economic restructuring and effective policy measures that can put more money in the pockets of the people. She is not going to do it alone, it will be in conjunction with other ministers. I believe it will assist and insurance too will become more interesting.”

    On the Insurance bill, he explained that it is an executive bill which has been at a draft state for quite a while.

    “We believe it will be uppermost in her agenda. I participated in the committee that drafted the bill. There are aspects of it that we believe can fast track the sector and also empower the regulator to carry out effective oversight functions. If the bill is passed, since it is an executive bill, she will have the responsibility to push at the executive council so that the right thing can be done and it can be passed to the National Assembly, which we also believe can quickly pass it into an Act.

    “We also want her to look into marine business as she is also responsible for supervision of the Nigeria Custom Service. We are experiencing huge gap in the area of marine insurance. Section 67 of the Insurance Act, 2003 makes insurance of imports compulsory. Any import must be insured with company domiciled in Nigeria and we hope that she will make sure that every good that comes into this country carry the genuine cover.”

    The Director- General said to aid the customs, operators have extended their industry portal, the Nigeria Insurance Industry Database (NIID) to cover and checkmate fake marine certificates.

    Thomas also noted that just before the end of the last administration, the former minister of finance, Mrs. Ngozi Okonjo-Iweala, held a summit with the sector for the first time and showed readiness to help move the sector forward. He said agenda were set and committees were formed.

    He urged the new minister to continue from where Dr. Okonjo-Iweala stopped and improve on the modalities laid on ground.

    The Managing Director, LASACO Assurance Plc, Olusola Ladipo-Ajayi said he has confidence in the minister, stating his acquaintance with her on an insurance matter when she was Ogun State Commissioner for Finance.

    Ladipo-Ajayi, who is also a past chairman of the Nigeria Insurers Association (NIA), said he had interactions with her ministry on some insurance issues. He said she was very cooperative on the matter and helped resolve the issues amicably.

    He believes that in the light of the fact that she understands insurance, she will help grow the sector.

    He said: “I believe that she will help drive insurance penetration in the country and help with the passage of the Insurance Bill which is consolidation of insurance laws among other things’’.

    The Managing Director, Staco Insurance Plc, Shakiru Oyefeso, on his part appealed to the minister to promote insurance in her policies. He expressed belief in the administration of President Muhammadu Buhari whom according to him, understands the need for insurance in the country.

    He added that the former Governor of Lagos State, Babatunde Fashola who is now the Minster of Power, Works and Housing also understands the benefits of insurance.

    He pointed out that insurance is a way to fight against poverty and any government that knows his onions will boost insurance penetration in the country.

    “Government should enforce compulsory insurance to curtail national waste. It must look inwards and not continue to dip hands into their running funds when there are losses. Government should imbibe insurance in all their activities so that they can mitigate losses that Nigerians suffer. The amount of premium that will be paid will not kill them. This will in turn grow the insurance companies and also create employment,” he said.

    He stressed that risk management is crucial for any government, adding that insurers have good personnel that can help in its risk management.

  • Better days ahead, say insurance chiefs

    Better days ahead, say insurance chiefs

    Stakeholders in the insurance industry met in Ogun State last week. Omobola Tolu-Kusimo, who was at the forum, reports that despite the challenges, they see a bright future in the industry.

    THE industry has recorded a year-on-year turnover of 18.4 per cent and17.4 per cent compounded average growth (CAGR) between 2007 and 2013.

    Its total assets have hit N711.4 billion from about N347.1billion in 2007, indicating an increase of 104 per cent.

    This notwithstanding, the industry remains largely underpenetrated with insurance density at 0.225 per cent considering industry premium of $1.5 billion in comparison to other African countries, these were some of the highlights of the performnace of the industry.

    But industry chiefs said the gap was as a result of low penetration. Group Managing Director, Custodian and Allied Insurance Plc, Wole Oshin, in a presentation at an insurance forum in Ogun State titled: “Opportunities and returns in the Nigerian business environment”, said regulatory changes in the industry, including No premium, No cover, International Financial Reporting Standard (IFRS) adoption, enforcement of Market Development Restructuring Initiative (MDRI), among others, have led to growth in the industry.

    He however said the challenges, which include the negative perception of the industry, still persist.

    According to him, information technology is still below par and wide data gathering and document management is poor.

    He said this affected proper product pricing and development, adding that the industry is highly fragmented and competitive, thereby affecting the pace of growth in overall market size.

    He identified other challenges such as enforcement of compulsory insurances, scarcity of human capital in certain specialised areas like actuaries and rise in fraudulent claims.

    Oshin said the life business contributes 25 per cent and growing with a potential to surpass the general business in 10years.

    He said: “A shift in focus to retail business would largely unlock hitherto uninsured risks through product channels, such as mobile phones and retail outlets. The bottom of the pyramid and low income mass market hold a huge potential for the industry, albeit in the medium to long term e.g. agricultural insurance.

    “A regulatory environment that is favourably disposed to change and growth and a closer collaboration between government and the industry will help the industry.

    “The industry performance is impressive. The gross premium income growing from N100 billion in 2007 to N302 billion at the end of 2014, an increase of over 200 per cent. The Insurance sector is dominated by the general insurance sector. This trend is however changing rapidly.”

    Oshin said the recent happenings in the industry are pointers to a reinvigorated and competitive industry which includes:

    He said favourable economic performance, recent policies and government support through various legislations and the repositioning among industry players to harness the huge market potentials through mergers  and acquisitions is vital to further growth in the industry.

    He however cautioned, saying that the economy had been slow and might be sliding to a recession which could affect insurance business across board.

    The sector is going through a process of change and recovery, however with recent developments in the economy, the companies that will stand tall are those who are savvy enough to navigate through the predicted downturn in the economy.

    Group Managing Director, Cornerstone Insurance Plc, Ganiyu Musa, who spoke on critical success factors for market expansion and penetration strategies, said operators should maintain price discipline to deal with rate-cutting issues.

    He said there was also greater collaboration between underwriters and brokers, adding that operators should be self-regulated.”There is need for alignment of innovative products with the customers’real needs, increase micro-insurance penetration in new segments, such as agriculture, introduce Takaful insurance to rural parts of the country to further deepen insurance penetration.

    “We must fully exploit the opportunities offered by the banking distribution platforms, use of technology to improve products distribution and leverage on the 126 million active lines to boost insurance penetration.

    “There must be greater collaboration between operators and regulator to expand the market, enforcement of the six classes of compulsory insurance through collaboration with other relevant stakeholders and improved tax environment for operators and policyholders.”

    Musa noted that if all of these are done, N1 trillion is achievable by operators in three years.

    He said, according to EFInA (2014), 14.3 million adults would like to have insurance products.

    He said market discipline, public awareness on products and claims settlement is very crucial.