The Nation Newspaper

Tag: Insurance

  • Swiss Re acquires 25 percent stake in Leadway Insurance

    Leadway Assurance Company Limited has announced that Swiss Re has purchased a 25 per cent stake in the company.

    Leadway Managing Director Mr Oye Hassan-Odukale made this known  in Lagos.

    According to him, the acquisition of shares by Swiss Re marks the beginning of a new chapter in the firm.

    He said the complementary capabilities and philosophies of the two firms would bring great opportunities for Leadway to emerge as a leading African financial institution.

    He said: “Swiss Re was selected as an investor because of the existing and well-established relationship between the two organisations. This comes in addition to Swiss Re’s long-standing commitment to the insurance sector which combines financial strength, risk transfer expertise and its direct investments.

    “The investment allows Swiss Re to deploy capital in-line with its strategy of accessing new risk pools in emerging markets and to support insurance development across the globe. The investment comes after the exit of the International Finance Corporation (IFC), a member of the World Bank, which was the second largest shareholder of Leadway Assurance.

    “The relationship between Swiss Re and Leadway started nearly 40 years ago when the then domestic insurer was in the process of ramping up its direct and personal line insurance operations into commercial and industrial line insurance operations to compete in a market which was dominated by much older foreign linked insurers.’’

    Hassan-Odukale added: “For over 45 years, Leadway has enjoyed steady growth while providing integrated insurance and financial services to its numerous clients and policyholders. It has substantial investment in key sectors of the economy with a diversified portfolio of subsidiary investments in pension fund management, trusteeship and hospitality.The company’s remarkable success has been possible because of its sound professional and business standards backed by the integrity of its board of directors and executive management.’’

  • Embrace insurance, Nigerians urged

    Nigerians have been urged to see insurance as a way of life. Managing Director, Great Nigeria Insurance Plc, Managing Director Mrs. Cecilia O. Osipitan gave the advice in Lagos.

    Speaking with reporters in Lagos, she said the low insurance awareness in the country remains one of the major reasons a large percentage of the public are not insuring.

    Mrs Osipitan urged Nigerians to  educate themselves on the benefits  of an insurance policy.

    She said various insurance products had been designed to protect lives and properties, adding that the cases of road accidents, buildings collapse, and fire outbreaks across the country, where properties worth millions of naira have been destroyed, made insurance policy imperative.

    She stressed that the most essential thing is for the public to know that insurance is beneficial to them.

    She said: “Nigerians have waited too long in recognising and accepting the reality that without insurance, it is like one building a house without a foundation and in no time, it could come crashing; and when that happens, you will have to start from the scratch again with more funds than you initially expended.

    “Insurance gives you the promise of a safe and comfortable future. The earlier we disabuse our minds of the old notion that insurance does not work, the better it will be for all of us.”

    The company’s Chief Technical Officer Folusho Alliyu expressed displeasure with the low patronage of insurance.

    According to him, Nigerians do not have enough awareness to appreciate the benefits of insurance.

    “Experience has shown that an individual who took out one policy or the other in the past but with awry experience along the line was largely due to the inability of perusing their insurance contract or policy as the case may be. Such an individual is capable of giving wrong information or misrepresentation of ideas to would-be customers out there who would have taken one policy or the other, he said.

    Alliyu stressed the need to influence the public, saying it is key to getting more patronage.

    He also stressed that practitioners should ensure that the public was sensitised to embrace insurance as an integral part of their lives, adding: ‘’We all are confronted with different kinds of risk as we go about our daily businesses.’’

  • ‘Insurance sector’s under-performance slowing GDP’

    The under-performance of the insurance sector is denying the country a yearly 1.5 per cent increment in Gross Domestic Product (GDP), the Minister of Finance, Mrs. Kemi Adeosun, has said.

    At this year’s National Insurance Conference (NIC) in Abuja, the minister said the persistent under-performance of the sector was revealed at the 2014 Insurance Summit.

    The conference theme was “Expanding National Resources and Infrastructure in Challenging Times”.

    Arguing that the industry was under-performing, compared to its pension and banking counterparts, Adeosun identified low awareness as one of the factors responsible for the sector’s under-performance, pointing out that of the 57 insurance companies in the country, less than 23 advertised their products.

    “The companies put in less than 20 adverts on television, less than 10 adverts on radio and less than 10 adverts on social media. Other factors include poor distribution channels and unethical practices among operators, she said.

    The Minister added that her ministry was working vigorously with the National Insurance Commission (NAICOM) to ensure that premium discounting is eliminated among practitioners. She also said there was need for recapitalisation of most insurance companies.

    “The first top three banks have over N3 billion capital base each, while the top three insurance companies’ capital base is between N20 and 25 million each,” she said.

    Adeosun said there was the need to immediately address the issues responsible for the under-performance of the insurance sector “because a 0. 33 per cent increase in insurance penetration can result to a growth of 0.5 per cent in GDP.” She pointed out that the increment was capable of creating over 70, 000 jobs yearly.

    The Commissioner for Insurance, Alhaji Mohammed Kari, praised the Insurance Industry Consultative Council for organising the conference to reposition the industry.

    Kari pledged NAICOM’s commitment to making the industry the next growth area for economic development.

  • CIIN: flexible FX policy boosts insurance

    CIIN: flexible FX policy boosts insurance

    The Chartered Insurance Institute of Nigeria (CIIN) yesterday said that the new flexible foreign exchange policy being championed by the Central Bank of Nigeria (CBN) will boost insurance business.

    CIIN Deputy President, Mrs. Funmi Babington-Ashaye disclosed this at a press briefing held in Lagos, said the previous policy regime have dampened the operations and security of the insurance industry.

    She also said that with the economy at the edge of recession and inflation rising daily, many corporate organisations and individuals were already cutting insurance from their needs.

    According to her, a lot of insurance companies were not been able to cede about 80 to 90 per cent of oil and gas and aviation reinsurance premium to overseas reinsurers. Mrs. Babington-Ashaye noted that but for the recent intervention of the new forex regime the inability of Nigerian insurers to cede the large risks abroad was a disaster waiting to happen.

    She said: “Usually insurance companies keep a very small proportion of large risks like oil and gas, aviation premium in this market but many of them were not been able to cede reinsurance premium to overseas reinsurers. With the new policy, we believe that forex will be available at any time to any country or individual at the rate determined by demand and supply and it should be able to resolve this problem.

    “In addition, claims have been mounting and we had to pay based on adjusted figure. The prices were going up, big claims were coming in and it was becoming an issue for us.

    CIIN President, Isioma Chukwuma, said the present economic situation of the country has hindered the commencement of construction works on the institute’s Victoria Island property.

    She said the industry will not allow the poor economic situation to deter operators from making progress, adding that the Institute has secured all relevant documents and government permits for the continuation of work at the site.

  • NAICOM uncovers insurance scams by brokers, underwriters

    NAICOM uncovers insurance scams by brokers, underwriters

    The National Insurance Commission (NAICOM) has uncovered insurance scams perpetrated by some registered, unregistered insurance brokers and underwriters in conjunction with various state governments.

    Commissioner for Insurance Mohammed Kari made this known while speaking at the 2016 Annual Chief Executive Officers Retreat of the Nigerian Council of Registered Insurance Brokers (NCRIB) held in Ilesha, Osun State. The theme was: Growing Insurance Amidst Regulations.

    Kari said these activities are illegal, criminal and punishable under the laws of the country. He warned brokers and underwriters alike to beware, adding that the Commission has beamed its searchlight on the firms. He noted that the unrepentant companies and individuals engaged in these schemes would answer for their deeds

    The commissioner lamented the increase in number of brokers that are regrettably yet to reflect on the level of insurance penetration in the country. He said: “Indeed the Nigerian Insurance market has grown in the last decades. There has also been a substantial increase in the number of players and activities; although and regrettably too this increase in the number of players especially brokers is yet to reflect on the level of insurance penetration in the country.

    “The only possible explanation for this could be that intermediaries are not creating new business neither are they expanding their operations beyond the major cities of the country and around a few clients that are already converted insurance consumers. This should be of serious concern to any right thinking professional.

    “The face of regulation has changed over the years, but the objectives and purposes have continued to be providing comfort and confidence to the consumers while at the same time developing the market.”

    He stressed that the task of market development is everybody’s, however; it is the trend to quiz the regulator why market penetration is low.

    He said penetration would continue to be low if everyone would only operate from the comfort of the metropolis or chase only existing clients with insurance policies.

    “The poor penetration of insurance in the country is no more a new statement or information. It is a position we all certainly cannot be proud of. What should be done in this ugly situation is the issue. Developing a robust insurance sector in any country requires developing a good strategy on insurance penetration.

    “While the newly formed Insurer’s Committee has set up various sub committees to look at that and more issues, the Commission is complementing those efforts by expanding its enforcement of compulsory insurance’s down to the states level. In the process we sadly found all sorts of under the table arrangements where insurance policies are being offered in conjunction with various state governments to unsuspecting public, sometimes with registered brokers and in most cases with unregistered and unlicensed entities.

    “This is Illegal, criminal and punishable under the laws of the country. Brokers and underwriters alike should beware as we have beamed our searchlight to that direction. Unrepentant companies and individuals that are engaged in these schemes would answer for their actions.

    “We have also identified the limited channels of distribution as a major inhibition factor to penetration. In this regards, we have considered the creation of additional distribution channels and have gone far on the preliminary works and draft of guidelines which would soon be exposed for input,” he added.

    Kari said it is expedient to note that prior to the recent economic challenges, pressure was building for the insurance industry to be more flexible and to approach business in a more dynamic fashion.

    He urged insurance institutions to find a way to break out of the soiled  systems which perpetuate a limited view of the customer.

    It is this view that impresses on us that we are doing well when we snatch a client from another or when we get on a long list of the brokers of a fat government client, though adding no value at all. New models of business and enterprise architecture need to arise; where integrating with newer technology solutions and effecting process improvements that leverage the capabilities of existing personnel and applications can become the norm, he added.

  • ‘New investors’ll drive insurance growth’

    prospective operators are optimistic that opening the insurance industry to new investors will spur huge growth for the insurance market.

    To this end, they are calling on the Federal Government through the National Insurance Commission (NAICOM), to open the insurance industry for more innovative and competitive market.

    The Commission had before now, said it would not issue fresh operating licences to new investors but would rather support acquisition of existing insurance companies.

    Despite this pronouncement, the Commission issued licences to investors which it deemed would add value to the industry.

    Presently, there are 19 brokerage and underwriting firms seeking to commence operation in the sector.

    Some of the concerned underwriting and brokerage investors have, however, expressed anxiety on the need to get response from the regulator on the state of their applications almost a year after applications were submitted.

    Section three of the Insurance Act 2003 states that no person shall commence or carry on any class of insurance business in Nigeria unless the insurer is registered by the commission.

    The section of the act further explains that the commission would only give approval when it was certain that it would not be against public interest or the interest of the policyholders.

    At a press briefing in Lagos, the Commissioner for Insurance, Mohammed Kari, confirmed that the commission published the names of some operators who applied for new licences last year.

    He said the idea of publication was to allow the public to make comments on those that applied.

    While the commission had approved new licences for some of them, he said some others were yet to be approved.

    Some industry analysts said that to increase insurance penetration in the country, it is important for NAICOM to intensify efforts on micro-insurance and take full initiatives to make insurance available to more Nigerians and encourage new investors to invest in insurance.

    They said the commission should consider reduction of the capital base for micro-insurance and should grant approval for licence quickly.

    According to them, development of insurance will increase employment in the sector and encourage new investors to make their contribution to insurance growth and development, which is what the sector needs now.

    One of the investors who spoke under the condition of anonymity said there are untapped potentials in the Nigerian insurance market that they can leverage on to turn the industry around. He said the Federal Government should grant keen investors regulatory approvals for take-off.

    He said: “There are opportunities especially in the retail space which holds a lot of potential for growth. The rising middle class, young population and growth of shopping malls across the country are sales spots for insurance. This requires strategic planning and innovation.

    “We are eagerly waiting for licensing from the regulator having applied for more than one year now because we cannot operate without licence.”

    The Director-General, Nigeria Insurers Association (NIA), Sunday Thomas, said the public patronage of the industry is yet to reach the desired level notwithstanding the various legislations enacted to promote patronage. He stressed that the largely untapped market creates opportunities.

    “The insurance industry in Nigeria presents a lot of growth opportunities due to the low insurance penetration.

    “Attention should be given more to the development of the retail market while waiting for corporate accounts rebound. Presently, insurance seems to have become investors delight,” he added.

  • ‘Improved security in northeast’ll enable reintroduction of insurance’

    With the improved security in the Northeast of Nigeria, it is expected that business activities will begin and insurance can be reintroduced by insurance operators, Director-General, Nigeria Insurers Association (NIA), Sunday Thomas, has said.

    Thomas, who  made the statement in Lagos, said there is a lot of work going on in the Northeast zone, and therefore urged insurers to begin to plan how they would quickly tap into the new opportunities that abound in the zone.

    He said this is the time for insurance to leverage on the ongoing development, adding that the deployment of the intervention fund by the Central Bank of Nigeria (CBN) to young entrepreneurs creates opportunity for insurance culture.

    “Public patronage of the industry is yet to reach the desired level notwithstanding the various legislations enacted to promote patronage,” he said, adding that  Inadequate enforcement of compulsory insurances, failure by the government to lead by example and underutilisation of capacity in the real sector, are major challenges of the industry.”

    Speaking about the opportunities in the industry, he said the largely untapped market creates opportunities. “The insurance industry in Nigeria presents a lot of growth opportunities due to the low insurance penetration. Attention should be given more to the development of the retail market while waiting for corporate accounts rebound, which seems to have become investors delight

    “Given the difficulty in foreign remittances, it is expected that compliance with local content laws will increase,” he added.

    He noted that notwithstanding the adverse macroeconomic environment, premiums continued to register growth in many countries, particularly in emerging market economies, the Organisation for Economic Cooperation and Development (OECD).

    He said that according to IMF’s world economic outlook projections, Nigeria is expected to grow at a faster rate than the average emerging market and developing economies growth of rate of 5.3 per cent.

    The Nigerian population should be an asset that can be leveraged on to develop any sector of the economy including insurance, he added.

  • Access Bank advocates insurance for economic growth

    Access Bank advocates insurance for economic growth

    • Insurers urged to recapitalise

    The Group Managing Director of Access Bank Plc, Mr. Herbert Wigwe, has said that Nigeria cannot grow without having a strong insurance industry as backbone. To achieve this, Access Bank, Wigwe said, is ready to partner with insurers to showcase insurance to Nigerians and espouse its relevance to national development.

    Wigwe, who spoke at an insurance forum organised by the bank for stakeholders in the insurance industry, noted that to achieve this, insurance firms would need to embrace merger and acquisitions as this will position them to recapitalise, thereby becoming stronger to take on mega businesses in the country.

    The forum with the theme: “Harnessing Economic Realities with Opportunities for Growth in the Insurance Industry” and sub theme: “Key Issues that affect the Nigerian Insurance Industry,” according to Wigwe,  was aimed at tinkering with the possibility of banks partnering with insurers to further grow the economy.

    “Insurance has a broader outlet but there are several issues hindering the growth of the industry. About 20 years ago, it used to have international players from America and Britain who had depth of skills. They set up reinsurance offshore and so the industry inherited these skills from them.

    “But the fact that people did not pay attention to insurance left a situation where those skills took the back stage. The world over, insurance companies owned banks, and not the other way round. There is need to build strong companies in Nigeria that can manage risk a lot better and provide long term money. This way sector like telecommunication, housing, etc and basically develop infrastructure.”

    Director-General, Nigeria Insurers Association (NIA), Sunday Thomas on his part said for insurers to thrive and excel in 2016, they will need to place customers at the centre of their business plans and strategies

    “They also need to review our products, policies and processes to ensure that they are relevant to customers’ needs. We must begin to build capacity in retail businesses. We must deliver on the promises through simplified claims processes that will leverage on the use of cutting edge technology.

    “For the  sustainability of the industry, the market must continue to enhance the way it is valued by the consumers and other stakeholders. The industry must step up its consumer education and public awareness of the vital importance of insurance as a social and economic transformation mechanism.

    “Insurance industry will need to keep developing innovative solutions required by consumers to manage risks in an increasingly complex and uncertain environment, price based competition cannot drive growth and sustain the market and therefore must change. There must be high level deployment of technology which  will ensure efficiency needed to ensure sustainable growth while the availability of key talents is crucial to the survival and success of the insurance industry,” he said.

  • Insurance veteran Yinka Lijadu dies at 82

    Insurance veteran Yinka Lijadu dies at 82

    The insurance industry has lost another veteran with the death of Mr Yinka Lijadu, former Managing Director of NICON Insurance and past president of the Chartered Insurance Institute of Nigeria (CIIN).

    He was also chairman of the Nigerian Insurers Association (NIA) and the Institute of Loss Adjusters Association of Nigeria (ILAN).

    A statement signed by Assistant Executive Secretary, Nigerian Council of Registered Insurance Brokers, Tope Adaramola, said the late Lijadu was sick for a while.

    According to him, NICON Insurance Corporation was the flagship of the Nigerian industry and a delightful place to work while Lijadu held sway.

    He said: “Under him, NICON built several octopus of business institutions such as the NICON Noga Hilton Hotel, Abuja which has now transfigured to Transcorp Hilton Hotel, as well as the defunct Nigerian Acceptances Limited (NAL) Merchant Bank.

    “On behalf of the Federal Government, Lijadu also pioneered National Properties Limited and the Nigerian Agricultural Insurance Agency, among others. Lijadu demonstrated through his leadership of NICON the belief that the insurance industry could really be the desired fountain for the conception and establishment of other business institutions as obtainable in other advanced economies.

    “It was reliably gathered that at retirement, he never had a house or any obvious material possession that befitted the life of a man who bestrode the nation’s then nascent economy, especially in a society like ours where warped value system has made such life style abnormal.”

    Born on April 2, 1934 at Abeokuta, Ogun State, Lijadu had his primary education at Christ Cathedral and Saints Peters Schools and his secondary education at CMS Grammar School and Kings College all in Lagos. He later won a scholarship in 1960 to study Insurance at the Holborn College of Law, Languages and Commerce, and bagged the Associateship of the Chartered Insurance Institute, London  with specialisation in fire insurance in 1963.

  • Insurance penetration ‘ll grow, says NAICOM chief

    Insurance penetration ‘ll grow, says NAICOM chief

    The National Insurance Commission (NAICOM) expects to deepen insurance penetration in the country within the next 12 weeks, Commissioner for Insurance, Mohammed Kari has said.

    Speaking with reporters in Ogun State, he said the Commission intends to achieve this by working in a different way to enforce compulsory insurance products especially the Buildings under Construction Insurance law.

    According to him, there are six insurance products made compulsory by law by the Insurance Act 2003 and other sister legislations which the Commission has been working to enforce.

    He said: “They are Group life Insurance in line with the PenCom Act 2004, Employers liability in line with the Workmen’s Compensation Act 1987, Buildings under Construction-section 64 of the Insurance Act 2003, Occupiers Liability Insurance –section 65 of the Insurance Act 2003, Motor Third party Insurance –section 68of the Insurance Act 2003, Health Care Professional Indemnity Insurance-under section 45 of the NHIS Act 1999

    “NAICOM set up enforcement teams in all the 36 states of the federation to monitor compliance with the compulsory insurances. The teams would comprise of the Police, Vehicle Inspection Office (VIO), Federal Road Safety commission (FRSC), Fire Service, planning authorities, Nigeria Insurers Association (NIA), Nigeria Council of Registered Insurance Brokers (NCRIB) among others.”

    He noted that the teams were constituted but the Commission has since been working to keep the law enforcement agencies on board.

    He said they have however, identified how to ensure successful enforcement of compulsory insurance products, which will in turn deepen insurance penetration.

    To this end, he said the Commission is now working with the Federal and State Government to ensure proper enforcement.

    He pointed out that despite the fact that Lagos State had implemented the Buildings under Construction Insurance law, the implementation has been faulty.

    “Buildings under Construction is one of the compulsory insurances. The Governor of Ogun State, Ibikunle Amosun agreed with us that it has been an issue in the state but he promised us that they will abide by this law going forward.

    “We have a law In Lagos that compels every business to insure. The implementation has also been faulty. The implementation of that is not a NAICOM responsibility like most of the implementation of the sections of the law but we are now working with state and Federal Government to see how we can ensure enforcement of this compulsory insurance policy.

    “We are working on how to resolve this issue and very soon there will be a clear difference in enforcement of insurance in Nigeria. I promise you the game will totally change. And as we go from state to state to sensitize governments and to show them how insurance can help their economy, create employment and how we can together with them enforce insurance. I assure you we expect a huge deepening of penetration of insurance within the next 12 weeks,” he said.