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Tag: Insurers

  • Insurers to pay N3m licensing fee for Bancassurance

    Insurers to pay N3m licensing fee for Bancassurance

    •NAICOM orders training for desk officers 

    Insurance firms have been authorised to sell insurance products in banks through the Bancassurance Referral Distribution Model with an application and licensing fee of N500, 000 and N2.5 million from April 1.
    This was made known by Commissioner for Insurance, National Insurance Commission (NAICOM), Mohammed Kari at the Maiden Bancassurance Certification Workshop held at the College of Insurance and Financial Management (CIFM), Asese town on the Lagos/Ibadan Expressway.
    Speaking on the guidelines by the Commission and the Central Bank of Nigeria (CBN), the Commissioner who was represented by the Director, Authorisation and Policy, Mr Pius Agboola, said that insurance companies are to pay renewal fees of N1 million.
    Bancassurance is the collaboration between a bank and an insurance company to market insurance products to the customers of the bank.
    The commissioner, however, said that a training on bancassurance mandatory course for 12 and 18 hours is binding on employees of an insurance company that aims to act as bancassurance manager or desk officer.
    He stressed that the training was aimed at equipping the operators of the bancassurance scheme with the requisite knowledge needed for seamless bancassurance operations.
    He added that the training was to ensure that those representing the partner insurer were competent.
    He said the Commission believes in the ability of the CIFMS to give competent training and certification that would be sufficient for any employee occupying this position alongside other qualifications stated in the guidelines”
    Agboola at the training explained to the participants that Bancassurance referral service shall be by referring to the Insurer, bank customer that require insurance services and products while establishing a Bancassurance referral operation might also be by way of locating a Bancassurance Desk in the banking hall of the Referral Bank.
    He said the insurer shall maintain a Bancassurance relation with not more than two referral banks at any one time and vice versa.
    On restrictions and conducts, he noted that the insurer approved to partner with a referral bank shall not engage the referral bank in any form of marketing, sales or services other than referral only.
    He said: “The insurer shall make known to the customers so referred that the insurer will wholly be liable for underwriting of the risks, assessment, adjustment and payment of claims that may arise from the risk covered; not use any advertisement or promotion that would make people to mistakenly believe that the Referral Bank stands behind or guarantees any return on the Insurance Products; not pay compensation to any individual for the referral of a customer where such a person is not an approved referral bank; not fail to disclose in writing to the Customer that the insurance policy to be sold is not a cash deposit; not insured by the Nigeria Deposit Insurance Company (NDIC) and not guaranteed by the CBN.
    “The insurer shall not enter into a referral arrangement with more than two referral bank; not fail to keep distinct and separate, the records relating to Bancassurance transactions and that, such records are to be made available to NAICOM as and when required; and not made any payment to the referral bank by whatever name called (fees, charges, etc.) over and above the approved referral Commission; and not pay fees or commission for the insurance of a policyholder that is not a referral client on the referral client list maintained in the insurer records.
    “Other restrictions include that the insurer shall ensure that all prospective clients are allowed to decide out of their own volition, which insurance product they wish to buy and from which insurance company; not fail to open and maintain a dedicated premium/operational account for the purpose of capturing bancassurance (referral) transactions; maintain a standstill period of one year for an account/business that have an existing intermediary before a change to Bancassurance referral is uphold.”
    The Rector, Dr. Yeside Otetayo further said the college has been appointed as the certifying body of the principal officers in the Bancassurance business.
    “The commission has confidence in the college knowing that it has the capacity to certify and develop human capital within that segment of the market. The Commissioner has kicked off the maiden edition.
    “At the end of each workshop, we are going to have an assessment so it is not an automatic certification taken workshop. After the end of the sessions, we will have an assessment to judge the knowledge of the participants as regards what they have learnt from the workshop. It is after they have passed that assessment that we issue them a certificate.’’

  • Minister to insurers: leverage ICT penetration to grow insurance

    Minister to insurers: leverage ICT penetration to grow insurance

    The Minister of Communications, Adebayo Shittu has urged insurers to latch on the penetration of information communication technology (ICT) penetration to deepen insurance penetration in the country and grow its contribution to the national gross domestic product (GDP).

    He lamented that the potential of the insurance industry is still far from being harnessed. Speaking on: ‘Driving Insurance Penetration With Information and Communication   Technology’ at the e-Insurance Conference organised by Pinet Informatics Ltd at the Sheraton Hotels and Towers, Lagos yesterday, he said the contributions of the insurance sector, which provides support to the financial institutions, has been disproportionate to the size of the Nigerian population and size.

    “The insurance sector, despite being a major driver of business growth that provides critical support systems to the financial market, has not fared well given the current size of the economy and population.

    “Information available to me indicates that there are less than 1.5 million insurance policyholders, representing a paltry 0.9 per cent of a population of well over 170 million citizens. Similarly, the gross premium of the sector is said to be less than N500 billion, implying that the sector contributes less than one per cent to national GDP,” he said.

    He expressed confidence in the performance of the ICT sector as the fourth pillar of the economy and a sector that recorded positive growth last year in spite of the recession. He said ICT tools could be used to develop innovative solutions to improve insurance practice, increase product development and expand market activities in the insurance sector.

    The suggested process, according to the minister, includes improved operational efficiency(including smooth communication between clients and company officials), office automation and optimisation, digital marketing and online marketplace for assessment and purchase of insurance packages.

    Shittu said in other parts of the world, e-insurance has already been fully adopted and various insurance products can be obtained through online insurance portals, which are programmed to tailor unique insurance packages to the distinctive individual requirements of prospective customers.

  • ‘Macro-economic conditions reduce insurers’ net value’

    The macro-economic condition of the country has affected the ultimate net value of whatever insurers were able to achieve last year, Managing Director, Mutual Benefit Insurance Plc, Segun Omosehin has said.
    Speaking with reporters in Lagos, he said: ‘’The recent devaluation in the value of the naira to the dollar majorly affected our network.’’
    He stressed that despite the strides made by the company, the vagaries of the macro-economic conditions have taken tolls on the fortunes of the industry.
    He however, said going by the 2017 growth projections of the International Monetary Fund (IMF) and the World Bank of one to 1.15 per cent, he is positive that business will get better in the course of the year.
    According to him, there are serious indications that the government is committed to arresting the recession based on the funds allocated to power; infrastructure, housing, and the transportation sector in the 2017 budget. The fund that was allocated to power; infrastructure, housing and the transportation sector showed the areas that will directly impact on the economy because anything invested on infrastructure will directly impact on the economy.
    He said:’’The macroeconomic conditions of the country in 2016 affected insurance business. This is because we do not operate in isolation but within the larger economy. The recent devaluation of the naira to the dollar affected our network.
    “For in Mutual Benefit, when we converted what we did relative to the dollar in 2016, we realised that we did much worse than the previous year because of the exchange rate. “This in a way affected our balance sheet because we had one of our particular portfolio denominated in U.S dollars.
    “So it’s a performance I’ll say we were proud of but for the vagaries of the macro-economic conditions of the country it affected the ultimate net value of whatever we’ve been able to achieve. But there have been a whole lot of predictions as to what the economy will look like this year. A number of experts have all predicted that there will be between one and 1.5 per cent growth in our national output.”
    Speaking on the hope the insurance industry has in the economy this year, he said: “The World Bank has predicted one per cent growth in our national output. These are outlook that we have used in doing our bench mark as to what we want to do for the year. “We are positive that hopefully with all that we have seen within the fourth quarter of 2016, the economy will improve and insurance business will also receive a boost.”
    He lauded government’s decision to dedicate funds for social welfare by giving direct cash to the less privileged.
    He also warned that government should continue to work to forestall disruptions from the oil sector.
    Omosehin said: “The government has also put certain amount for social welfare by giving direct cash to the less privileged Nigerians and micro credit schemes that were set up. Above that, they also agreed that about 52 per cent deficit in the budget amounting to about N1.3 trillion that is going to finance some of its projects will be sourced locally.
    ‘’This will have direct impact on activities within the economy and these are areas for companies like ours that are majorly concerned with covering risk associated with economic activities in the system to grow. I believe the industry has a brighter prospect this year given these parameters.
    “But any disruption in the flow of income from the oil sector is likely to have direct impact on the economy and that is why we need to look at how well and what machineries can we use to manage the Niger Delta crisis.
    “I am optimistic because the vice president recently led a delegation to that region to look at a more pragmatic approach rather than an Abuja political decision that will not have direct impact to what is going on in the region. This development gives us some comfort because for the first time, some people are really looking at the real issues and looking at how well we can, as a country, manage our own crisis without foreign interference.”

  • NIA prepares insurers for risk-based supervision

    In preparation for the implementation of risk-based supervision by the National Insurance Commission (NAICOM), the Nigeria Insurers Association (NIA) is planning a workshop to build capacity and enhance insurers’ understanding of the concept.

    This was made known by the NIA Chairman, Eddie Efekoha at a workshop on risk-based supervision in Lagos.

    Efekoha said NAICOM had begun consultations to build consensus among insurance players, noting that this is commendable.

    According to him, Alexander Forbes was at the workshop and has contributed to the development of the Nigerian insurance market and most importantly, the enhancement of the skills and competencies of NIA members in the area of risk based supervision and by extension, risk based capital.

    He said: “Risk-Based Supervision (RBS) is gradually becoming the dominant approach to regulatory supervision of financial institutions around the world. It is a comprehensive, formally structured system that assesses risks within the financial system, giving priority to the resolution of those risks.

    “Often contrasted with rules-based regulation, it is also known as principles or compliance-based supervision;  a method of regulation which involves checking for and enforcing compliance with rules and legislation, regulations or policies that apply to an entity. RBS has a regulatory emphasis of focusing on what matters,  assessing the degree of risk in the company’s business operations and determining how to reduce the risk as required.

    “With RBS, entities are always being monitored both for compliance with the rules and for how they approach risk management. This programme is intended to address some of the key issues that will help improve our understanding of the subject matter of discussion,” he said.

  • Insurers kick against financial bidding

    Insurers kick against financial bidding

    •Postpones rebranding project

    Insurers Committee, the body that decides policies and issues in the industry, has agreed to move against financial bidding of insurance business.

    The committee comprises the National Insurance Commission (NAICOM) and chief executive officers of insurance firms.

    Briefing reporters after the Sixth Insurers Committee meeting in Lagos, the Vice Chairman, Sub-Committee on Publicity, Mrs. EbelechukwuNwachukwu, said it was not proper for organisations to ask for bidding fees from insurance companies.

    He said the issue of insurance companies participating in financial bidding was sensitive  and that it formed their major discourse at the meeting, adding that the committee has postponed the industry rebranding project next January.

    She also said the regulatory body, the National Insurance Commission (NAICOM), had released the draft roadmap of the industry’s risk base supervision for insurance operators to make their recommendations.

    According to her, the draft was unveiled by the Commissioner for Insurance, Mohammed Kari, at the meeting giving the operators one month period to critically examine the draft and inject their contributions.

    She said risk base supervision would enable insurance undertake risks in line with their financial capability.

    “We discussed the issue of financial bidding of insurance business and without mentioning any organisation. We feel that it is not proper for them to ask for bidding fees from insurance companies.

    “It was a very sensitive discussion and it took quite an extensive time discussing it. When you talk about financial biding, different organisations with different policies have their ways. Some may just decide that they want to take a particular circle but what we eventually agreed is that we should come together as an association to promote the interest of the industry.

    “Some of us brought up the issue that if an organisation decides to bid and the regulator threatens to penalise the person for doing a financial bidding, how does the organisation sue the regulator for doing that because the insurance company is licensed to conduct business. We also looked at financial bid, and asked ourselves that should it be a quarterly amount or something substantial and that is how we came about to say we should totally abstain from it. So, whoever requires it will know that the industry is speaking with one voice and that was where the argument ended,” he said.

    Head, Corporate Affairs, National Insurance Commission (NAICOM), Rasaaq Salami, who spoke on the suspension of the rebranding project from October 1, this year to next January, said the suspension was due to the committee’s inability to fund the budget.

    Salami explained that the committee would use the extension period to get the funds together before starting the campaign.

    “We informed you at the last Insurers Committee that the rebranding campaign would take off on October 1 but because of the budget constraint we have encountered, it has been postponed to early next year 2017.

    “The committee discovered that they need to include the fund required in their respective organisation budget and postponing the project will allow them to do so. It will also enable the committee to use the period to get the funds together before we start the campaign so that we don’t get stuck at the middle,” he said.

     

  • Insurers ‘need to redeem poor image’

    Insurers ‘need to redeem poor image’

    Insurance operators need to redeem the industry’s poor image to enable them maximise the untapped potential in the economy, Ogun State Governor Ibikunle Amosun has said.

    The governor, represented by his Deputy, Mrs. Yetunde Onanuga, made this known while declaring open the  Insurance Professionals’ Forum organised by the Chartered Insurance Institute of Nigeria (CIIN) in Abeokuta, the Ogun State capital.

    He stated that the theme of this year’s forum: The insurance industry, national economic shift & new business realities, could not have been more apt, as there were more than ever before in the history of the nation, the need for diversification of the economy.

    He said insurance firms should make maximum use of the investment opportunities available to them to strengthen their liquidity position to enable them meet the claims of policyholders, companies whenever the need arises.

    He stressed that such effort would help restore public confidence in the ability of the industry to deliver and redeem its obligations to clients.

    He observed that many Nigerians were yet to embrace the culture of patronising insurance firms, hence, the need for the Institute to engage in public education and enlightenments programmes that would enlist the interest of the people in the business.

    He called on the operators to extend some of their programmes to the rural areas, to enable them tap the potentials at the grassroots.

    He said: “There is the need too for insurance companies to redesign their products and services in such a way that would meet the need in the ever changing behavioural pattern of our people. In doing so, concerted efforts should be made to ensure that the economic environment and social behaviour of our people are integrated into the policy formulation and marketing strategy objective of the insurance companies.

    “Another area which the insurance industry is yet to fully explore is the life policy and pension insurance scheme. This can really make long term funds available for profitable investment in the insurance sector. It seemed to me that lack of insurance life portfolio has made our insurance companies to be caught in the web of low investments and needless competitions with other actors in the money market”.

    Speaking on diversification, the Governor said it had dawned on everybody of the need to diversify the economy to the non-oil sector and as major players, insurance professionals must come up with robust ideas and policies that could help cushion the fall in revenue in the economic process.

    “Undoubtedly, as the call for the diversification of the economy is on the increase, and investors are being wooed to invest in agriculture, mining, export promotion, among others, this gathering through robust deliberations, must come up with possible template that would not only assure investors of the safety of their investment, but that would ensure them of insurance driven environment which will bring high yields on their investments.

    “Without doubt, the prevailing social economic situation in our economy requires that the Institute should attempt a critical reappraisal of some of the contemporary issues in the professional practice of insurance business in order to promote the industry,” he said.

    Commissioner for Insurance, Mohammed Kari, urged insurance professionals to act professionally, adding that failure to observe this tenet in the past caused the industry so much injury.

    “The time has indeed come for us to speak professionally and act like the true insurance professionals we claim to be in the course of performing or conducting our business. Our failure to observe this tenet in the past has caused the industry so much reputational injury. I am glad to say the current efforts of the underwriters to change the perception of the public about insurance are timely and laudable. All other sectors should join in with their widow’s might to ensure the success of the project,” he said.

    CIIN President, Lady Isioma Chukwu, urged insurance professionals to key into the vision of the government’s economic diversification activities and position the industry appropriately.

  • NAICOM to insurers: provide financial status before recapitalisation

    NAICOM to insurers: provide financial status before recapitalisation

    The National Insurance Commission (NAICOM) has asked the 59 insurance firms in the country to report the capital needs of their businesses in a financial condition report in preparation for recapitalisation.

    The commission said it was necessary to determine regulatory capital that would be appropriate for the firms, which comprises Life, Non-Life and Composite, to hold sufficient capital to cover their risk and liabilities when they arise.

    Commissioner for Insurance, Mohammed Kari, in an interaction with reporters in Lagos said the commission expects the report from the firms while it prepares a guideline that would be released in due course.

    Kari said since the Minister of Finance, Mrs. Kemi Adeosun, made a statement at the last Insurance Industry Consultative Conference ( IICC), the Commission has been inundated with requests to clarify what she meant by her statement which read “would need to recapitalise.”

    He said: “But I ask, what is there to clarify? However, there is nothing to panic about. It is the expectation of any business to have adequate capital to meet its liabilities.

    “This is more so in insurance business that has a time frame for companies to settle their claims. We have quite a number of companies that have either eroded capital base or have miss-matched their assets or liabilities cover, mostly arising from wrong investment decisions. Our concern is for the firms to hold sufficient capital to cover their risks and liabilities when they arise at all times. This is very crucial in turbulent times like the ones we are currently going through.

    “While we are going to develop a full risk based capital framework, we will be expecting companies to initiate the appropriate capital adequacy reviews and have their actuary report the capital needs of their business in a financial condition report.

    “A guideline would be released in due course. It is important for all insurers and reinsurers to get used to voluntarily holding capital that would protect policy holders against adverse outcomes that could negatively affect their ability to meet their obligations. Those in the annuity business can easily relate to this statement because of their experience in 2015.”

  • Insurers to cut overheads

    • Commence industry rebranding Oct.1

    The insurance industry is working out measures to reduce its cost burden, Chairman, Sub-committee Publicity and Communications, Insurers Committee, Hassan Oye-Odukale, has said.

    He made this known during a press parley after the committee’s meeting at NEM Insurance Plc headquarters in Lagos.

    The industry, he said, hopes to achieve the feat through the use of Information Technology, adding that the industry is working with the Nigeria Interbank Settlement System (NIBSS) on the project.

    Oye-Odukale maintained that officers of NIBSS had made a presentation to the committee, which the committee was happy about. He said the committee had mandated its information subcommittee to examine the initiative and advise the general body.

    Vice Chairman, Sub Committee Publicity, Eberechukwu Nwanchukwu, said the committee was also working on improving customers’ relations, stressing that the committee believed the rebranding initiative being worked on by the industry could only be successful when customers are treated with high esteem.

    Meanwhile, insurers have said they are prepared to start the rebranding of the insurance industry from October 1, this year.

    According to Nwanchuku, insurers multi-million rebranding campaign, which will soon takeoff, will be driven through radio and social media channels.

    She said getting the youth to embrace insurance would be the core mandate of the campaign, adding that operators hope to take the campaign to schools to enable them educate pupils on the need for insurance.

    She also noted that the operators are eying the highly mobile individuals who need insurance to secure their future.

  • Insurers: recession takes toll on premium, profit, others

    Hard times have hit the insurance industry as premium income has gone down, whilst claims cost and operational expenses have risen astronomically, thus taking its toll on margins, the Chairman, Nigeria Insurers Association (NIA), Eddie Efekoha, has said.

    Efekoha, who spoke at his investiture ceremony in Lagos, lamented that the performance of most insurance stocks on the Nigerian Stock Exchange (NSE) has been so flat that financial analysts have stopped including most insurance companies in their forecasts.

    He said generally, businesses are facing greater threats principally as a result of dwindling revenues, poor infrastructure, lack of power, inflationary trends in all sectors occasioned by the decline in the value of the naira. He listed insecurity amongst  other challenges as impediments facing insurers, adding that importation and local manufacturing are currently at low ebb.

    He said the insurance sector was directly impacted by these disruptions, adding that these times demands internal cohesion and collaborative action. “It therefore behoves on all of us as industry players to respond quickly to the changing dynamics of the market space so that we can remain relevant and bestow a worthy legacy to the future generation of insurers,” he advised.

    He said it was in the light of these developments in the local market that he decided to commit his chairmanship to address the theme-Sustainable Market Development Through Stakeholder Engagement.

    He said: “Essentially, all the programmes we will be executing will find space under this central theme. Very often, insurance as an instrument for financial intermediation is misunderstood by policy makers; it is therefore necessary to enter into constructive engagement with relevant stakeholders. This will include the need to share knowledge with judicial officers–magistrates and judges on the workings of insurance business and to fully equip them to be able to respond adequately to the rising cases of fraudulent claims in the market, among other adjudication issues.

    “We will engage with the legislators in the process of making laws that affect the economy at large and insurance industry in particular.  They are major stakeholders whose support the industry would require at all times. The various bills before the National Assembly require concerted efforts to push through the industry position. It is only with the active engagement with the lawmakers that the industry can protect its business interests.

    “On tax matters, we are all witnesses to the lingering issue of the heavy tax burden imposed on the insurance industry by CITA 2007. This further strengthens the need for us as an association to continually engage with the tax authorities with a view to amicably resolving all the issues and avoiding areas of future conflict.”

  • Insurers Committee to rebrand industry

    The Insurers Committee is to rebrand the industry to enable members enjoy its benefits,  its Vice Chairman Sub Committee Publicity, Mrs Ebelechukwu Nwachukwu, has said.

    Mrs Nwachukwu, also the Managing Director of Zenith Insurance, made this known at a briefing after the third Insurers Committee session over the weekend in Lagos.

    According to her, the rebranding will deepen insurance penetration and ensure better service delivery.

    She said: “We want the insuring public to be informed on why they should not see it as unnecessary but a tool that can help them do other things. We believe that the industry rebranding will help to increase awareness, thereby making more people take up insurance.

    “The committee has appointed a specialist and consultant to work around the rebranding programme. We are also working towards standardising our practice for better practice of Insurance.”

    On risk based supervision, she said the road map and draft was ready and would be exposed to industry operators next month for their suggestions and impute before the final guidelines will be ready follow by implementation.