Thursday, 31 October 2013

'Bad apple' insurers are upsetting President Obama due to canceled policies

By Ryan GambleHYPERLINK "/headlines-in-spokane/ryan-gamble"

"Bad apple" insurers have canceled health care policies and President Obama is upset about it. That is the claim from the White House as thousands of Americans have begun to lose coverage recently. According to a report from late Wednesday (Oct. 30), it is those insurance companies that he is blaming and not the new health care law that he has helped to put in place.

The president has had to address a lot of harsh criticism about the plan recently, especially because the web site to get people signed up for new plans has not worked well. This has just fueled the fire that the other side of the aisle is stoking, especially as so many Americans get left without health care or a remedy for getting dropped by their original policy carriers.

Weighing in on the situation and all the canceled policies, President Obama stated, "Just shop around in the new marketplace. You're going to get a better deal. Remember, before the Affordable Care Act, these bad-apple insurers had free rein every single year to limit the care that you received, or used minor pre-existing conditions to jack up your premiums, or bill you into bankruptcy."

He has coined a new term in regard to the companies and it has become quite buzzworthy on the internet. With so many people becoming disappointed or disheartened by what the Affordable Care Act is doing, President Obama has seen his popularity numbers drop even further. It is the same for his approval ratings, so he really needs to make sure the health care reform gets done.

Source: Examiner

St Jude storm could cost British insurance industry up to £500m

By James Waterson

MONDAY’S storms could cost British insurers up to £500m in claims, a leading broker claimed yesterday.

Willis Re said the figure only covered damaged caused in the UK. The storm has since caused extensive damage across France, the Netherlands and Scandinavia.

"Based on our research we believe insured losses in the UK for the St Jude’s Day storm to be in the region of £300m-£500m," said Willis Re’s Tim Edwards.

"Losses from the storm were concentrated predominantly in the south of England, with significant damage coming from fallen trees – which were heavily laden with leaves because of the time of year, fallen tiles and smashed windows."

He said overall losses were equivalent to Windstorm Kyrill, which hit the UK and caused extensive damage in January 2007.

Analysts at Oriel Securities had earlier warned that the storms were unlikely to add more than one or two percentage points to combined operating ratios – the standard measure of profitability in the insurance industry.

"UK insurers likely to be impacted are Aviva, Direct Line, esure, L&G and RSA," said analyst Hari Sivakumaran, who pointed out that long-term forecasts had allowed ample time for precautions.

Source: CityAM

Insurance operators express confidence in NCRIB boss

From left: President Nigerian Council of Registered Insurance Brokers (NCRIB),  Ayodapo Shoderu and Chairman Lagos Area Committee Patrick Ikponmwosa during the courtesy call of the former to the Area Committee in Lagos.

Chuks Udo Okonta

Major operators in the Nigerian insurance industry have expressed confidence in the ability of the new President of the Nigerian Council of Registered Insurance Brokers (NCRIB) Ayodapo Shoderu to take insurance broking to greater heights.

The expression came from a cross section of underwriters and brokers who constitute the critical segment of the industry.

Speaking during a valedictory visit of the immediate past President of the Council, Mrs Laide Osijo to the Nigerian Insurers Association (NIA), in Lagos, recently, Deputy Chairman of the Association, Godwin Wiggle, noted that there was hope that the chains of accomplishments recorded by the council will be sustained under the new president considering his robust professional pedigree and integrity.

According to wiggle, Shoderu had been a renowned figure in the insurance broking sector whose experience and integrity was responsible for building Man mountain and Co. Ltd, that today ranks as one of the foremost insurance broking firms in Nigeria.

He promised that the NIA will continue to collaborate with the Council under the new President to ensure a robust insurance sector.

 Similarly, the President of the Chartered Insurance Institute Fatai Lawal, described Shoderu as one of the respected icons in the insurance industry who has horned  his over 35 years insurance experience both in Nigeria and the. United Kingdom.

Lawal was optimistic that the industry was on the threshold of better collaboration and development.

Underscoring his resolve to sustain intra industry collaboration in his inaugural speech, Shoderu identified synergy with relevant institutions as one of his major thrusts of office.

 "Since no professional body could operate in isolation, my administration will open new vista of relationship with relevant insurance institutions, both within and outside the country.” I like to affirm that the. Council's cordial relationship with the National Insurance Commission (NAICOM) and other bodies like the CIIN, ILAN and NIA is non-negotiable," he said. 

Wednesday, 30 October 2013

Sovereign Trust Insurance grosses N7.7bn

·         Holds AGM Nov. 15

Chuks Udo Okonta

The Managing Director Sovereign Trust Insurance Plc, Wale Onaolapo, has said the company generated a gross premium of N7.7 billion last year, as against N6.4 billion in 2011.

He noted that the firm’s Profit Before Tax, (PBT), grew from N513 million in 2011 to N1.58 billion last year, while the total assets stood at N7.1 billion at the end of the financial year as against N6.1 billion in 2011.

Onaolapo in a statement reiterated the company’s unwavering commitment to creating value to both Shareholders and Stakeholders alike.

He said the firm having met all the stipulated requirements outlined by the National Insurance Commission (NAICOM) in line with the new International Financial Reporting Standard (IFRS), coupled with the approval from the Nigerian Stock Exchange (NSE), is now set to host the 18th Edition of its Annual General Meeting (AGM) slated for November 15, 2013, at the Grand Banquet Hall of the Civic Centre, Lagos by 11am. 

He said: “The path through the adoption of the International Financial Reporting Standard was not without its challenges but with the perseverance and doggedness of every member of staff, we were able to overcome and succeed as a team.

“Amidst all these, our 2012 performance is quite commendable. Although, we would have loved to achieve more, but we are grateful for all that we were able to accomplish in the previous year.  

He noted that the underwriting firm will continue to deliver on all promises made and live up to actualising its vision of “becoming the leading brand providing insurance and financial services of global standards” in no distant time.

The company’s Spokesperson and Head, Corporate Communications and Brand Management, Segun Bankole, said: “The journey to getting the 2012 Accounts of the company approved by the Industry’s primary Regulatory Authority has been quite an experience and there is every reason to be thankful for a successful outcome at the end of the day.”

 He said the lessons learnt from the whole process cannot be undermined just as the company is committed to operating under very ethical and professional standards as far as the Industry is concerned. While thanking the numerous Shareholders for their support and understanding during the approval period, he also solicited for the continued patronage of its esteemed customers in the years ahead.

Bankole maintained that despite the challenges in the market during the year under review, the company in its usual stride of wanting to create exceptional value for its teeming shareholders upheld an upward growth in the performance of its 2012 result when compared to 2011.


Why passage of new insurance law is delayed NAICOM

Chuks Udo Okonta


The delay in the passage of the new insurance law which started in 2009 was as a result of some hiccups at the ministry of finance following changes in leadership, the Commissioner for Insurance Fola Daniel, has said.

He disclosed this in Lagos, stating that all necessary actions have been done to enable the bill sail through the National Assembly.

He said: “Since 2009, when we started this, we have had about four ministers and of course no minister will rush a new Bill to the federal executive council without first of all trying to understand the integrity of the Bill.

“Happily, we have dotted all the i’s and crossed all the t’s; and it’s been presented to the Federal Executive Council and there was a huge understanding. We have also had retreat with various committees of the National Assembly concerned with oversight function on insurance and we are hopeful it will have a smooth ride at the legislature.

Daniel had earlier told Inspen that the proposed law will support the commission’s developmental efforts, adding that the commission in the past years has adopted developmental strategy instead of regulatory.

He noted that the law was fashioned to support government’s quest for job creation, adding that the executive is eager to ensure that insurance occupies its rightful place.

“The law that is in the offing will support our developmental efforts. It will also create jobs. One of the cardinal policies of the present administration is to create jobs – reduce unemployment and restiveness in the society.

“Graduates who are not employed may be available for mischief. We believe that any new law that is fashioned that does not support President Gooluck Jonathan’s quest to create employment and reduce poverty is not a good one. The proposed bill has been done in a way to support the government’s quest to reduce poverty in the economy.

“The relevant committee of the National Assembly that has oversight function on insurance is very eager to do anything to support insurance growth and development. And if one of the tools to ensure rapid development is the review of the law, they have assured us that as soon as they see the bill, they would do what is needful to ensure that there is no unnecessary delay; and I believe them. That is why I said we are lucky. The executive is eager to ensure that insurance occupies its rightful place. The legislators are very willing and waiting to support the growth of insurance in our environment,” he said.


Electronic cigarettes: will they make life insurance cheaper?

The wave of smokers switching from tobacco to arguably safer 'e-cigarettes' raises questions about the pricing of insurance and annuities

By Richard Dyson

A 10-a-day smoker who quits tobacco-filled cigarettes and switches to "electronic" versions already stands to save more than £1,000 a year.

But they might also qualify for a 40pc reduction in life and health insurance premiums – if the wider industry follows the example of one insurer and agrees to treat "e-cig" users as "non-smokers".

The rapid take-up of electronic cigarettes, which are tobacco-free and involve inhaling small quantities of vaporised nicotine, has taken governments and health authorities by surprise. There are already more than a million users in Britain. Many shops, including supermarkets, stock the devices. But the trend has not been properly addressed by the insurance industry – even though smoking remains one of the biggest factors in determining the price of cover.

A specialist insurance broker has focused attention on the matter by successfully arranging life cover, at non-smoking rates, for a number of clients who use only e-cigarettes. The insurer involved, which is one of Britain’s biggest, was made aware of their e-cig habit.

The broker, Harvey Sutton of Manchester-based Suttons Independent Financial Advisers, said: "All insurers ask questions about tobacco use and many, but not all, ask specific questions about nicotine. We sought situations where e-cig users could honestly answer questions relating to their use of tobacco products. Electronic cigarettes are not tobacco products. We spoke to the underwriters in question: we are not doing this without underwriters’ knowledge."

Although Mr Sutton successfully obtained policies for a number of clients, by the end of last week doubts had emerged as to whether much more cover would be provided on the same basis. This is because reinsurers – who underwrite the insurers – have not resolved their position on the issue.

The Association of British Insurers said there remained "a lack of medical evidence as to any long-term health benefits" and added: "An insurer is increasingly likely to ask if the proposer is using nicotine products, as opposed to what is the weekly tobacco consumption."

Lack of evidence of e-cigs’ impact on health is hampering other authorities’ decision on how the products should be regulated, taxed and sold. But Mr Sutton said insurers should address the issue now. "Lifestyles change – the insurers are simply behind the times."

If, as many believe, e-cigs are shown to pose less or no harm, the impact on insurance and other longevity-related financial products, such as annuities, could be far-reaching.

Nigel Barlow of specialist annuity provider Partnership said: "This is a very new market indeed. While e-cigs appear to cut down on some of the hazards associated with smoking, there are some questions as to the chemicals. While we do not at the moment take into account use of e-cigarettes when we quote for an annuity, this may well change in future."

Insurers are increasingly prone to ask about smoking and other harmful behaviour, often following up applications with tests. If e-cigs were to be proved significantly safer, this would have to change. A 40-year-old seeking life cover worth more than £500,000 would probably now be given a test for nicotine use, which would not distinguish between smoking and e-cig use.

Major tobacco firms’ rollout of e-cig products is likely to accelerate take-up. BAT, Britain’s biggest tobacco firm, estimates that 11million people use e-cigarettes across the world’s major smoking nations. BAT’s own e-cig, Vype, was launched earlier this year and now sells in Sainsbury’s, among other outlets. Imperial Tobacco, BAT’s main rival, will launch an e-cig next year.

The 'Vype' e-cigarette from British American Tobacco, now on sale in supermarkets
Dave Levin, joint founder of VIP, a British e-cig manufacturer not linked to the tobacco industry, said: "We launched our first e-cigarettes in late 2008 and now have a turnover of £18m and about 50,000 regular customers. Insurers and other industries are a couple of years behind the times."

One issue, though, is whether e-cig users still smoke ordinary cigarettes. Professor Robert West of UCL, an authority on smoking, found in recent research that more than 80pc of e-cig users were also smokers

Source: Telegraph

India govt. launches insurance, pension scheme for workers in UAE

The Indian Government has launched a pension and insurance scheme to provide social security to around 600,000 workers in the UAE.

All Indian workers with an 'Emigration Clearance Required' (ECR) stamp on their passports will be eligible for the new Mahatma Gandhi Pravasi Suraksha Yojana, Gulf News reports.

Minister of Overseas Indian Affairs (MOIA) Vayalar Ravi said the scheme is launched with an aim of encouraging a habit of saving among Indian labourers working overseas, who face problems when they get suddenly unemployed or go back home.

The scheme will cover around 5 million blue collar Indian workers, employed in 17 ECR countries, including UAE, the report added.

According to the report, the scheme will contribute 1,000 INR per year for every 5,000 INR to 12,000 INR saved by the subscriber, and the benefit will double for women subscribers.

The scheme will be valid for five years and provide free insurance cover in the event of accidental or natural death during the period of subscription. (ANI)

Source: Newstrackindia

NIA moves against ‘insurance packages’ offer by states

Chuks Udo Okonta

The Nigerian Insurers Association (NIA) has challenged the issuance of mandatory motor vehicle insurance package offered by states’ licensing offices across the country.

It was learnt that States’ licensing offices do compelled vehicle owners, against their wishes to buy insurance covers packaged together with other documents.

The Director-General NIA, Sunday Thomas, who said he has been a victim noted that the association has had meetings with the officers of the states’ licensing departments to put to a stop to the abnormally.

While narrating his ordeal with one of the licensing offices, he noted that he was compelled to pay for an insurance cover having bought a comprehensive policy for his vehicle.

He noted that the sale of ‘packaged insurance’ at licensing offices is inimical to insurance industry, adding that the proliferation of fake vehicle policies is the handiwork of racketeers at licensing offices.

According to a report, over N150 billion is loss by the insurance industry yearly, to fake vehicle policies issued by racketeers.

Investigation revealed that out of the over 12.5 million vehicles on the nation's roads, only I.5 million have genuine insurance particulars, which are either comprehensive which is sold at 10 per cent of the worth of the vehicle or third party which is sold at N5, 000.  

The NIA Director-General, said about 1.5 million vehicle policies have so far been uploaded on the industry's database which was designed to capture the data of all insured vehicles in the country.

He said: "So far close to 1.5 million vehicles have been uploaded, which is still a far cry from our expectations. Our target is to upload all the vehicles in the country.

"One of the major objectives of the Nigerian Insurance Industry Database (NIID) is able to capture the data of transactions within the market. In the past, this has been very difficult to get. We had people bouncing different figures all around, we want to put an end to that, and we need some time to do that.

"We will continue to update the record. There has not been any structured policy in the past, to get figures of numbers of vehicles. We only transact in terms of the financial reports not the typical present of number of vehicles. We are looking to a situation where we would be able to say this is the number of lives and vehicles insured in Nigeria.

"If you ask me today about the number of insured vehicles in the country, I would tell you that they are about 1.5 million, because that is what I can account for and have on my system."           

Tuesday, 29 October 2013

PFCs get PHCN's staff pension benefits

Chuks Udo Okonta

The Pension benefits of the over 40,000 Power Holding Company of Nigeria (PHCN) staff, who have been verified have been deposited in the accounts of Pension Funds Custodians (PFCs), Inspen has learnt.

The Director-General Bureau of Public Enterprises (BPE) Benjamin Dikki, who disclosed this today at a television programme in Abuja, said the monies, will soon be credited in the Retirement Savings Accounts (RSA) of the workers.

He noted that Pension Funds Administrators (PFAs) are presently working with the PFCs to finalise the necessary documentations to enable the PFAs commence the sending of credit alerts to the workers.

Though he failed to comment on the amount so far deposited with the PFCs, the government has set aside about N342 billion to settle the workers before the final transfer of the privatised companies to the buyer on November 1.

The new fund would boost the over N3.50 trillion raised since the take-off of the Contributory Pension Scheme, which has over 5.61 million contributors.

Union Assurance to be wean within the next 18-months

Chuks Udo Okonta and agency report


Union Assurance Limited will soon be wean as Union Bank its parent company has said it will divest non-banking subsidiaries within the next 18-months to comply with Central Bank of Nigeria (CBN) regulations.

Nigeria's central bank three-years ago stopped issuing universal banking licences and enforced new minimum capital requirements for banks in a bid to avoid a repeat of a 2009 near collapse of several lenders, including Union Bank.

Union Bank scaled a recapitalisation hurdle after the central bank propped it up and it agreed a $750 million cash injection by a group of investors to keep it afloat.

"Following (central bank) approval, Union Bank will proceed to divest its interests in its non-banking and portfolio companies ... and operate as an international commercial bank," Union's Chief Executive Emeka Emuwa, told Reuters.

Emuwa said the bank had 18 months to implement the divestment, citing that owning non-banking units had become less important with the growth in its core business and its ability to partner with other firms to cross-sell products.

Central Bank Governor Lamido Sanusi launched a historic $4 billion bailout of nine banks shortly after taking office in 2009, pledging to reform the industry and get credit flowing to the productive real sector and small businesses.

The new banking model requires lenders to sell all non-core businesses and form a holding company if they intend to carry out insurance, asset management and capital market activities.

Sanusi has said his primary objective is to ensure banks are effectively supervised and to ensure the safety of depositors' funds by prohibiting them from speculative capital market activities.

"The post-divestment structure will ... reduce the overall risk profile of the bank, while increasing the protection of depositors' funds," Union's Chief Risk Officer Kandolo Kasongo said, adding that the sale proceeds will be used to boost its balance sheet


Canadian who shipped his car to Nigeria pleads guilty to insurance fraud

A Whitby man has pleaded guilty to public mischief and been ordered to pay more than $3,000 after shipping his car to Nigeria before reporting it stolen to his insurance company

Desmond Stewart, 55, filed a stolen vehicle report with his insurance company, Aviva, in August, however some inconsistencies in his report led to an internal investigation, which then had Aviva involve Durham police.

Together, the police and the insurance company were able to track Mr. Stewart's vehicle to a shipping container which had cleared Canadian customs en route to Nigeria in July.

Mr. Stewart had waited until the vehicle cleared customs before reporting it stolen.

"Like staged accidents, unrecovered vehicles and staged thefts are becoming a bigger problem in Canada," Greg Dunn, executive vice president, national claims with Aviva Canada, said in a press release. "Insurance fraud costs everyone, but through continued cooperation with local authorities we can take these costs out of the system to help reduce premiums."

Originally facing an additional charge of fraud, Mr. Stewart pleaded guilty to mischief on Oct. 4, receiving one-year probation, a fine of $3,450 and 100 hours of community service.

Source: Durham

Lawmakers push to delay huge flood insurance hikes


A bipartisan group of lawmakers is pressing for a four-year delay to changes to the federal government's flood insurance program that are threatening to sock thousands of people with unaffordable premium hikes.

The move comes as the government is beginning to implement a significant overhaul of the much-criticized program. That overhaul passed last year with sweeping support. The revamped program was backed by both liberals and tea party conservatives but has caused a panic in places like Staten Island, N.Y., and the New Jersey coast and in flood-prone areas of Louisiana, Mississippi and Florida, where higher rates threaten to push some people out of their homes.

Some of the most ardent supporters of delaying the premium increases are conservative Republicans from Southern states, where the new rules have sent some home values plummeting because of uncertainty over insurance rates and because subsidized rates can't be passed along to buyers. New flood maps threaten to saddle some homeowners who are paying a few hundred dollars a year now with annual premiums of more than $20,000.

Last year's legislation promises premium increases to 1.1 million homeowners who've received subsidized, below-risk coverage and could sock even more homeowners whose homes met older building standards or were deemed at lower risk under previous flood maps. Under the old rules, they could retain their old rates since they followed the rules when they bought or built their home, but they will soon lose those "grandfathered" rates under the new law.

The new legislation, to be unveiled at a Capitol Hill news conference Tuesday, would delay the new rates for people purchasing homes from someone who currently has a subsidized policy or people who face higher rates when flood maps are updated. People with second homes or whose property has repeatedly been flooded would still have to pay the higher rates, which are scheduled to rise by 25 percent a year until their premiums reflect the true risk of flooding.

Last year's law protected subsidies for people who receive them if their houses hadn't been recently flooded. The new legislation would allow them to transfer the subsidy when they sell their home, thereby propping up home values.

Sponsors of the bill included Democratic Sens. Bob Menendez of New Jersey, Mary Landrieu of Louisiana and Bill Nelson of Florida, as well as Republican Sens. Johnny Isakson of Georgia, David Vitter of Louisiana and Thad Cochran of Mississippi. Rep. Maxine Waters, D-Calif., who co-wrote last year's legislation, is also on board.

"This is great news for many Floridians who've been told their flood insurance rates were going way up," Nelson said. "If people can't afford the coverage, what good is it going to do?"

It's unclear whether the drive to delay implementation of the law will succeed. Backers of the delay won an impressive, bipartisan 281-146 House vote earlier this year on an amendment to a spending bill that would postpone some of the premium increases. But conservative groups are against the idea, and House and Senate leaders have both been silent about it.

The flood insurance program has long offered below-cost rates for homeowners in flood zones and has racked up about $25 billion in red ink since its creation in 1968.

It has been criticized for repeatedly paying off homeowners whose houses get flooded every few years. The flood insurance program collects $3.5 billion in premiums each year, but the Federal Emergency Management Agency, which runs it, says $1.5 billion more is required from subsidized policyholders to put it on sound financial footing as required by last year's changes.

The new legislation also requires FEMA to conduct an overdue study about the affordability of imposing risk-based rates on homeowners and directs the agency to propose ways to tackle affordability issues.

Source: Associated Press

Insurers prepare for claims following storms

It may be too early to start counting the cost of the economy of the storms, but the calls to insurers from homeowners and businesses have already begun.

Insurers believe the aftermath will not be comparable to the 1987 storm - which resulted in a bill of around £2bn.

However there has been widespread damage to fences and roofs, and thousands of houses are still without power.

Mark Shepherd from the Association of British Insurers told BBC Radio 5 live's Dominic Laurie and Beccy Meehan: "It will take time to fully consider what the loss has been and there's obviously has been significant damage to properties."

Source: BBC

Monday, 28 October 2013

MET Insurance to shore up capital

By Samuel Doe Ablordeppey


Metropolitan Insurance is to shore up its minimum capital by the close of the year with additional $5 million.

This should make the general business insurance company one of the most capitalised in the country way above the National Insurance Commission's GH¢1 million minimum capital threshold and strengthen the company's ability to retain a greater chunk of the business it writes.

Currently, Met Insurance reinsures about 60 per cent of the business it underwrites and this is expected to change when its capital moves above the current GH¢4.6 million. Its shareholders' funds stands at GH¢12 million.

The Chief Executive Officer of Met Insurance, Mr Kwame Gazo-Agbenyadzi, told the Daily Graphic at Prampram last Friday, that local and foreign investors had already shown interest in the recapitalisation process and were poised to take up their calls.

Mr Gazo-Agbenyadzi disclosed these at the annual sales day out at Prampram, near Accra, to appreciate the contribution of its sales team to the premium income of the company.

Last year, the total gross premium of Met Insurance stood at GH¢45 million. As of last month, the company was only a percentage shy of its GH¢51 million premium income target, which company executives believed would be overshot by the close of the year.

'As at the end of September, 2013, the contribution of the sales team stood at GH¢16.5 million, a 17.4 per cent growth over the 2012 output of GH¢14 million for the same period,' the CEO told the sales team, some of whom were awarded for their hard work.

The sales team contributed 35 per cent of the total gross premium of the company.

The company wants to invest part of the fresh capital to expand its branch network to be closer to the customer and upgrade its information technology infrastructure, making it possible for its sales team to process insurance business online.

'Better capitalised companies are able to compete. We will have the resources to maintain our quality human capital, support our sales team with more training and capacity to enable them to grow their business and contribution to our gross premium,' Mr Gazo-Agbenyadzi stated.

The CEO of Met Insurance was also happy about the performance of the sales force, as 13 sales executives achieved a 100 per cent growth over their performance last year.

'Some of you have even collected more than the debits raised in your names for the period under review; this is highly commendable,' he said and called on them to remain professionals with unquestionable integrity.

Mr Richard Reichmann, a MET2U Manager, emerged the overall best in premium production and debt ratio, as well as the overall best in new business production.

Mr Paschal Dusi also emerged the overall best in debit premium production, with Ms Zalia Garia, emerging the Fastest Growing MET2U office manager.

For the sales executives category, Mr Vincent Mawuli Anane, emerged the overall best in company's debt ratio; Mr Peter Richie Adzogble took twin awards of overall best in debit premium production and overall best in new business production, while the fastest growing sales executive went to Mr George Kobina Ackom. Ms Doreen Akosua Aboney was adjudged the most entrepreneurial sales executive for 2013.

Source: Daily Graphic

Republicans want health insurance exchange questions answered

Ken Thomas

Republicans said Sunday they intend to press Health and Human Services Secretary Kathleen Sebelius on the Obama administration’s troubled launch of, the online portal to buy insurance – even as the website suffered yet another setback.

A component of the online system that has been working relatively well experienced an outage Sunday. The federal data services hub, a conduit for verifying the personal information of people applying for benefits under the law, went down in a failure that was blamed on an outside contractor, Terremark.

"Today, Terremark had a network failure that is impacting a number of their clients, including," HHS spokeswoman Joanne Peters said. "Secretary Sebelius spoke with the CEO of Verizon this afternoon to discuss the situation and they committed to fixing the problem as soon as possible."

Jeffrey Nelson, a spokesman for Verizon Enterprise Solutions, of which Terremark is a part, said: "Our engineers have been working with HHS and other technology companies to identify and address the root cause of the issue. It will be fixed as quickly as possible."

The Obama administration will face intense pressure this week to be more forthcoming about how many people have actually succeeded in enrolling for coverage in the new insurance markets. Medicare chief Marilyn Tavenner is to testify during a House hearing Tuesday, followed Wednesday by Sebelius before the House Energy and Commerce Committee. The officials will also be grilled on how such crippling technical problems could have gone undetected prior to the website’s Oct. 1 launch.

"The incompetence in building this website is staggering," said Rep. Marsha Blackburn, R-Tenn., the second ranking Republican on the panel and an opponent of the law.

Democrats said the new system needed time to get up and running, and it could be fixed to provide millions of people with affordable insurance. Kentucky Gov. Steve Beshear, a Democrat, said the system was "working in Kentucky," a state that has dealt with "some of the worst health statistics in the country. … The only way we’re going to get ourselves out of the ditch is some transformational tool," like the new health insurance system.

Blackburn said she wanted to know how much has been spent on the website, how much more it will cost to fix the problems, when everything will be ready and what people should expect to see on the site.

The botched rollout has led to calls on Capitol Hill for a delay of penalties for those remaining uninsured. The Obama administration has said it’s willing to extend the grace period until Mar. 31, the end of open enrollment. That’s an extra six weeks. The insurance industry says going beyond that risks undermining the new system by giving younger, healthier people a pass.

Sen. Joe Manchin, D-W.Va., who is seeking a yearlong delay to the penalty for noncompliance, said his approach would "still induce people to get involved, but it will also give us the time to transition in. And I think we need that transition period to work out the things." Sen. Jeanne Shaheen, D-N.H., who has urged the Obama administration to postpone the March 31 deadline, said she was concerned applicants would not have a full six months to enroll.

© Copyright 2013 Associated Press.

Corporate Governance to be Made Compulsory for Finance Sector Operators

By Nnamdi Duru

The National Insurance Commission (NAICOM) has said the major regulatory bodies in the Nigeria’s finance sector were considering amalgamating the Corporate Governance codes existing in the respective sub-sectors in the industry.

According to the commission, this process would be followed by the making of relevant laws to make compliance with the consolidated codes mandatory for boards and management of companies operating within the sector.

The Commissioner for Insurance, Mr. Fola Daniel, stated this while fielding questions from newsmen after the meeting of the newly-inaugurated Governing Board of NAICOM in Lagos recently.
Codes of Good Corporate Governance for the insurance industry currently cover structures, practices and procedures put in place by the board and persons duly appointed by the owners to direct and manage the business of the company. It is also expected to ensure transparency, accountability and enhanced shareholders value.

According to him, implementation of corporate governance is the business of Board of Directors of companies even as they are said to be advisory and not mandatory for now.

He also confirmed that the major regulators in the finance sector including the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC) and the NAICOM were trying to harmonise the codes they issued for operators under their supervision respectively.

After amalgamating these codes, the regulators are likely to give the document a legislative back up to make compliance with the codes compulsory and make it possible for the law to be enforced, he added.

"Corporate governance as advisory, I think, will soon become a thing of the past. There is an attempt to amalgamate all the codes as set by the pioneers of corporate governance. SEC is the pioneer of corporate governance even before the banks. The Central Bank followed suit and we were the last comer. I am happy that we did it when we did because if we didn’t pass our corporate governance codes then we would have been the old man out.

"So there is an attempt to amalgamate it and give it some legal backing as we have in the United Kingdom. In the United States of America it is comply or explain but American society is advanced. People will naturally even want to comply in order to advance their business interests but here we are trying to give it a bit of legislative push," Daniel said.

He also explained why the insurance regulator is not in a hurry to enforce some aspects of the codes, particularly, restricting the number of years a Director can sit on the board of a company saying there was no need for that since the industry is not in crisis.

"The press wants us to mimic the banking sector. The banking sector has different problems. Normally, change of board members is the prerogative of shareholders. There was crisis in the banks that made that to happen but we don’t have the same situation in the insurance sector," the insurance commissioner stressed.

Launched by NAICOM in 2009, the Code of Good Corporate Governance for the Insurance Industry in Nigeria refers to the manner in which companies are directed and controlled.
It also encompasses the means by which the board and management are held accountable and responsible for their actions and includes corporate discipline, transparency, independence, accountability, responsibility, fairness and social responsibility.

These rules increases competitiveness and makes criminal activities more difficult and helps to provide a degree of confidence that is necessary for the proper functioning of a market economy and economic growth, the insurance regulator stated.

Before now, the commission said the "Nigerian insurance industry shall operate on a good corporate governance framework which promotes transparent and efficient markets, and clearly articulates the division of responsibilities among different stakeholders in the industry."

Meanwhile some of the major recommendations of the codes are still being flouted by some operators in the industry with the commission, particularly in the area of composition of Boards of Directors, appointment of Chairman and Chief Executive Officer.

Section 5.04 (x & xi) of the code for insurers states that: "The Chief Executive Officer of the company shall be the person approved by the commission and shall be a member of the board throughout his/her tenure. Any individual taking major action in the running of the company must either be a member of the board, the management or paid consultant.

This particular code is further given teeth by the appointment of approved person’s provisions in various insurance laws which require that Chief Executives of companies, Executive Directors and Head of Departments must be qualified insurance professionals with various years of experience in insurance practice.

Source: Thisday


Insurers resort to negotiation over N58.64bn outstanding premium

Chuks Udo Okonta        

Insurance operators are now negotiating and persuading their debtors to pay over N58.64 billion outstanding premiums owed prior to the implementation of the No Premium No Cover policy, Inspen has learnt.

It was gathered that some operators have agreed to let go 50 per cent of the debts provided the clients are willing to pay.

Brokers who spoke on the development were divided on how to recover the debts. While some belief that only last year’s debt should be recovered and past years written off, others said they would continue to persuade their clients to see that they recover parts of what they owe.

A broker told Inspen that the issue is a bit complicated, because the operators cannot take the debtors to court over the outstanding premium, as there is no provision for sale of policy on credit. He noted that operators can only persuade their clients to pay base on relationship.

According to the Nigerian Insurers Association (NIA) 2011 Digest, outstanding premium for general and life insurance operators stood at N58.64 billion as at 2011.

To put a stop to this abnormally,  the insurance regulator, National Insurance Commission (NAICOM),  last year, issued “Guidelines on Insurance Premium Collection and Remittances”, signalling the end of providing insurance covers on credit and guiding insurance brokers and underwriters on how to go about collecting and remitting premium to beneficiaries.
The guidelines stated that “All insurance covers shall only be provided on a strict ‘no premium no cover’ basis. Consequently, only cover for which payments have been recovered directly by the insurer or indirectly through a duly licensed insurance broker shall be recognisable as income in the books of the insurer.

“Any insurer who grants cover without having recovered premium in advance or premium receipt notifications from the relevant insurance broker shall be liable to a penalty on the sum of N500,000 in respect of each cover so granted and in addition, may be a ground for suspension of the license of the insurer.
“Irrespective of the period of insurance, insurers shall ensure that at any point in time, they have received directly or indirectly through the insurance broker, the full premium in advance for the cover bring granted.”

In the same manner, the guidelines provided that insurance brokers, lead underwriters and primary underwriters must notify insurers, co-insurers and reinsurers as the case may be of any premium collected on their behalf within two days of receiving such premium.

“All insurance brokers shall within 48 hours of receiving insurance premium on behalf of any insurer, notify the insurer in writing in each case, of the receipt of such insurance premium. All such notifications shall be accompanied by the broker’s credit notes acknowledging indebtedness to the insurer. An insurance broker who fails to notify the insurer of any premium received on his behalf shall be liable to a penalty of not less than N250,000 in each case of failure to notify,” the commission directed.

“In consonance with the Insurance Act, 2003, there shall be no outstanding premium in the books of any insurer as covers granted on credit are not recognised by the law. In order to protect the interest of policyholders and other stakeholders from the negative consequences of the existing practice, insurance operators are required to comply with the following guidelines with effect of January 1, 2013,” it stated.

Sunday, 27 October 2013

Earthquakes, insurance companies compared to wolves

Who and what can you trust is the theme of a play about 5 people living in Avonside in 2010 when the ground shakes, the Council is paralysed, insurance won’t pay out, and their secrets invade the uncertainty of the broken city.

Canterbury Repertory Theatre in association with Oily Rag Theatre present a new New Zealand play about betrayal that starts in the crust of the earth but spills into people’s lives and a world turned inside out and evil that lurks.

Performed in The Office in the CBD bar, the play features five actors, some original New Zealand music and a story about people.

Sam Fisher the Director says this is a play that looks at the massive upheavals of the quakes in 2010 and early 2011 and uses this as a back drop for personal stories, "The idea is the earthquakes were a shock and taught us a lot about each other and the insurance companies and government, that perhaps we would rather not have known. The failure of the land and of the institutions is mirrored in the failings of people. The play is sharp, intense and we believe engrossing. The hardest thing is reproducing earthquakes in a theatre situation."

"There will be a lot of written, performance, musical and visual art about the earthquakes and their affects on us, and it has profoundly affected a generation and their world view. This isn't the first play about the 2010 earthquake sequence and it won't be the last. This rich vein of social and personal upheaval makes for excellent drama."

The actors include Steph Cusick who has just returned home to Christchurch from a season on Shortland Street, Cameron Mason, who has appeared on the Erin Simpson show and local theatre actors Iain Jones, Sophie Rea and Jordon Jones.

Tim Barcode, writer of a range of successful plays, including Location Location (Little Box at the Top of the Stairs 2009), CAfE Dement (Wellington and Christchurch 2007), Geeks Bearing Gifts, The Adjudicator (winner of the 2000 NZTF One Act Play Festival) and winner of two Wellington Fringe Festival awards.

The play has Creative Communities Funding and is supported by The Press, Cassel and Sons, and Dead Set clothing (

Source: Scoop Indpendent news

Small-business insurers warn that Obamacare requires higher premiums in 2014

By Stephen Koff, Plain Dealer

Small companies with a worker or two who have the misfortune to require serious medical care know what happens at insurance-renewal time. Their premiums don’t just rise. They leap.

Small employers don’t have that happen as often when they have young, healthy workforces.

This is an old reality in the health insurance field, which until now correlated a policy’s price with a client’s risk and claims experience. Was an employee hospitalized recently? Is he at risk of cancer? The employer’s premiums were almost sure to spike.

The Affordable Care Act is about to upend these old insurance pricing models, especially for companies with 50 or fewer employees. Yet until things stabilize, this is going to mean a lot of price hikes for small businesses, according to Ohio health insurance administrators, brokers and even advocates of the health care law commonly called Obamacare.

"I’m not certain about all that many things that surround my life," says Paul Nachtwey, vice president of the employee benefits practice at Beachwood-based Todd Associates, a brokerage and advisory firm. "I am certain of that. It will be bad out of the gate, and it will only get worse."

Even Rhett Buttle, vice president of the Small Business Majority, an advocacy group allied with Democrats, acknowledges coming price changes -- some up, some down -- in a number of states.

"Is there going to be some price differential?" asks Buttle. "Most likely."

But premiums climbed for years before the Affordable Care Act, or ACA, and Buttle says the act will help stabilize them and provide more certainty, rather than disruption, to small businesses.

Predictions are in fact mixed as to whether this will be a continuous upward spiral or a temporary but worthwhile discomfort. The predictions tend to match political views and, in at least some cases, views on the insurance industry and its long-term practices and trends.

Price swings were the norm long before Barack Obama became president and Congress passed his signature reforms in 2010. Double-digit premium hikes were common. Employers complained a lot about insurance.

The ACA aimed to change that, although right now the people charged with making it work are struggling just to get the computer bugs fixed. In the long run, the ACA is supposed to change the insurance pricing structure in both the individual and small-employer group markets.

Linda Blumberg, an economist and senior fellow in the Urban Institute’s Health Policy Center, describes the change by citing the example of employers like General Motors. With thousands of employees, many of whom seldom seek medical care, GM’s premiums won’t suffer if a few employees get sick and wind up hospitalized. That’s not the case for a business with four, five or a dozen employees.

The ACA is supposed to change that. But there will be short-term price shifts in order for it to happen, she agrees.

"It’s very important to look at this as not just what happens in one year," she says.

Steve Millard, president and CEO of the Council of Smaller Enterprises, or COSE, in Cleveland, explains how it could work out, although he approaches it without blinders and sees flaws on both sides of the ACA arguments. COSE already helps thousands of small businesses in Ohio buy insurance.

"We’re estimating in the individual market between 100 and 125 percent and in the small-group market between 25 to 50 percent will be your average rate hike" next year, he says. But even that "really depends upon where you fall.

"If you have a group of old, chain-smoking, cancer-ridden employees, you’re going to see a rate reduction. And we’re seeing reductions of 25 to 35 percent in some groups, based on the fact that they’ve got a really bad demographic, if you will, in their population.

"But if you are in that pool of folks who are really critical to making this work, folks they’re trying to get in -- you’re the young, healthy folks, you’re the small computer programming shop with guys who don’t really use healthcare - your rate increases are going to be 25, 50, 75 percent."

And then?

By 2016, he says, if everything were to work out, premiums would stabilize, with rates more closely aligned to medical inflation rather than an employer’s and employee’s good or bad luck.

In hopes of this occurring, the ACA is creating broad pools of individuals who either lack health coverage now or who buy their own policies. In theory, a bigger pool spreads risk among many and holds down the cost of administering multiple separate policies. For small businesses with up to 50 employees, the ACA created so-called SHOP pools, which stands for the Small Business Health Options Program.

Enrollment in SHOP will be open to employers with 50 or fewer workers, expanding to 100 in 2016. The exact start date is not known; the U.S. Department of Health and Human Services earlier this year pushed it back from Oct. 1 to November. As recently as this afternoon HHS did not have a firm date but reiterated that enrollment would begin sometime in November.

Enrollment in the SHOP marketplace, or exchange, will be optional, and small companies may choose to still work with a broker as they navigate their SHOP options.

That’s the simple part. The bigger challenge -- and the point of complaint of many in the business -- is how, exactly, to price policies for both individuals and small businesses, whether they buy on an exchange, on their own or through a broker. Until now, policy prices in lightly regulated states such as Ohio were based on a buyer’s age (older equaled more expensive, because the risk of illness was greater, insurers said); gender (women can get pregnant and that means some will have more medical bills); state of health (those with preexisting conditions could be denied coverage because they might need very expensive treatment); smoker status (smokers require more healthcare), and location (doctors and hospitals costs more in some areas).

The ACA's architects said many of these factors were unfair or discriminatory, so the bill put limits on the pricing factors, starting next Jan. 1. In both the individual and small-business markets, preexisting conditions will no longer be grounds for denial, and health status won’t drive up a policy’s premiums. Gender cannot be considered. Premiums for the oldest person covered cannot be more than three times as high as premiums for the youngest. The insurance industry and Obama administration call this "modified community rating."

What could be wrong with such a concept?

Insurance brokers and even health-plan operators say that by changing the pricing structure, the federal government guaranteed that companies that now have relatively low premiums -- because of younger workers, healthier workers, an all-male workforce -- would have to shoulder a bigger share of the general workforce’s health costs.

While companies with older or sicker workers might see their prices drop, insurers say these will be in the minority. And because companies with fewer than 50 employees will be exempt from an ACA requirements to provide health coverage, those with rising costs could be tempted to just drop it or become self-insured and take their chances, critics say.

"When you dislocate premium from risk," says Nachtwey, "and you are counting on people paying more for what they don’t need, they will find something else or not buy."

Companies with fewer than 25 employees and wages below $50,000 can temper the price hikes by getting ACA tax credits on the SHOP exchange. But those are expected to be a minority -- 15 percent by some estimates -- of small firms.

"We sampled our small business clients to forecast the impact of community rating and the results are sobering," Nachtwey said on LinkedIn. "Of the 61 businesses we looked at, only 13 are projected to see any rate reduction, 15 we were unable to make a forecast, while 33 face rate increases."

Of those in the latter group, 21 -- representing 46 percent of businesses for whom the firm could forecast -- face increases of 25 percent or greater, he said. Three of the companies could see hikes of 55 percent or more.

Mike Troyan, a former Medical Mutual vice president who now owns an employee benefits brokerage agency, said his firm projects hikes between 30 percent and 105 percent for small businesses, "all because of community rating."

"Medical risk is gone," says Troyan, of TMC Employee Benefits Group. "Gender is gone. You compress all these rates and, as you look at them, 75 to 80 percent of small-group employers are going to see their rates go up."

Asked about this, Anne Armao, vice president of marketing at SummaCare, the Akron-based health insurer, said, "I think they’re right on. That’s exactly what we’re seeing."

And Dan Polk, vice president of small group sales for Medical Mutual of Ohio, says when asked what share of small-business policyholders will see increases versus decreases, "That’s the thing about this. We’re really in uncharted water."

For now, Ohio brokers and insurers say their small-business clients are avoiding the big, coming hikes by renewing current policies before the year's end. That places them under 2013 rules. But they say the high prices will hit hard when renewal comes around in 2014.

ACA supporters and researchers don’t dispute this entirely. But they say the doomsayers overlook two important factors.

The premium reductions for small companies with older or sicker workers will be greater than the increases for the companies with younger and healthier workers, says Gary Claxton, vice president of the Kaiser Family Foundation and director of its Health Care Marketplace Project.

"The people who come down will come down more than the ones that will go up," Claxton says. "Because the groups that are sick get hit pretty hard."

But those rates should then stabilize and, under the new pricing structure, companies should not be hit with the kinds of sudden, unpredictable swings they face now when one or two employees become ill, say Claxton and other policy analysts.

So if it all comes together -- if the ACAs current technical glitches are overcome and the pricing works out for at least some -- will next year’s pain for others be worth it, or at least fairer?

COSE’s Millard spoke this this when asked for his personal opinion of the Affordable Care Act.

"I think there are some aspects that are beneficial to small businesses, such as getting off the volatility of the experience rating," he says. "Because in most cases employers cannot affect their employees’ health status. Moving to a more modified community rating is probably a good thing overall for employers."

But on the flip side, Millard said, "small employers are really challenged right now with the cost of all this stuff. The Affordable Care Act doesn’t do anything to really reduce costs," and the penalties for individuals who don’t sign up on the individual exchange are too low to make them do so. And if they don’t get insurance, "these changes won’t work."

Yet "it’s not all bad," he concludes. "I think the advocates on both sides who are totally for it or totally against it don’t know enough of the details to have a balanced view. They’re just driving their talking points. By the way, I haven’t seen a better solution laid out there, either. We have to do something, because the system as designed is unsustainable."

Troyan, the brokerage owner and former Medical Mutual executive, is far less convinced.

"In the end," he says, "the answer can come down to a single measurement: Are more people insured, and are rates lower? And you can put me on the record with an answer to both: No."

Source: WorldNetDaily

Lagos State Governor tackles insurers over outstanding premium

Chuks Udo Okonta

The Lagos State Governor Babatunde Raji Fashola, has said insurance operators have no legal right to call for outstanding premium as such is not provided for in the industry’s law.

The Governor, who spoke at the State’s Council Meeting, said since Insurance Act stipulates that “the receipt of an insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect of an insurance risk unless the premium is paid in advance”, therefore, there is no basis for outstanding premium, as insurance business is only contracted when premium is paid.

He called on insurers to comply with their laws and be proactive, so as to maximise the enormous insurance potentials in the country.

Saturday, 26 October 2013

Obama taps private company to oversee dozens of fixes to health insurance website

It should be working well by the end of November. That’s the Obama administration’s rough timetable for completing a long list of fixes to, the new, trouble-plagued website for uninsured Americans to get coverage.

Summarizing a week’s worth of intensive diagnostics, the administration acknowledged Friday the site has dozens of complex problems and tapped a private company to oversee fixes.

Jeffrey Zients, a management consultant brought in by the White House to assess the extent of problems, told reporters his review found dozens of issues across the entire system. The site is made up of layers of components that are meant to interact in real time with consumers, government agencies and insurance company computers.

It will take a lot of work, but " is fixable," Zients declared.

The vast majority of the issues will be resolved by the end of November, he asserted, and there will be many fewer screen freezes. He stopped short of saying problems will completely vanish.

The troubles have been nightmarish for the White House, which had promoted enrollment to be as simple as making a purchase on This week, President Barack Obama declared himself frustrated by the setbacks while still trumpeting the benefits of the health care law and encouraging consumers to apply by phone if the website proved a hindrance.

In his weekly radio and internet address Saturday, Obama vowed that "in the coming weeks, we are going to get it working as smoothly as it’s supposed to." In the meantime, he encouraged the public to call 1-800-318-2596 or visit

"We’re only a few weeks into a six-month open enrollment period, and everyone who wants insurance through the marketplace will get it," he said.

As part of its effort to repair the system, the administration said it is promoting one of the website contractors, a subsidiary of the nation’s largest health insurance company, to take on the role of "general contractor" shepherding the fixes.

Quality Software Services Inc. — owned by a unit of UnitedHealth Group— was responsible for two components of the government’s online insurance system. One is the data hub, a linchpin that works relatively well, and the other is an accounts registration feature that initially froze and caused many problems. was supposed to be the online portal for uninsured Americans to get coverage under Obama’s health care law. Envisioned as the equivalent of for health insurance, it became a huge bottleneck immediately upon launch Oct. 1. The flop turned into an embarrassment for Obama and will likely end up as a case study of how government technology programs can go awry.

The briefing from Zients came a day after executives of QSSI and the other major contractor, CGI Federal, told Congress that the government didn’t fully test the system and ordered up last-minute changes that contributed to logjams. Next week, Health and Human Services Secretary Kathleen Sebelius is scheduled to testify.

Source: Associated Press

Federal employees can buy insurance on exchange

In response to Jerry Bowerman (Your Views, Oct. 21): Members of Congress and their staff are subject to the provisions of the Affordable Care Act. When the law was passed, U.S. Sen. Charles Grassley, R-Iowa, attached language to the bill that mandated all members of Congress and their staffers have to buy health insurance on the newly created health insurance exchanges.

What nobody accounted for was that members of Congress and their staffers have health insurance from their employer — the federal government. No other employer has been legally required to drop its employee health care plan and have them buy coverage on the exchanges. What the administration did is rule that the congressional workers would continue to get the employer contribution to help them buy their insurance on the exchange.

Source: NewsOk

Can Agencies Thrive without Govt Funding?

By James Emejo

Only recently, during the inauguration of new members of the governing board of the National Insurance Commission (NAICOM), the apex insurance regulator in the country, Minister of State for Finance, Dr. Yerima Ngama, had hinted that the commission would henceforth be denied budgetary allocation beginning from next year.

According to the minister, government believed that the insurance industry had come of age and should be able to generate sufficient internal revenue to carry out its activities without relying on budgetary support from the federation account.

Although the decision to stop fund to the insurance agency was greeted with mixed reactions by stakeholders, Commissioner for Insurance/Chief Executive of NAICOM, Mr. Fola Daniel, was quick to welcome the development assuring that the proposed stoppage would not cripple the commission.

The commissioner had further assured that the commission could ultimately survive without government subvention.
Similarly, in December last year, the House of Representative refused to approve statutory allocation for the Securities and Exchange Committee (SEC) as it passed the Budget 2013 Bill mainly because the Director-General of the commission, Aruma Oteh, had in controversial circumstances refused to step down from office as demanded by the lawmakers.

But barely ten months after approving a zero budget for SEC, the capital market regulator has continued to meet its financial obligations without recourse to budgetary allocation.

In the midst of the controversy, it was learnt that the presidency was said to have given the go-ahead for the commission to utilise the revenue it generated from its operations to thrive.

The commission’s main revenue sources are from premiums from capital market operators and levies for infractions among others.
To date, SEC has been paying staff salaries promptly as well as fulfilling other obligations, although it remained unclear how long the commission would continue funding itself without support from the treasury.

However, observers have argued that the development could force the Federal Government to further consider cutting funding to other government agencies, especially in the face of dwindling revenue expectation occasioned by oil theft and production challenges.

Besides, it is argued that leaving public agencies to survive on the revenues they generate from their activities would make them more efficient and proactive in their operation as they tend to maximise every opportunity to make money.

Already agencies like the Nigeria Customs Service (NCS), the Federal Inland Revenue Service (FIRS) as well as the Central Bank of Nigeria (CBN) are self-financing institutions which fund their operations and pay staff salaries from the revenue they generate before remitting the balance to the federation account.

But, experts believe the planned stoppage of public funding to NAICOM is likely to make the insurance regulator more aggressive in its activities as stiffer sanctions and tighter regulation may become the order of the day.

SEC, in particular, had in recent times stepped up its regulatory and enforcement responsibilities on capital market operators, by keeping a closer watch on them and imposing sanctions where appropriate against alleged abuses.

Similarly, insurance had often been handled with levity in almost every sector of the economy as various studies had indicated that majority of Nigerians don’t have any form of cover.

It is however argued that leaving NAICOM to fend for itself could be the beginning of the much-expected transformation of the sector and the economy in general.

But while some members of the public welcome the removal of public funding to agencies of government as a way of making them more efficient in their operations, others still believe not all of the agencies could actually survive it.

Source: Thisday

Friday, 25 October 2013

Marketing and Sales of Insurance as an Intangible Product a paper delivered by the President/Chairman Nigeria Institute of Marketing (NIMN) Ganiyu Koledo at the Insurance Consumers Forum (ICF) in Lagos.

Marketing and Sales of Insurance as an Intangible Product a paper delivered by the President/Chairman Nigeria Institute of Marketing (NIMN) Ganiyu Koledo at the Insurance Consumers Forum (ICF) in Lagos.


Ganiyu Koledoye is a Doctorate research student at the Leeds Metropolitan University in the UK.
MSc in Business Administration at the University of Bath in 1979.
Postgraduate DMS of the UK Council for National Academic Award (CNAA) at Kingston Business School, Richmond UK in 1977.
Post-graduate Advanced Marketing programme at The Greenwich University Woolwich Arsenal UK in 1975.
Graduate of Marketing at South West London College in November 1973.
Grad Member (CIM UK) 1974. FCBIM(UK) 1983. fnimn.
Managing Consultant- Siblings and Associates Ltd; FOE Resources Ltd.
Executive Chairman – Greylands farms and Auto Care Services Ltd. Sango. Ogun State.
Chairman – Dharmattan (Nig) Limited. Lekki. Victoria Island. Lagos State.
Managing Director and CEO – Zaria Industries Ltd.: 2002 -2006, Zaria. Kaduna State.
Managing Director and CEO – Coastal Bottlers Ltd.: 2000 -2008. Mile 2. Lagos State.
Group General Manager- Texlon Group =1996 - 2000. Mile 2. Lagos State.
AGM Manpower Planning and PCH Churchgate Group 1990 -1995. Victoria Island. Lagos State.
Personnel Manager Churchgate group 1987 -1990. Isolo. Lagos State.
Marketing Manager – Ebun Nigeria Limited (Pump Division) 1986 – 1987.
Lecturer and Examiner: CIM (UK); ABE; IAM; ATMC – South West London College; Centre for Marketing
and Management Studies; North East London Polytechnic; Clapham College of Technology( UK)1978 – 1986.

3. Marketing orientation model
1. "an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders."
2. It generates the strategy that underlies sales techniques, business communication, and business developments.
3. It is an integrated process through which companies build strong CUSTOMER RELATIONSHIPS and create value for their customers and for themselves.
Marketing is carried out at the three levels of an organization.
Each level within an organization is responsible for critical aspects in the total marketing chain.
Individual must appreciate his role and responsibilities in the marketing chain process for designed to achieve continuous marketing customer equity.
‘’a corporate philosophy which focuses on customer’s satisfaction and problem solving as the foundation for effective management of stakeholders and societal resources in order to ensure profitability, competitiveness and continuing survival of the business’’
‘ the management activities undertaken in identifying, analyzing and understanding the current and changing needs of customers and organizing, planning and controlling rational activities implemented for meeting needs identified for the purposes of satisfying and solving customers problems, as means for achieving organizational objectives for continuity and profitability’.
"Day to day decisions and activities undertaken in order to ensure that customers expectations, in terms of service requirement and problem solving, are met and management provided with feedback for review of marketing plans, goals and control.
Tactical level activities would include field selling, physical distribution, customers’ relations, product, brand and concept promotions, brand performance monitoring, competitors activities monitoring, accounts management, product testing, assessing effectiveness of promotional and other marketing mix strategies, merchandizing and presence in Marketing place.
The marketing approach inevitably leads to an organization, which constantly envisages changes in its market and accepts the challenges of finding out the nature and structure of the changes in the process of articulating resources to meet the demands of the market. Accordingly, marketing functions are organized to provide input into strategic planning and interpreting decisions based on marketing priorities.
The marketing concepts accept the continuous interplay of problem definition and problem solution through the market determined process.
The marketing orientation views organizational success as being driven by the provision of long term consumer satisfaction and emphasizes the importance of ensuring organization wide commitment to meet marketing need through the development and installation of quality marketing system.
The strength of the marketing orientation as a business philosophy is in its comprehensive nature. Everybody connected with the institution appreciates the need to build an organization, which meets today’s customer’s needs as well as their future needs. Beyond the expression of commitment, corporate policies and priorities are organized to ensure the continuous interaction with the market.
CUSTOMER ORIENTATION as a logical extension of marketing orientation
The customer oriented organization would develop organizational extension in which the institution dedicates staff and policies to meet the ever-changing needs of customers as opposed to the need of an aggregate market.
Customer focus sees the world as providing continuous opportunities which if identified can be met by utilizing the marketing orientation capacity and philosophy through a strategy of dedicated staff and policies to meet the demands of specific customers.
In order to be customer oriented, the organization would pursue a combination of sub-strategies designed for specific customers whilst retaining the global policies and strategies. The goals from the individual customer would vary according to needs, whilst at the same time, it forms part of the overall marketing oriented organization system.


Customers’ profile
Customers density
Customers’ segmentation.
Product’s economic, social and psychological features
Market Price sensitivity analysis.
Market trend analysis
Competitors’ activities data base
Market performance relative to forecast.
Marketing mix requirements and budget.
Brand profile and perception analysis.

Customer Service Key Performance Indicators:

Customer service email count
Customer service phone call count
Customer service chat count
Average resolution time
Concern classification
Once you have set goals and selected KPIs, monitoring those indicators should become an everyday exercise. And most importantly: Performance should inform business decisions, and you should use KPIs to drive actions.
A key performance indicator is a quantifiable measure a company uses to determine how well it meets the set operational and strategic goals. This means different businesses have different KPIs depending on their respective performance criteria or priorities. At the same time, the indicators usually follow industry-wide standards.

Sales Key Performance Indicators:

Hourly, daily, weekly, monthly, quarterly, and annual sales
Daily Prospecting: numbers and outcome
Daily, Weekly and Monthly conversions
Conversion rates
New customer orders versus returning customer sales
Cost of service provided.
Inventory levels.
To reach the total viable segment with insurance products demanded and adequate information to enable the company achieve sales target in each area, segment, district and zones as may be designed by the company at competitive costs.
To create Sales organization structure for planning and control.
To recruit train and retrain sales personnel for effective field sales activities.
To establish remuneration policies that will motivate Sales to higher performance and review performance of non-compliant sales personnel

Sales organization structure depicts the formal arrangement for organizing field work and support chain internally.
The internal support chain is responsible for planning sales objectives, sales quotas, sales targets, journey cycles; incentive schemes and communication support materials.
Sales organization structure shows division and specialization of labour in terms of
Line organization
Line and Staff organization
It provides for stability and continuity of organizational performance
It enables synchronization and coordination with marketing and non-marketing functions inpinging on sales functions.
Line and Staff sales organization
Horizontal Structure of the Sales Force
These will consist of different sales organisation structure. The company will adopt the most appropriate or combinations that would facilitate effective management of sales organisation. These are described below: Geographic organization
Product organization
Organization by customer type or market
Organization by selling function
The role of telemarketing
Geographic Sales Organization
Sales force organized by Product Type
Sales force organized by Customer Type
Consideration should also be given to organizing to meet need servicing ‘National and Key Accounts’
National or key accounts Assigning key accounts to sales executives
A separate key account division
A separate sales force for major accounts
Team selling Team selling
Selling center
Multi-level selling
Co-marketing alliances
Logistical alliances and computerized ordering
Start with a strategy consistent with the history of the company and the nature of business.
Appoint an expansion team
Leverage existing strengths
Go to the press
Start off with minimum fixed salary and performance based commission.
Provide support.
Establish time limit for take-off performance of 3 months.
Establish average performer of six months.
Recruit new sales agents.
Six C’s of finding a good sales representative
CRM is a corporate level strategy, focusing on creating and maintaining relationships with customers.
It is a holistic approach to an organisation’s philosophy, placing the emphasis firmly on the customer.
CRM governs a company’s philosophy at all levels, including policies and processes, customer service, employee training, marketing systems and information management.
Product; Pricing; Place; Promotion; people; process; physical evidence
There are several viewpoints on CRM: Is attracting, maintaining, and enhancing customer relationships for the mutual benefits of partners.
The focus of CRM is on collaborative and cooperative relationship between the firm and its customers and/or other marketing actors.
It is an integrated effort to identify, maintain and build up a network with individual customers and to continually strengthen the network for the mutual benefits of both parties through interactive, individualized and value added contact over a long period of time.
Is marketing oriented programme toward a strong, lasting relationship with individual accounts.
Is a genuine customer involvement in a business through communicating and sharing of knowledge.
CRM is a comprehensive strategy and process of acquiring, retaining, and partnering with selective customers to create superior value for the company and its customers.
Several factors have influenced interest in CRM. Some of these are:
Intense competition in many industries
Growth of service economy
Demanding and discerning customers
TQM - the emergence of total quality management.
This is a very important first step as it sets the stage for action and defines the limits.
It consists of segmenting your customers not only by their financial worth but also their service requirements, expectations and standard.
It also involves adjusting their expectations and standards to match your ability to deliver excellent service. Thus your relationship strategy is inevitably tied to your service strategy.
CRM Strategy entails customer classification and selectivity:
One-On-One relationship with individual customers, KAM.
Customer business development process
Frequency marketing
Loyalty programmes
Cross-selling, and Up-selling opportunities and various forms of partnering with customers including:
Joint marketing, and
Co-development, and other forms of strategic alliances.
Implementing CRM
CRM systems are integrated end-to-end across marketing, sales and customer service.
Implementing CRM
A CRM system should:
Identify factors important to clients
Promote a customer-oriented philosophy
Adopt customer-based measures.
Develop end-to-end measures to serve customers.
Provide successful customer support.
Handle customer complaints.
Track all aspect of sales.
CRM Architecture
There are three fundamental components of CRM:
Operational – automation of basic business processes (marketing, sales, service)
Analytical – analysis of customer data and behavior using business intelligence.
Collaborative – communicating with clients.
CRM Architecture
1. Operational CRM
Provides automated support to "front office" business processes (sales, marketing and service). Each interaction with a customer is generally added to a customer’s history, and staff can retrieve information on customers from the database as necessary.
Involves 2 general areas:
Sales force automation – critical sales, forecasting, account management, sales administration and tracking customer preferences.
Customer service and support – complaints, certain service requests, product returns and enquiries.
Marketing – provides information about the business environment, including information on competition, industry trends and macro environmental variables. These are used to improve marketing efficiency.
CRM Architecture
2. Analytical CRM
Analyses data (gathered as part of operational CRM, or from other sources) in an attempt to identify means to enhance a company’s relationship with its clients.
The results of the analysis can be used to:
targeted marketing campaigns.
Retaining existing customers.
providing timely and regular information to customers
contact optimization
Evaluating and improving customer satisfaction
Optimizing sales coverage
CRM Architecture
3. Collaborative CRM
Focuses on the interaction with customers (personal interaction, letter, fax, phone, internet, email etc.)
Providing efficient communication with customers across a variety of communication channels.
Providing online service to reduce customer service costs.
Providing access to customer while interacting with customers.
Benefits of CRM
CRM covers all interaction and business with customers. A good CRM program allows a company to acquire customers, provide customer service and retain valued customers.

Customer Services can be improved by:
Providing online access to product information and technical assistance around the clock
Identifying what customer value and devising appropriate service strategies for each customer.
Providing mechanisms for managing and scheduling follow-up sales calls.
Tracking all contacts with a customer.
Benefits of CRM
Identifying potential problems before they occur.
Providing a user-friendly mechanism for registering customer complaints
Providing a mechanism for handling problems and complaints.
Providing a mechanism for correcting services deficiencies.
Storing customer interests in order to target customers selectively.
With the great advances made in computer technology, mathematical science, there are a variety of software tools, both general and tailor-made, to facilitate CRM.
Effective CRM requires the development and use of relevant customer data bank. Again, in this respect, modern computer technology and software are available.
Any Marketing Activity or Programme designed to attract or win customers. Some of these activities include:
Direct Selling:
1. Personal selling
* Face-to-face
* Telemarketing
* E-mail.
2. Mass Marketing:
* Mass media aimed at wider consumer group
Product sampling and demonstration to stimulate trial.
Sales Promotion of various types.
Trade Fairs, Shows, and Exhibitions,
- General or Specialized.
Product/Service Quality: A guarantee that the product or service will deliver or function as promised most or all of the time.
Product/Service Reliability: The confidence or assurance that the product/service will not fail, e.g. phone will work or pen will write.
Safety: The assurance that the product/service is safe to use and will not endanger life or cause personal harm or injury.
Trust/Integrity: The perception that a business or person keeps to its/his words. It is ensuring your ‘No’ or ‘Yes’
Empathy: This is getting totally involved in the customers business and life – making the customer a friend and partner by sharing his feelings and aspirations. It is putting yourself in the customer’s shoes.
Listening: This is part of communication and is about effectively handling and managing customer complaint, ensuring that the customer is heard and is left feeling warm, good and satisfied.
Courtesy: Politeness and respect in relating with the customer. Generally, customer wants to be respected and treated like a king.
Two things to bear in mind in this respect:
Never hurt the customer’s ego
Never want to win an argument over a customer or go into any controversy. If you do, you might win the argument or get better in the controversy but be sure to lose the customer.
Acknowledgement: This is simply recognizing and deferring to the customer.
After Sales Service: Product service guarantees and warrantee.
Communication: Maintaining regular dialogue with the customer by being interested and involved in the customer’s business, via phone calls, personal visits, business mails, business updates, news letters, business or product/service brochures, etc.
Customer Satisfaction: This is ensuring that the product or service package truly satisfies most of the time: the products of service quality and delivery, company front desk attitude, business processes, billings, complaints handling, communication, etc.
Improving Customer Relationships
CRM tracks customers interests and requirements, as well as their buying habits. This information can be used to target customers selectively.
The products a customer have purchased can be tracked throughout the product’s life cycle, allowing customers to receive information about a product or to target customers with information on alternative products once a product begins to be phased out.
Repeat purchase rely on customer satisfaction, which in turn comes from a deeper understanding of each customer and their individual needs.
CRM is an alternative to the "one size fits all" approach.

Step 1: Identify your target customers

Begin by identifying your target customers. Who are they? What do they need from your agency? How, and at what times or places do they interact with your agency—what are the "points of service delivery"?


Cluster or segment target customers based on their common behaviors.
Determine the priorities of your customer "clusters".
When possible, focus on customers with high current or future value—for example, someone who frequently accesses your services. A comparable example is a frequent flier program—airlines offer a higher level of service (such as early boarding privileges) to their frequent flyers, while still meeting the needs of their other passengers.
To target the highest level of service to your "frequent flyers", you also need to identify the best ways to serve non-target customers, those to whom it is expensive to provide services, or those who might be better served by other means. This is a necessary part of a customer focus. One example: a fire department could discourage residents from contacting the department to remove cats from trees by charging a $20 fee for performing the service, and by advertising their busy emergency call load.
Step 2: Determine what your customers want

Determine what target customers want (not just what they need right now) by considering these techniques:
online customer satisfaction surveys
phone or email survey
in-person meetings or focus groups
user testing
channel analytics (web, phone, etc.)
Determine how target customers prioritize their "wants". Generally, customers want timeliness, convenience, quality products and services, variety or selection, and protection or security. However, each agency must identify what is most important to its customers.
Weigh how important the customer-identified "wants" are to your agency. Are the services something that the organization does, is capable of doing, or wants to pursue?
Determine how well your agency can meet your customers' "wants" in comparison with competitors. You may think you don’t have competitors, but more than likely you do, especially if you're producing consumer-related information for the public. Be mindful of who's doing similar work—if competing organizations meet or exceed customer expectations, it changes the customer's frame of reference and increases their expectations.
Determine which "wants" would most positively impact your agency's bottom line (for example, increased compliance with a regulation, more loyalty and trust, or a desired customer behavioral change), and whether those "wants" should be targeted for improvement.
3.Create a culture of customer service

In the best performing private companies, CEOs ensure that employees at all levels understand their customers and are given the tools to serve them well.
Agency leadership must communicate the importance of customer service and ensure that all employees, even those without direct customer-facing jobs, understand how their work serves customers.
Management must regularly interact with customers so they understand evolving customer needs.
Most importantly, front-line customer service workers must be empowered to actually solve problems on the spot.
4. Clearly communicate service standards and expectations
Set service standards, such as call wait times, claims processing times, and satisfaction ratings.
Clearly define the standards and make them publicly available.
Clearly defined goals helps motivate employees and helps manage customer expectations.
When service standards cannot be met, customers must be informed—a non-negotiable best practice in the private sector.
Step 5: Provide consistent service across channels

Agencies should continuously collect comprehensive customer feedback across the whole customer experience—not just via each channel.
As communication preferences change, we need to adapt our services to interact with our customers, when and how they prefer.
Consistency of service across channels is critical—a customer who gets an answer on the phone should receive the same answer in-person at a local office, via the website, over email, or via mobile device.
Step 6: Establish a vision for customer service excellence

Establish your agency's customer-focused vision using all the information in these steps. The vision statement should be simple and may also identify what the company does not want to be. Sample vision statements include:
"Absolutely, Positively Overnight" by Federal Express
L.L. Bean's promise of "Guaranteed. Period."; and
Google's "Do no evil"
Continually reflect on the vision and goals and the way services you're delivering service. Be creative about the ways you create and deliver new services. Be willing to change existing practices to integrate improvements.
Live up to what you promise by applying both an external and internal strategy that reflect the vision. If your agency doesn't implement both internally and externally oriented strategies consistent with the vision, you'll have good intentions but poor customer service.
Step 7. Implement an external strategy

Take into account the costs of providing services and ways to minimize those costs while implementing quality control. Develop the service concept with the frontline worker at its center. Determine the necessary financial, human, and technological resources, as well as how your agency structure and flow can enable frontline workers to deliver excellent customer service.
Use advertising/educational strategies to set appropriate customer expectations.
Provide a feedback loop to incorporate customer comments and complaints into the planning process. Customer complaints are an invaluable resource. Without them, organizations can't be successful. Complaints that people bring to your agency are one of the most efficient and least expensive ways to get information about people's expectations of your agency and its products and services. Studies have shown that customer comments and complaints are a more direct means of getting information than conducting research studies of customer expectations, conducting transaction studies, or reviewing customer expectations in similar industries.
Ensure that the complaint resolution strategy supports the customer-focused vision. Most research shows if customers believe their complaints are welcomed and responded to, they will more likely come back to your organization for a future interaction.
8. Focus on recruiting and retaining good employees
While Step 7 outlined an external strategy, the next three steps cover, in detail, the internal strategy—how your agency’s internal processes will support the customer-focused vision.
The premise is that "capable workers who are well trained and fairly compensated provide better service, need less supervision, and are much more likely to stay on the job. As a result, their customers are likely to be more satisfied…" (Harvard Business Review, 1994).
Research also shows that employee turnover and customer satisfaction are directly correlated—typically, the higher the turnover rate, the lower the agency scores in delivering good service.
In addition, it's commonly noted that employee turnover is an expensive problem, with significant costs needed to hire and train new people.
Leaders must foster the creation and testing of new ideas and be openly willing to change existing practices to integrate improvements.
Learn how targeted employees perceive the proposed customer services. An organization cannot change without the participation of its employees.
Focus on recruiting employees who support the customer service vision. The costs of employing people who do not support the customer service vision are considerable. In addition, develop career paths that allow successful customer-oriented employees to remain on the frontline.
9. Empower employees to resolve customer service problems

Empower frontline employees to do what it takes to satisfy the customer. Management must support employee empowerment by clearly defining the boundaries of the empowerment, while remaining flexible within those boundaries. This will encourage creativity. In general, rules should be simple and few—Continental Airlines actually had an employee handbook burning party to signify the change from a procedural environment to one of empowered customer service (Spector, 2001).
In addition to skills and empowerment, equip frontline personnel with the technology, information, and internal resources to do what it takes to satisfy your customers.
Step 10: Develop good communications and rewards system

Ensure that divisions and individuals within your organisation communicate. Frontline employees who take customer questions, and other employees who have answers to those question, need a support network. A customer should never have to tell one employee what another employee already knows.
Develop cross-functional teams for operations and improving service. Ask the people who are doing the work for suggestions to improve productivity.
Link employees' compensation to (and offer rewards for) good customer service performance. Rewards can be money, status, praise, acknowledgement, or perks such as trips, time off, or special events.
Finally, measure employee satisfaction regularly.
CRM is a veritable tool for enhancing business performance.
It is a potent source of competitive advantage if well conceived, planned and implemented.
As customer trends show, and as products and services attend parity especially for the service industry, CRM holds the key to ultimate success.
Finally, like most other elements of management, people make the difference in CRM.