Wednesday, 30 April 2014

N5.6b pension theft: Accused collapses in court

A Nigerian High court sitting in Ibadan, capital of the western state of Oyo yesterday postponed the re-arraignment of a former Oyo State Head of Service, Mrs Kudirat Iyabo Adeleke and 11 others implicated in a N5.6Billion pension scam.

Justice Adegboye Gbolagunte postponed the re-arraignment till May 2, 2014 following the sudden collapse of one of the defendants, Mr. Oguntayo Banjo, who had an asthmatic attack when the court was about taking their pleas.

They were to be re-arraigned on charges bordering on conspiracy, stealing and criminal breach of trust.

The twelve defendants were originally arraigned on November 7, 2013 before Justice Bolaji Yusuf, who was later elevated to the Court of Appeal. Her elevation meant that the trial of the accused persons had to commence anew.

Earlier, counsel to the 5th defendant, I. M Obiachuru, presented an application before the court, objecting to the re-arraignment of his client and prayed the court to quash the charges preferred against him.

However, EFCC counsel, Gbolahan Latona, said the notice of preliminary objection moved by Obiachuru was incompetent and lacked merit.

He reminded the court that such an application could only come after arraignment. Justice Gbolagunte upheld his submissions and dismissed the application.

The other accused persons who are to be re-arraigned alongside Adeleke are Muili Hakeem Aderemi, former executive secretary, Oyo State Pension Board; Adeduntan Johnson; Oguntayo Banjo, former internal auditor, Oyo State Pension Board; and Kareem Rasheed.

Others are: Muili Adedamola; Adesina Jimoh Ayoade, former cashier, Oyo State Pension Board; Adebiyi Olasumbo Musendia, former administration officer, Oyo State Pension Board; Iyabo Giwa, former cashier, Oyo State Pension Board; Adewale Kehinde, Johnson Bosede and Olujinmi Adebayo.

Source PM News

Mergers, acquisitions driving in-roads into new insurance markets

Commissioner for Insurance Fola Daniel

By Modestus Anaesoronye

Securing new operational license for starting insurance business in most markets have become increasingly difficult and almost a non-option, a situation that has led to a growing number of mergers and acquisitions as the working strategy for new entrants, investigations have revealed.

For instance, while government through the National Insurance Commission (NAICOM) has said it would no longer give fresh licenses for doing business in Nigeria, entrants into the market particularly foreign firms, have largely been driven by mergers, acquisitions and partnerships.

Of recent is the coming into the Nigerian market of Old Mutual through acquisition of Oceanic Insurance belonging to Eco Bank. Before now are other foreign players like Sanlam of South Africa in FBN Insurance; NSIA in Adic Insurance; Metropolitan Life in UBA Metropolitan.

Within the local market also are key acquisitions seeing the likes of Custodian and Allied taking over Crusader plc; ARM taking over CrystaLife; Capital Alliance taking over SpringLife and many others.

CRE in new report into future insurance mergers and acquisitions (M&A) trends from KPMG International, says insurers at global levels are rethinking their business model in light of economic and regulatory changes and focusing on sustainable underwriting in the face of continuing low investment yields.

Sam Evans, global insurance transactions and restructuring lead, KPMG International: "As insurers seek to secure profitable growth, enter new markets and rationalise non-core operations, M&As are an increasingly important element of the overall strategy.

"M&A activity in the insurance sector continues to be relatively buoyant, particularly for mid cap deals. Consolidation in mature markets and continued expansion in high growth markets combined with a focus on securing new distribution are driving activity."

The report identified 10 trends for M&A activity for insurers: Opportunities created through dramatic shifts in technology use; increasing activity and competition from private equity and non-corporate acquirers; Asia remains a competitive, heavily penetrated market but opportunities remain; continued activity expected in Latin America; Markets in Africa, Turkey, the Middle East.

Other are regulatory change continues to act as a deal catalyst; rising inbound M&A interest into mature markets; traditional insurers exit legacy segments/sell non-core books to focus on growth and capital redeployment; opportunities to create core infrastructure in high growth markets; access to data changes results in new partnerships and business models.

Regional opportunities
The report highlights the opportunities in Africa, Turkey, and the Middle East as also attracting attention. "We expect to see a new horizon of high growth markets with countries in Africa and the Middle East attracting significant interest, prompting a rapid increase in M&A and distribution related transactions," said the report.

It added that investment isn’t a one-way street. "In a reversal of recent deal flow, we expect more inbound investment to mature markets. For example, as Chinese and other investors look to capitalise on opportunities created by current economic conditions," it noted.

The continuing implementation of risk based capital and consumer protection initiatives will serve as a catalyst for change, creating investment opportunities, said the report. It also pointed out: "Many high growth markets lack the core infrastructure to support ongoing sectoral development, including central clearing houses and data availability and integrity. The development of this infrastructure will create investment opportunities."

Right strategy, right partner
KPMG stressed that it was important to enter new markets with the right strategy and partner. "While insurers see fresh opportunities in new markets, justifying rising pricing multiples, there are vast challenges in completing a successful M&A in an unfamiliar geography," the report said.

"Recently, intensified competition means that bidders must differentiate themselves from the pack and prepare offers that demonstrate value and fit for the local partner. Acquirers also face increasingly complex regulatory hurdles, which can cause significant delays or impose cumbersome post-deal operational burdens or costs."

KPMG added: "We recommend regular dialogue with regulators in key target markets to build a strong working relationship and enable you to test transaction concepts in advance with the regulator."

The report warned that abandoned deals or problematic integration can result from a buyer’s inability to understand or navigate foreign culture and values among the seller, partners, regulators, customers and employees.

"As a result, successful buyers must gather detailed market intelligence and tap into knowledgeable local players to better appreciate on-the-ground conditions, culture and operating considerations.

"The prospective buyer should also carefully map out their M&A strategy and approach, precisely identifying underlying goals for the acquired asset and how they will achieve growth. Without such in-depth, upfront strategic reflection, buyers can find themselves invested in the wrong market, with the wrong partner, or lacking clearly defined post-deal direction," the report concluded.

Source Businessday

FG defaults on No Premium No Cover Policy

By Nnamdi Duru

Notwithstanding the standing rule which insists on full payment of insurance premium before the commencement of cover, the federal government has continued to insure the lives of its employees on credit.

The federal government, according to industry sources, is yet to pay the balance for the various group life assurance schemes for its workers for 2013 while the premium for the current year remains fully unpaid.

This is in negation of the "No Premium No Cover" principle which commenced across the country January 1, 2013.

The insurance regulator, National Insurance Commission (NAICOM) two years ago issued "Guidelines on Insurance Premium Collection and Remittances", signalling the end of the provision of insurance cover on credit and guiding both insurance brokers and underwriters on to go about collecting and remitting insurance premium to beneficiaries.

"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 insure," NAICOM ruled.

The federal government has continued to observe this rule in reverse with life insurers and their umbrella body, the Nigerian Insurers Association (NIA) grumbling.

Even the insurance regulator, who is the adviser to the government on insurance related matters, seems to be helpless as it cannot sanction life insurers for providing group life cover to government on credit since its principal is the one breaking the rule.

This breach has continued to be a source of concern to stakeholders in the industry who are worried over the fate of the Group Life Assurance (GLA) schemes for employees of the Federal Government Ministries, Departments and Agencies (MDAs) in the current year.

Last year, insurance companies in the country, particularly life insurers underwriting federal government group life assurance schemes threatened to withdraw cover until government pays the outstanding premium for the previous year and the premium for last year.

As at July last year, outstanding premium for group life assurance for federal government employees was over N2 billion, industry sources confirmed.
The condition that necessitated the threat has continued to this year, a worried operator said.

Still in breach of the no premium no cover policy, the federal government recently appointed various consortia of insurance companies to underwrite the group life assurance schemes for its employees in various MDAs.

Aiico Insurance Plc was appointed lead underwriter for the Nigeria Police account while the Industrial and General Insurance Plc IGI) is leading the para-military accounts respectively.

Capital Express Assurance Company Limited was appointed lead insurer for the group life assurance for workers in the Federal Ministry of Finance as well as for those in the Office of the Head of Service of the Federation (OHOSF) and the Office of the Secretary to the Federal Government (SGF) respectively.

Also, African Alliance Insurance Company Limited was appointed lead underwriter for workers in the Ministry of Defence and their colleagues in the Police Service Commission respectively.

While Mutual Benefits Assurance Plc (MBA) was appointed lead insurer for group life assurance scheme for workers in the Ministry of Mines, ARM life Assurance Limited, is lead insurer for workers in the Federal Ministries of Works and Power respectively.

The Pension Reform Act, 2004 made group life assurance for workers both in private and public sectors at the expense of their respective employers compulsory.
Section 9 (3) of the Act states that every employer must "maintain life insurance policy in favour of the employee for a minimum of three times the annual total emolument of the employee."

The major advantage of group life assurance is that it guarantees that if a worker is unable to accumulate significant amount in his retirement savings account before he dies, his estate would still get something tangible up to at least 3 times his annual salary.

Source Thisday

NAICOM to use brokers’ 2012 accounts for renewal

From left: Deputy President of the Nigerian Council of Registered Insurance Brokers (NCRIB), Kayode Okunoren; President of the Council, Ayodapo Shoderu and Keith Alford, Managing Director of Old Mutual Life Assurance, when the the company hosted Insurance Brokers in Lagos. 
Chuks Udo Okonta

Embattled brokers can now sleep with their eyes closed as the National Insurance Commission (NAICOM) has agreed to process this year’s renewals with 2012 accounts, as against the earlier position which stipulated that 2013 International Financial Reporting Standards (IFRS) compliant accounts should be used.

President Nigerian Council of Registered Insurance Brokers (NCRIB) Ayodapo Shoderu, who disclosed this yesterday in Lagos, said the leadership of the Council took the appeal to the Commissioner for Insurance Fola Daniel, which he graciously granted.

According to him, the commissioner was not happy with the number of companies that have so far submitted their 2013 accounts, adding that the Daniel put the numbers of submitted accounts at less than 30 per cent.

Shoderu noted that the commissioner also frown at the unethical practices by some brokers who manipulate insurance premiums.

 He urged members to continually compliment the efforts of the national secretariat in the enforcement of ethics and elimination of charlatans, adding that the task is a collective one and it behoves operators to mount surveillance across the zones of the country to ascertain those who are practicing as insurance brokers illegally, with a view of bring them to book.

Rector College of insurance pledges to raise first-class professionals

Dr. Oyetayo

Chuks Udo Okonta

The Rector, College of Insurance Dr. (Mrs.) Yeside Abiodun Oyetayo, who resumed few weeks back, has pledged to enhance the manpower needs of the sector by raising notable and first-class professionals.

In an exclusive interview with Inspen, she noted that the college would exploit all available opportunities to raise professionals that will take the insurance and financial sectors to the next level.

She said the college would partner reputable academic institutions within and outside Nigeria to strengthen the industry’s’ man power.  

She said: “We are preparing for the commissioning of the college, hopefully; very soon, we will kick-off with the planned activities. Basically, the main objective of the college is to boost the man power need of the insurance and finance industries in Nigeria; we will be committed to developing programmes that would strengthen the man power needs of the industries.

“We are very sensitive in meeting the needs of the industries and that is why the college will be collaborating with other institutions. Part of our programmes would be partnering institutes abroad in order to meet this man power need. We intend to partner colleges, institutes and universities within and out Nigeria for this purpose. Definitely, the college is up to the task of raising first class professionals.”

 Director-General Chartered Insurance Institute of Nigeria (CIIN) Kola Ahmed, said in line with the institutes resolve to promote transparency, accountability and prudent management of resources placed at its disposal, CIIN leadership has in the last few months ensured that the resources of the Institute are judiciously applied.

“As we speak, the Institute is not indebted to any contractor or supplier as we meet our commitments as they arise. Also in the last 7 months the Institute has committed close to N100 million in accelerating the development of the College of Insurance and Financial Management.

“The Institute has also, following the directive of the Finance and General Purposes Committee of Council, established a sinking fund (Reserved fund) with a combined sum of N20 million. The reserve is funded from the surpluses generated by the Institute.”

He noted that the Institute has also received greater support from the National Insurance Commission (NAICOM). He lauded the commissioner for Insurance Fola Daniel, for his support which has gone a long way to reinforce the institute’s educational programmes more than ever before.








  Highly Pleased to be in midst of business men, Intellectuals and Insurance gurus

  The choice of a topic on Insurance Development in Nigeria  is necessitated by current happens in the nation Economy and contribution of Insurance to our GDP

  Insurance today is being conducted over a vast array of lines of business that encompass personal, commercial, marine, aviation, agriculture, life, health, financial and engineering insurance. Lloyd's is famous for insuring the life, health, legs or even noses of actors, actresses and sports figures.



  Used primarily to hedge against the risk of a contingent loss.

  Early method of transferring risk were practiced by Chinese traders as early as the 3rd millennia BC.

  Modern profit insurance manifested in Babylon almost 2000 years BC, in a contract of loan of trading capital to travelling merchants.

  The Greeks and Romans introduced the origins of health and life insurance to us around 600 AD, when they organized guilds which afforded members certain benefits such as proper burial rites

  Iranian Monarchs were the first to insure their people to some extent, formalising the process by registration thereof at court.

  Insurance policies not bundled with loan or other kinds of contracts were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates.


  Hamburg fire contracts were concluded on 3rd of December 1591 which are generally regarded as some of the first examples of true mutual insurance contracts that we have today.

  The first insurance company in the United States  underwrote fire insurance and was formed in Charles-Town ,South Carolina in 1732.

  The first American life insurance association was sponsored by a church-the Presbyterian synod of Philadelphia around 1840.


  The report of J.C Obande Commission of 1961 was the first major step at regulating the activities of insurance business in Nigeria

  The Insurance Decree No 59 of 1976 constituted the first All-embracing Law for the regulation and supervision of Insurance business in Nigeria.

  The Federal Government of Nigeria promulgated the Insurance Special Supervisory Fund decree 20 of 1989 to strengthen the manpower need of the Insurance Supervisory Board.

  In 1992, the Insurance Special Supervision Fund decree No 62 was enacted, establishing a body known as National Insurance Board, bringing out Insurance supervision outside core civil service, changing designation of Chief Executive from Director of Insurance to commissioner for Insurance and setting up the Board of Directors to oversee the affairs of the established Body.

  Companies in the insurance sector have been angling to meet the industry gross premium target of N1.1 trillion set by the Nigeria Insurance Commission (NAICOM). The Projection target has been shifted to year 2017.



  The Gross premium of 14 insurance companies was compared with 14 bank’s customer deposit in three consecutive years. The banking industry grew by 62.99% whilst insurance sector grew by  33% in term of customer patronage.

  Also, the total Asset of Insurance grew by  21.97% but banking Asset grew by 53.62% in the three years of analysis.

  Gross Premium Compared with Bank Deposit



Notable amongst these challenges are the following:

   Issue of Corporate Governance


  Public Perception & Image Repair


  Innovation & Product Development

  Employment of the Marketing Concept

  Strategic Alliances

  Branch Expansion

  Information Technology

  Renewed Vision, Mission & Core Value

  Service Quality & Responsive Claims Payment

  Broadening Scope of Insurance Business in Nigeria

  Capacity Building & Manpower Development

  Staffing and Manpower Development


  Market Share in Our Large Population

  Our Local Participation in Oil and Gas facilitate local Risk retention and foster Insurance Market penetration.

  Public awareness and Active role of NAICOM to ensure improved payment of Premiums and Claims.


Listed below are the various underlying growth drivers for Nigeria’s insurance industry:

  Growing of the financial industry as a whole

  Growth of life and non-life industry

  Promoting innovation and removing inefficiency

  Competition and orderly growth

  Growth of specific insurance segments such as motor insurance


In meeting the significant potential, the industry has an increased role and responsibility to fog ahead. Three areas of focus could be:-

  Distribution-This include positive changes to Market dynamics and changing in consumer preference. ie Product innovation

  Regulation-Effective adjustment to regulatory changes and must drive transparency and product simplification.

  Making sales and marketing more responsible and answerable.


  Finally, with the renewed interest of Nigerians in the industry as well as the commitment of NAICOM and its allied regulatory bodies towards engendering international best practices and standards in the industry, the investors are expected to receive enormous benefits, while the insurance industry will contribute positively to the principal objective of the Federal Government’s Financial system strategy 2020 to make Nigeria twenty largest economies in the world by the year 2020.




Investiture of new National President of the Association of Registered Insurance Agents of Nigeria (ARIAN) Gbadebo Olamerun
Your Excellency, Governor of Ondo State
Chairman, Board of NAICOM
Hon. Commissioner for Insurance
Director Generals of Insurance Institutions
Managing Directors
Colleagues in the Industry
Gentle Men of the press
Distinguished Ladies and Gentlemen
It is with utmost gratitude to God I stand here today before this great audience as the President of this prestigious Association to deliver this speech, history today will bear us witness of the change and development insurance agents will bring to the insurance market.  
As the new president of ARIAN, my vision is straight and direct; “to make insurance agency business easy”, however collaborating and partnering with other stakeholders in and out of the industry especially with state governments, our regulatory body – NAICOM, NIA, CIIN, NCRIB etc to foster the deepening of insurance penetration in Nigeria.   
In ensuring that the insurance agency business is made easy, collaborating with stakeholders is a top notch on our agenda, I’ll rather stand on the shoulders of the giants in the industry than do it my own way because no man is an island of his own. Likewise collaborating with all insurance practitioners including my constituency the agents, we are proposing an interactive session with all insurance agents tagged MEI (Members Evening Initiative) which will be a quarterly strategic session where agents will be hosted by one of the leading insurance companies, this drive will afford all the major players in the industry to meet with the agents, increasing their capacities, give them a positive mind set and sense of belonging.  
We will also ensure that all agents are licensed by NAICOM as we speak we have over 3000 agents registered with NAICOM and we project that by the end of 2015 this executive would have registered 20,000 agents into the books of ARIAN and NAICOM. However we are aware that over 20,000 unlicensed agents transact insurance business all over Nigeria, we are also using this medium to call all insurers to collaborate with us to ensure all their agents are licensed by NAICOM. Increasing the number of registered insurance agents with NAICOM will also increase premium which will lead to increase in the insurance GDP contribution in the country.  
We are poised to drive NAICOM’s MDRI with a national holistic view by mobilizing all insurance agents for its execution.  
Show me successful agent you will find an entrepreneur per excellence, a giant coordinator, a strategic thinker, an excellent marketer with class and integrity who sells the intangible products to both corporate and individuals. Distinguished colleagues if you are not selling it mean you have not improved on your entrepreneurial skill. It took Dangote to strategically plant one or more of its product in each home in Nigeria. For insurance to gain its desire penetration he must target the family unit as an emerging market. If all families in Nigeria have one form of insurance or the other then we are gradually moving to the promise land.  
Professionalism of Agents is another key area of implementation for us. Lots of trainings will be organized for agents, training the trainers will also be done. We will also ensure agents are certified by CIIN because we have been able to push for a reduction of the amount for the proficiency test certification which is the most expensive requirement for agent’s registration with NAICOM. We also want to add value to agency network by recruiting more matured executives such as retired personnel and retrenched bank staff to market specific products such as annuity.  
It’s no longer news that agency operation is created on the basis of commission, the market today has become more dynamic to attract more better incentives like Commission and transport allowance, Commission and salary, Commission and production incentives, however way distinguished ladies and gentlemen, commission incentive is a major determining factor for the success of an insurance agent. The era of commission only aided and abated sharp practices among some agents which have affected the image of the insurance industry. ARIAN has an entity setting up a portal in its website to check the activities of its members, relate with HR of each organization, and collaborate with the insurance companies to reduce sharp practices to the barest minimum.  
The future of the insurance industry is retail business, we have over 170 million individuals and our insurance penetration is still less than 1% meaning 1.7 million Nigerians have one form of insurance or the other. My question is this the best we can do? Of course not. Insurance agents are the grass root pillar of any successful insurance economy. We will drive the market with the new initiative of micro insurance to reach the nook and grannies of the length and breadth of Nigeria.    
Formally, the highest cadre for an agent was agency manager; I want to appreciate all insurance companies that have opened up channels for agents to aspire more into management and leadership roles in their various organizations. Today, we have Agency Coordinator, Regional / National Agency Manager, Assistant General Manager - agency, Agency director, and even Managing Directors who at one point in their career were agents. It will not be a tall order, if in my lifetime an agent becomes the Commissioner for Insurance.    
Many insurance companies drive agency business based on the perception of ignorance and the result speaks. We in ARIAN can act as a consultant to such organization to help develop and build a formidable agency structure.  
Today we are honouring our colleagues that have distinguished themselves in our chosen career of insurance agency marketing where the highest agent produced 590 million naira and the highest agency produced 1.3 billion naira in 2013 accounting year. The stake is becoming bigger so also is the cake. Remember as you lay your bed so you will lie on it and as a man thinketh in His heart, so is the man, it’s not by chance we are celebrating this distinguished ladies today. It took a lot of hard work, concentration and if I’m not mistaken the God factor. I challenge you distinguished ladies and gentlemen to make 2014 a year of celebration for you.  
I congratulate His Excellency, Governor of Ondo State, Dr. Olusegun Mimiko as the first recipient of this new initiative for contributing tremendously to the growth of health insurance, health care, maternal and infant mortality reduction and cooperative thrift / credit societies in Nigeria. This recognition is long overdue, very well deserved as it thrills me with the various nominations he got from well-meaning Nigerians. Some says Gov. Mimiko is an advocate, a practical change agent, a governor per excellence, a pace setter, a people centered leader, a humble performer and a deliverer of democracy to the people in the grass roots.  
Your Excellency on behalf of the Insurance industry we bring you our warmest congratulations. It is an honour to be selected for this award as it’s speaks highly about how you and your team are perceived in the insurance industry and Nigeria at large. It is a positive contribution that deserves our recognition and we are proud to say that you are the best governor of our time.    
Finally, I will to close my speech with a story I tagged “The mystery of the three screws”.   Above all we cannot do this on our own but with God and by His grace we shall surely overcome.  
Many Thanks.
Gbadebo Olamerun