'How PFAs demarket annuity business'

Chuks Udo Okonta

Insurance firms with pension subsidaries are the ones enjoying annuity business the Managing Director of Life Insurance firm, has alleged.

He told Inspen that a
nnuity business ought to be thriving, but it is still out of reach of some insurance companies due to the attitude of some Pension Fund Administrators (PFAs).

He noted that the money life operators ought to obtain from annuity is being withdrawn by the PFAs, adding that instead of PFAs to focus on programme withdrawal, they go about marketing the same person an insurance company is prospecting.

He said: " We expected annuity product to be thriving in this economy. But as far as the business is concerned, it is still out of reach for insurance companies. The major reason is the money that need to be withdrawn from the PFAs are being held on.

"I have done many proposal, I have done many presentation with oil companies and construction companies, but the PFAs are saying, let the money stay with us. "Whatever insurance companies can do for you, we will do it for you and the Act covers it for them.

"Annuity is still very low in our market, except insurance companies that has a PFA are the one enjoying it. It is a product that suppose to be thriving well. That which is suppose to be brought to insurance companies are being held on to by the PFAs. It is not a case of saying they withheld it. It is a case of PFAs marketing the same person an insurance company is marketing, that is the experience.

"And when you think you have close a deal, the man comes to you and said my PFAs said they could still give me the same thing. The same structure that you said you will pay me on monthly basis, they said they will pay it.

"When I said withheld, I did not mean that they will not release the money, but they are ready to give them whatever you have proposed to them. It is like indirectly, the PFAs is accepting the annuity too."

He noted that life operators would continue to do their best to provide good services on annuity as provided by the Pension Reform Act 2004.