Annuity: PenCom urges insurers to step-up marketing

Chuks Udo Okonta

The National Pension Commission (PenCom) has called on life insurers to intensify efforts in marketing annuity business instead of complaining of demarketing by Pension Fund Administrators (PFAs).

A staffer of PenCom who asked not to be named, told Inspen that the complain by some life insurers that they are denied annuity business by PFAs is uncalled-for as the Pension Reform Acts (PRA) 2004, has spelt out the roles to be played life insurers and PFAs in managing retirement funds.

Life insurers were asked to double their efforts in marketing the retirees who have been mandated by the pension Act to choose where to invest their retirement benefits. They were enjoined to stop complaining and reach-out to the retirees who would not on their own come to them to invest their benefits.

Some Life Insurers have alleged that only insurance firms with pension subsidaries are the ones enjoying annuity business.

An insurers said annuity business is out of reach of some of them due to the attitude of some 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 He noted that the money life operators ought to obtain from annuity is being withdrawn by the PFAs, adding that instead of PFAs to focus on programme withdrawal, they go about marketing the same person an insurance company is prospecting.

" 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 The major reason is the money that need to be withdrawn from the PFAs are being held on.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 said.