Fight demarketing of annuity with good products NIA told insurers

Chuks Udo Okonta

The Director-General Nigerian Insurers Association (NIA) Sunday Thomas, has called on insurance operators to fight the alleged demarketing of annuity business by Pension Funds Administrators (PFAs) through development of good products that suits the needs of retirees.

He disclosed this in a media parley with members of National Association of Insurance Correspondents (NAICO), in Lagos. He noted that insurers and pension operators ought not to fight over annuity and programme withdrawal as the law has specified the roles to be played by the operators.

He said the menace would have stemmed from the operators' lack of adequate knowledge of how the two businesses operate, adding that they were designed to compliment each other.

He said: " When we heard of the issue of demarketing between the operators, I had cause to write to pencom and copied NAICOM. I believe it is due to lack of adequate knowledge of the subject.

"I happened to be among those who were instrumental to given effect to the law, when I was with NAICOM. And annuity was not designed to be a conflict between the institutions. But the problem, may probably be due to lack of proper understanding. The two are supposed to compliment each other.

"The role of programme withdrawal is totally different from life annuity. There was a time the former Director-General of PenCom, was encouraging insurance companies to come up with products that will attract retirees and he gave a figure of which out of the total number of retirees, it was very small number that went by way of life annuity.

"If I a m an operator, demarketing will not bother me too much, all I need to do come up with good products, that would sufficiently go and endear itself to the minds of the retirees. I would go ahead and market the products and engage in public awareness."

He noted that the association would intensify efforts on creating awareness on annuity and its importance in the life of a worker.

The National Pension Commission (PenCom) has also called on insurers to intensify efforts in marketing annuity business instead of complaining of demarketing.

PenCom said 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.