The state should harness technology to crack down on offenders and help bring down rates
Those who specialize in auto insurance fraud are deceptively thorough in crafting bogus documents to fool authorities. The result of their high tech phony handiwork is that honest Michigan drivers are paying hundreds of millions of dollars in higher insurance costs.
To crack down on the mounting fraud, Michigan Secretary of State Ruth Johnson has established the Fighting Auto Insurance Rip-offs initiative, which includes the Michigan State Police, prosecutors, state officials and insurance industry leaders. She said there will be special training for the staff and the department will aggressively suspend the registration of vehicles whose owners don’t have insurance.
And state Rep. Aric Nesbitt, R-Lawton, has introduced a bill that would allow law enforcement to use the latest technology to crack down on drivers who have fraudulent registration documents. It could also help honest vehicle owners prove they have the required insurance.
The problem is significant and the scammers often use high tech tools. During a one-day statewide spot check, 16 percent of the insurance documents presented were fraudulent. In one instance, an insurance policy used by nearly 30 customers included an official-looking QR computer code. But when scanned, the QR code linked to an online site that says only, "Llamas are sooo cool." Scammers have even gone online and are selling fake insurance documents on Craigslist.
"Some of the bad guys are surprisingly clever; it seems like every time we put up a road block to auto insurance fraud, they come up with a way to circumvent new security measures," said Johnson.
One high tech tool for the state is the Electronic Insurance Verification system. Twice a month insurance companies electronically provide a list of all of their customers and the vehicle identification numbers of their vehicles.
Law enforcement officers can use the Law Enforcement Information Network to access the verification system and determine if a driver is properly insured.
The bill would enhance this effort by allowing drivers to use their smartphones to prove they have insurance. A special app would be used to scan their insurance certificates into the phone.
Drivers who don’t appear on the insurance verification listing but have insurance can prove it through the use of their phones. The app serves as a supplement to their paper work. It would become particularly helpful when drivers don’t have the certificate of insurance in their vehicles.
Reports indicate one out of every five drivers on the road doesn’t have insurance, so this is a significant problem.
As Nesbitt says, "The more people with insurance, the less all of us will have to pay for it. As we modernize state government and make it more customer friendly, this is another step we can take. We’re still in the 1960s paper world and its time to bring us into the 21st century."
The bill is in the House Insurance Committee, which is chaired by Nesbitt. He said he hopes to have a hearing on it within a month.
It’s common sense for the state to use available technology to hold insurance offenders accountable and give honest drivers more options.
Source: The Detroit News
Monday, 30 September 2013
Osun Pensioners Protest Delayed Pay
Pensioners in the state of Osun took to the streets in a peaceful demonstration requesting the government to pay up their entitlements and benefits.
The elderly pensioners who trooped out at about 8am, walked 5 kilometers from Olaiya Junction within the state capital to the state secretariat at Abere along Gbongan-Akoda expressway
The retirees, under the forum of August 2011 – December 2012 retired Osun State Public Servants, voluntarily left the service as a result of the implementation of contributory pension scheme.
Some of the pensioners who spoke to Channels Television said that the demonstration was their way of appealing to the state government for payment of their gratuity and pension.
However, the state Governor, Rauf Aregbesola, who addressed them at the entrance of the state Secretariat, appealed for calm and assured them that the state will do all in its capacity to ensure the comfort of its citizens by attending to their request.
Source: Channels Television
The elderly pensioners who trooped out at about 8am, walked 5 kilometers from Olaiya Junction within the state capital to the state secretariat at Abere along Gbongan-Akoda expressway
The retirees, under the forum of August 2011 – December 2012 retired Osun State Public Servants, voluntarily left the service as a result of the implementation of contributory pension scheme.
Some of the pensioners who spoke to Channels Television said that the demonstration was their way of appealing to the state government for payment of their gratuity and pension.
However, the state Governor, Rauf Aregbesola, who addressed them at the entrance of the state Secretariat, appealed for calm and assured them that the state will do all in its capacity to ensure the comfort of its citizens by attending to their request.
Source: Channels Television
First Bank keeps hope alive on floating general insurance business
Chuks
Udo Okonta
First
Bank of Nigeria Plc having successfully established life insurance business
with Sanlam Emerging Markets of South Africa, said it is not going back on the
resolve to float a general business arm, Inspen can authoritatively
reveal.
Investigations
revealed that the Bank Group will soon make its position on the establishment
of the underwriting firm public.
A
source who pleaded not to be named said the group has been putting together
necessary requirements for smooth take off of the firm, adding that the challenges
encountered is being tackled.
He
said: "We are still working on it; the delay is due to some issues, which are
being tackled. We will make a formal announcement. At the moment, we can't say
much for we are bound by some level of confidentiality, when we get to that
stage we will make a formal announcement."
FBN
Life, a joint venture between First Bank of Nigeria Plc and Sanlam Emerging
Markets of South Africa, which was licensed to transact life insurance business
in Nigeria, officially commenced operations September 1, 2010.
In
the joint venture, First Bank of Nigeria Plc., Nigeria’s largest financial
institution owns 65 per cent of FBN Life, with Sanlam owns 35 per cent.
Managing
Director, First Bank of Nigeria Life Assurance Limited, Val Ojumah, had last
year said: "We believe that by the middle of this year we would have
acquired a non-life license either by buying an existing non-life company or by
getting a fresh license. We are approaching the issue on both hands."
Insurance nightmares: we thought we were covered
All insurance policies have conditions under which they will or won't pay out. Here are some common pitfalls to watch out for in health, travel, home and pet insurance.
Health insurance
Nic Hughes took out a life insurance policy which also covered critical illness, so that his family would get a lump sum payment if he got a life-threatening illness.
But when he was diagnosed with cancer in spring 2012, his family were refused the money.
The insurers said the policy was invalid because he had failed to declare all previous health conditions as required under one of the clauses in the contract.
But the specific information they claimed should have been provided was the condition of pins and needles as a result of an unrelated pre-existing medical condition that he had made them aware of.
In October 2012 Nic passed away and his widow Susie faced the threat of losing the family home.
Susie was determined to fight the case and turned to the Financial Ombudsman Service (FOS) which can resolve complaints made against insurers and other companies in the financial sector.
She claimed that all significant health conditions had been declared and the fact that his pre-existing medical condition had side effects of pins and needles was not significant.
In April 2013 the Ombudsman supported Susie. The company paid out and the family received £100,000 plus interest.
Travel insurance
Barry and Jean Mustill from Tonbridge took out a travel insurance policy, for their holiday to New Zealand and Fiji.
The couple went on their six-week holiday of a lifetime in February 2012, but never made it to Fiji.
In New Zealand disaster struck when Jean was hospitalised with a potentially life threatening condition. The doctors believed she had a pulmonary embolism perhaps brought on by deep vein thrombosis.
After a week in hospital Jean was unable to continue their holiday but was declared fit to fly. There was only one destination for the couple - home.
The couple submitted their claim to the insurance company for £2,800 which covered the cost of their unused holiday to Fiji.
The couple were stunned when the insurance company initially claimed they would only pay for Jean's half of the holiday to Fiji because she was the only one who had been hospitalised and had to cut short her holiday.
After months of phone calls, emails and letters to the insurance company the couple were left £1,400 out of pocket.
The team at BBC's Rip Off Britain approached the insurance company and queried the decision.
The company claimed that there had been a 'misinterpretation of the policy wording' and fully investigated Barry and Jean's case.
The company finally settled the claim in May 2013. They apologised and paid Barry and Jean the full amount of £2,800.
Home insurance
Andrew Hill and his girlfriend Chaska Gaines took out home protection and buildings insurance in addition to their mortgage, when they bought a bungalow in Glastonbury.
After spending 12 months modernising it they were due to move in, but a neighbour's home caught fire which quickly spread to Andrew and Chaska's house.
When the couple submitted their claim on the policy the insurance company rejected it on the grounds that the house was not permanently lived in during the renovation.
Andrew insisted that when he bought the policy he had explained to the person who sold him the insurance exactly what he was planning to do with the house, and how often he would be there.
Andrew's dad Paul was also at the meeting with the broker and Paul confirmed Andrew's version of events.
Andrew turned to the Financial Ombudsman Service (FOS) to put forward his complaint.
In July 2012, the FOS reviewed the case and concluded Andrew's policy was mis-sold.
The company paid out in full in April 2013 and five months later Andrew and Chaska finally moved into their property.
Pet insurance
Peter Lewin from Dorset took out a premium pet insurance policy for his six-year-old pet Labradoodle, Bentley, to cover the cost of any veterinary care he would need.
When his annual renewal quote came through the post in October 2012 it was around £575, more than double the cost of the previous year's policy.
Peter paid for a pet insurance policy for the first time in November 2009 and it cost him just under £140.
Unfortunately, Bentley required treatment with a problem in his ear, so Peter made a claim for the veterinary payments and follow-up treatment. His policy increased by £50 the following year.
After two more years of no emergency treatments, Peter was shocked to see his renewal policy more than double in price.
He shopped around for a more affordable quote but this was harder than he thought.
Peter was told by the insurers he approached that they would not cover his pet for any condition he had previously been treated for and that he would not be fully covered.
Peter decided to opt for a policy with an alternative company at the cost of £250, half the cost of the renewal quote he received in 2012.
This decision means that Bentley is not fully covered for his pre-existing medical condition.
Choosing the right policy
Get some independent financial advice to make sure you and your family are properly protected.
You can find a local independent financial adviser by visiting Unbiased who provide an impartial service or via the Personal Finance Society which is a free advisor search service from the professional body for financial advisers in the UK.
Additionally, the government's Money Advice Service website sets out information on various financial products and how they work.
Source: BBC
Health insurance
Nic Hughes took out a life insurance policy which also covered critical illness, so that his family would get a lump sum payment if he got a life-threatening illness.
But when he was diagnosed with cancer in spring 2012, his family were refused the money.
The insurers said the policy was invalid because he had failed to declare all previous health conditions as required under one of the clauses in the contract.
But the specific information they claimed should have been provided was the condition of pins and needles as a result of an unrelated pre-existing medical condition that he had made them aware of.
In October 2012 Nic passed away and his widow Susie faced the threat of losing the family home.
Susie was determined to fight the case and turned to the Financial Ombudsman Service (FOS) which can resolve complaints made against insurers and other companies in the financial sector.
She claimed that all significant health conditions had been declared and the fact that his pre-existing medical condition had side effects of pins and needles was not significant.
In April 2013 the Ombudsman supported Susie. The company paid out and the family received £100,000 plus interest.
Travel insurance
Barry and Jean Mustill from Tonbridge took out a travel insurance policy, for their holiday to New Zealand and Fiji.
The couple went on their six-week holiday of a lifetime in February 2012, but never made it to Fiji.
In New Zealand disaster struck when Jean was hospitalised with a potentially life threatening condition. The doctors believed she had a pulmonary embolism perhaps brought on by deep vein thrombosis.
After a week in hospital Jean was unable to continue their holiday but was declared fit to fly. There was only one destination for the couple - home.
The couple submitted their claim to the insurance company for £2,800 which covered the cost of their unused holiday to Fiji.
The couple were stunned when the insurance company initially claimed they would only pay for Jean's half of the holiday to Fiji because she was the only one who had been hospitalised and had to cut short her holiday.
After months of phone calls, emails and letters to the insurance company the couple were left £1,400 out of pocket.
The team at BBC's Rip Off Britain approached the insurance company and queried the decision.
The company claimed that there had been a 'misinterpretation of the policy wording' and fully investigated Barry and Jean's case.
The company finally settled the claim in May 2013. They apologised and paid Barry and Jean the full amount of £2,800.
Home insurance
Andrew Hill and his girlfriend Chaska Gaines took out home protection and buildings insurance in addition to their mortgage, when they bought a bungalow in Glastonbury.
After spending 12 months modernising it they were due to move in, but a neighbour's home caught fire which quickly spread to Andrew and Chaska's house.
When the couple submitted their claim on the policy the insurance company rejected it on the grounds that the house was not permanently lived in during the renovation.
Andrew insisted that when he bought the policy he had explained to the person who sold him the insurance exactly what he was planning to do with the house, and how often he would be there.
Andrew's dad Paul was also at the meeting with the broker and Paul confirmed Andrew's version of events.
Andrew turned to the Financial Ombudsman Service (FOS) to put forward his complaint.
In July 2012, the FOS reviewed the case and concluded Andrew's policy was mis-sold.
The company paid out in full in April 2013 and five months later Andrew and Chaska finally moved into their property.
Pet insurance
Peter Lewin from Dorset took out a premium pet insurance policy for his six-year-old pet Labradoodle, Bentley, to cover the cost of any veterinary care he would need.
When his annual renewal quote came through the post in October 2012 it was around £575, more than double the cost of the previous year's policy.
Peter paid for a pet insurance policy for the first time in November 2009 and it cost him just under £140.
Unfortunately, Bentley required treatment with a problem in his ear, so Peter made a claim for the veterinary payments and follow-up treatment. His policy increased by £50 the following year.
After two more years of no emergency treatments, Peter was shocked to see his renewal policy more than double in price.
He shopped around for a more affordable quote but this was harder than he thought.
Peter was told by the insurers he approached that they would not cover his pet for any condition he had previously been treated for and that he would not be fully covered.
Peter decided to opt for a policy with an alternative company at the cost of £250, half the cost of the renewal quote he received in 2012.
This decision means that Bentley is not fully covered for his pre-existing medical condition.
Choosing the right policy
Get some independent financial advice to make sure you and your family are properly protected.
You can find a local independent financial adviser by visiting Unbiased who provide an impartial service or via the Personal Finance Society which is a free advisor search service from the professional body for financial advisers in the UK.
Additionally, the government's Money Advice Service website sets out information on various financial products and how they work.
Source: BBC
Insurance may cost too much for smokers
Eric Jones has an incentive to end his trips to the party store for cigarette tubes and tobacco, the roll-your-own supplies used to fill his pack-a-day habit.
The 40-year-old has no health insurance from his $9-an-hour job at an ice-manufacturing plant in Lansing. Under the federal health care law, he’s eligible for help from the government to buy insurance.
But to qualify, he’ll almost certainly have to quit smoking.
A baseline insurance plan could cost Jones, who makes $22,000 working seasonally from February to November, $775 a year in premiums. Or he could pay no premiums in the cheapest plan, which has higher deductibles and copayments.
Yet if he keeps smoking, he could face an annual financial penalty ranging from $1,600 to $1,900 that will make coverage unaffordable. The numbers were estimated using the online Kaiser Health Reform Subsidy Calculator.
"I’d rather have health coverage than cigarettes, if it comes down to it," Jones said.
The law requires insurers to accept all applicants regardless of pre-existing medical problems. But it also allows them to charge smokers premiums that are up to 50 percent higher than those offered non-smokers — a way for insurers to ward off bad risks.
Nearly one of every five U.S. adults smokes. That share is higher among lower-income people such as Jones, who are more likely to work in jobs that do not offer health insurance and are a major reason the law was enacted. The smoking penalty has drawn criticism for effectively pricing people out of insurance.
At least in the interim, Jones may get some relief.
A glitch will limit penalties that insurers can charge smokers until it’s fixed next year. The government’s computer system has been unable to accommodate a provision that prevents companies from charging older customers more than three times what they charge younger adults and the provision letting smokers be charged higher premiums.
In addition, Jones and other smokers newly insured through exchanges or Medicaid will benefit from requirements that tobacco cessation treatments be covered.
Source: Associated Press
The 40-year-old has no health insurance from his $9-an-hour job at an ice-manufacturing plant in Lansing. Under the federal health care law, he’s eligible for help from the government to buy insurance.
But to qualify, he’ll almost certainly have to quit smoking.
A baseline insurance plan could cost Jones, who makes $22,000 working seasonally from February to November, $775 a year in premiums. Or he could pay no premiums in the cheapest plan, which has higher deductibles and copayments.
Yet if he keeps smoking, he could face an annual financial penalty ranging from $1,600 to $1,900 that will make coverage unaffordable. The numbers were estimated using the online Kaiser Health Reform Subsidy Calculator.
"I’d rather have health coverage than cigarettes, if it comes down to it," Jones said.
The law requires insurers to accept all applicants regardless of pre-existing medical problems. But it also allows them to charge smokers premiums that are up to 50 percent higher than those offered non-smokers — a way for insurers to ward off bad risks.
Nearly one of every five U.S. adults smokes. That share is higher among lower-income people such as Jones, who are more likely to work in jobs that do not offer health insurance and are a major reason the law was enacted. The smoking penalty has drawn criticism for effectively pricing people out of insurance.
At least in the interim, Jones may get some relief.
A glitch will limit penalties that insurers can charge smokers until it’s fixed next year. The government’s computer system has been unable to accommodate a provision that prevents companies from charging older customers more than three times what they charge younger adults and the provision letting smokers be charged higher premiums.
In addition, Jones and other smokers newly insured through exchanges or Medicaid will benefit from requirements that tobacco cessation treatments be covered.
Source: Associated Press
Sunday, 29 September 2013
New Policies a 23% Boost for Life Insurance Companies
By Francezka Nangoy
Life insurance companies’ revenues rose 23 percent in the first half of this year as more Indonesians took out policies for the first time.
Indonesia Life Insurance Association (AAJI), an industry group of life insurers said in a report released on Friday that revenues of 45 Indonesian life insurers rose by 22.9 percent to Rp 71.83 trillion in the first half this year, compared to the same period last year.
Revenue from premiums rose 14.5 percent to Rp 57.60 trillion in the first half, making up 80 percent of life insurers’ total revenues. Revenue from new premiums rose by 7.1 percent, while that from continued premiums rose by 31.3 percent.
The increase indicates more people are taking out new policies.
The number of insured people in Indonesia rose significantly by 54.6 percent to 87.19 million in the first half, AAJI head of communications Nini Sumohandoyo said in a statement.
"The increasing number of people covered by life insurance indicates improving public awareness about the benefits of life insurance," she said, but added that penetration rate is still very low.
Only about 5.3 percent of Indonesia’s 240 million people are insured individually. By comparison, Malaysia has a penetration rate of about 40 percent of its population, and about 30 percent Thailand’s population is insured, according to the national industry groups.
Meanwhile, insurance products linked to investment — called unit link — are one of the largest drivers of the industry’s growth.
According to AAJI chairman Hendrisman Rahim, unit link contributes 51.6 percent of incomes from new premiums and 62.3 percent of the income from continued premiums.
"Demand for unit link products is still relatively large because of its protection as well as investment benefit," he said.
Total yield on investment by AAJI members rose significantly by 78.4 percent to Rp 12.2 trillion amid volatility in the Indonesian capital markets, according to AAJI data.
Of a total Rp 245.18 trillion assets under management by life insurers, stock market investments rose 33 percent, mutual fund products grew 15 percent, while investment in debt papers soared by
118 percent.
These three instruments are insurers’ favorite investment destinations. Mutual funds comprise 30 percent of total assets, while stocks make up 29 percent and debt paper account for 25 percent.
Source: Jakata Globe
Life insurance companies’ revenues rose 23 percent in the first half of this year as more Indonesians took out policies for the first time.
Indonesia Life Insurance Association (AAJI), an industry group of life insurers said in a report released on Friday that revenues of 45 Indonesian life insurers rose by 22.9 percent to Rp 71.83 trillion in the first half this year, compared to the same period last year.
Revenue from premiums rose 14.5 percent to Rp 57.60 trillion in the first half, making up 80 percent of life insurers’ total revenues. Revenue from new premiums rose by 7.1 percent, while that from continued premiums rose by 31.3 percent.
The increase indicates more people are taking out new policies.
The number of insured people in Indonesia rose significantly by 54.6 percent to 87.19 million in the first half, AAJI head of communications Nini Sumohandoyo said in a statement.
"The increasing number of people covered by life insurance indicates improving public awareness about the benefits of life insurance," she said, but added that penetration rate is still very low.
Only about 5.3 percent of Indonesia’s 240 million people are insured individually. By comparison, Malaysia has a penetration rate of about 40 percent of its population, and about 30 percent Thailand’s population is insured, according to the national industry groups.
Meanwhile, insurance products linked to investment — called unit link — are one of the largest drivers of the industry’s growth.
According to AAJI chairman Hendrisman Rahim, unit link contributes 51.6 percent of incomes from new premiums and 62.3 percent of the income from continued premiums.
"Demand for unit link products is still relatively large because of its protection as well as investment benefit," he said.
Total yield on investment by AAJI members rose significantly by 78.4 percent to Rp 12.2 trillion amid volatility in the Indonesian capital markets, according to AAJI data.
Of a total Rp 245.18 trillion assets under management by life insurers, stock market investments rose 33 percent, mutual fund products grew 15 percent, while investment in debt papers soared by
118 percent.
These three instruments are insurers’ favorite investment destinations. Mutual funds comprise 30 percent of total assets, while stocks make up 29 percent and debt paper account for 25 percent.
Source: Jakata Globe
Non-Life Insurers Report 21,4 Percent Growth
By Taurai Mangudhla
ZIMBABWE'S non-life insurers reported a 21,4% growth in total after tax profit to US$7,38 million in the half year to June 30 2013, up from US$6,08 million in the previous comparative period, latest Insurance and Pensions Commission (Ipec) figures show.
In its 2013 second quarter report, Ipec said the increase in profit after tax, on short-term non-life insurers, was mainly attributable to increased levels of business written coupled with increases in unrealised gains emanating from the marking to market of the investment portfolios.
"Although the volumes of profit were on the upward trend the industry average return on equity deteriorated from 14,50% for the half year ended 30 June 2012 to 12,31% for the half year ended 30 June 2013 whilst return on assets remained at 4,33%," Ipec said.
For non-life reinsurers, total profit after tax amounted to US$5,62m for the half year compared to a negative US$1,72m reported within the same period in 2012 due to an increase in the volume of business and the decrease in operating expenses as well as incurred claims which amounted to US$2,1m and US$1,72m respectively.
Ipec said a total of three non-life insurers namely Tristar Insurance, KMFS Insurance, and Altfin Insurance reported losses during the half year period under review, compared to five insurers that reported losses for the half year to 30 June 2012.
"Notwithstanding the increase in overall profitability, underwriting profits decreased from US$6,60m for the half year ended June 30 2012 to US$5,36m for the period under review. The decrease in underwriting profits was mainly attributable to increases in net incurred claims from US$19,38m for the year to June 30 2012 to US$21,95m for the year to 30 June 2013," Ipec said.
The report said in line with the increase in net incurred claims, the industry average loss ratio deteriorated from 39,6% to 42,35% while the profitability of the non-life insurers' core business deteriorated as reflected by a decrease in the underwriting margin from 16,30% for the six months ended 30 June 2012 to 10,35% for the period under review.
Ipec said the deterioration was also reflected in the increase in the industry average combined ratio from 83,70% to 89,65%.
Non-life insurers' core business of underwriting remained the major source of business with investment income accounting for only 3,77% of net premium written.
Ipec said gross premiums written by direct non-life insurers for the half of the year amounted to US$117,82m, which indicates a 7,56% increase from US$109,53m reported in the comparative period in 2012.
Source: Zimbabwe Independent
ZIMBABWE'S non-life insurers reported a 21,4% growth in total after tax profit to US$7,38 million in the half year to June 30 2013, up from US$6,08 million in the previous comparative period, latest Insurance and Pensions Commission (Ipec) figures show.
In its 2013 second quarter report, Ipec said the increase in profit after tax, on short-term non-life insurers, was mainly attributable to increased levels of business written coupled with increases in unrealised gains emanating from the marking to market of the investment portfolios.
"Although the volumes of profit were on the upward trend the industry average return on equity deteriorated from 14,50% for the half year ended 30 June 2012 to 12,31% for the half year ended 30 June 2013 whilst return on assets remained at 4,33%," Ipec said.
For non-life reinsurers, total profit after tax amounted to US$5,62m for the half year compared to a negative US$1,72m reported within the same period in 2012 due to an increase in the volume of business and the decrease in operating expenses as well as incurred claims which amounted to US$2,1m and US$1,72m respectively.
Ipec said a total of three non-life insurers namely Tristar Insurance, KMFS Insurance, and Altfin Insurance reported losses during the half year period under review, compared to five insurers that reported losses for the half year to 30 June 2012.
"Notwithstanding the increase in overall profitability, underwriting profits decreased from US$6,60m for the half year ended June 30 2012 to US$5,36m for the period under review. The decrease in underwriting profits was mainly attributable to increases in net incurred claims from US$19,38m for the year to June 30 2012 to US$21,95m for the year to 30 June 2013," Ipec said.
The report said in line with the increase in net incurred claims, the industry average loss ratio deteriorated from 39,6% to 42,35% while the profitability of the non-life insurers' core business deteriorated as reflected by a decrease in the underwriting margin from 16,30% for the six months ended 30 June 2012 to 10,35% for the period under review.
Ipec said the deterioration was also reflected in the increase in the industry average combined ratio from 83,70% to 89,65%.
Non-life insurers' core business of underwriting remained the major source of business with investment income accounting for only 3,77% of net premium written.
Ipec said gross premiums written by direct non-life insurers for the half of the year amounted to US$117,82m, which indicates a 7,56% increase from US$109,53m reported in the comparative period in 2012.
Source: Zimbabwe Independent
Alaska's online insurance market set to debut
By BECKY BOHRER
The government's online health insurance marketplace is scheduled to go live Tuesday, allowing Alaskans to shop for private insurance and meet the requirements of the new federal health care law.
It's not clear just what the new marketplace will look like or how smooth the rollout will be, though the U.S. Department of Health and Human Services expects a fully functioning site to be operational Tuesday.
Officials note there are sometimes hiccups with major rollouts, but Tuesday isn't the deadline for anything — it's simply when the new insurance website is set to go online and people can begin browsing their options.
Under President Barack Obama's signature health care law, virtually everyone will be required to have health insurance as of Jan. 1. There are exemptions for financial hardships and religious objections, but those who ignore the mandate will face fines.
Those who select a plan by Dec. 15 can get coverage starting Jan. 1, while March 31 marks the end of open enrollment. Individuals can still enroll after that if they have a qualifying event such as job loss, birth or divorce, according to http://www.healthcare.gov , the government website where people will access the marketplace.
United Way of Anchorage and the Alaska Native Tribal Health Consortium recently received federal grants to act as so-called "navigators," to conduct outreach across Alaska and help promote the insurance markets. Joan Fisher, the lead navigator for United Way of Anchorage, said there's a lot of misinformation floating around and people scaring others.
"I think if there's a message to tell people it is, Obamacare or the Affordable Care Act, whatever you want to call it, is happening. It's going to happen Oct. 1. I don't think it's going to get defunded and you have an individual mandate to enroll in health insurance," Fisher said. "That's the law, and we can help you."
Fisher said the calls she's received so far are generally from people who have been eagerly waiting for this. They perhaps have been denied coverage for preexisting coverage and will now be able to get insurance, and they want to know the premium rates.
Figures released last week by the U.S. Health and Human Services Department show the average individual monthly premium for a benchmark policy known as the "second-lowest-cost silver" plan will be $474 for Alaska. Of the 48 states analyzed, only Wyoming's average premium was higher in that category, at $516.
Premiums, though, have long tended to be higher in Alaska, with one of the biggest drivers being health care costs, said state Insurance Director Bret Kolb. Alaska also is a relatively small state, population-wise, with limited competition among insurers.
Premera Blue Cross Blue Shield of Alaska, the largest health insurer in Alaska, is one of two companies offering plans on the insurance marketplace, along with Moda Health. Premera has more than 9,000 individual members in Alaska and expects that number to double over time, said Eric Earling, a spokesman for the company.
It's difficult to compare older policies with those offered on the new exchange, Earling said, citing in part a difference in benefit plans and rating structures. But he said his company is concerned about the overall affordability of policies.
Those whose income is low enough to qualify for a tax credit, or subsidy, "will probably get a great deal," he said, while others who qualify for a smaller subsidy or just exceed income guidelines for one might have a tougher time. Some will pay less, and some will pay more.
The idea behind the health care law is to create more competition and limit or drive down rising costs. Additional insurers can join the marketplace, or insurers can pull out.
While some states set up their own marketplaces, Alaska is among those who let the federal government do it. Gov. Sean Parnell had raised concerns about the unknowns surrounding the marketplaces and said "federally mandated programs should be paid for by federal dollars."
Source: Associated Press
The government's online health insurance marketplace is scheduled to go live Tuesday, allowing Alaskans to shop for private insurance and meet the requirements of the new federal health care law.
It's not clear just what the new marketplace will look like or how smooth the rollout will be, though the U.S. Department of Health and Human Services expects a fully functioning site to be operational Tuesday.
Officials note there are sometimes hiccups with major rollouts, but Tuesday isn't the deadline for anything — it's simply when the new insurance website is set to go online and people can begin browsing their options.
Under President Barack Obama's signature health care law, virtually everyone will be required to have health insurance as of Jan. 1. There are exemptions for financial hardships and religious objections, but those who ignore the mandate will face fines.
Those who select a plan by Dec. 15 can get coverage starting Jan. 1, while March 31 marks the end of open enrollment. Individuals can still enroll after that if they have a qualifying event such as job loss, birth or divorce, according to http://www.healthcare.gov , the government website where people will access the marketplace.
United Way of Anchorage and the Alaska Native Tribal Health Consortium recently received federal grants to act as so-called "navigators," to conduct outreach across Alaska and help promote the insurance markets. Joan Fisher, the lead navigator for United Way of Anchorage, said there's a lot of misinformation floating around and people scaring others.
"I think if there's a message to tell people it is, Obamacare or the Affordable Care Act, whatever you want to call it, is happening. It's going to happen Oct. 1. I don't think it's going to get defunded and you have an individual mandate to enroll in health insurance," Fisher said. "That's the law, and we can help you."
Fisher said the calls she's received so far are generally from people who have been eagerly waiting for this. They perhaps have been denied coverage for preexisting coverage and will now be able to get insurance, and they want to know the premium rates.
Figures released last week by the U.S. Health and Human Services Department show the average individual monthly premium for a benchmark policy known as the "second-lowest-cost silver" plan will be $474 for Alaska. Of the 48 states analyzed, only Wyoming's average premium was higher in that category, at $516.
Premiums, though, have long tended to be higher in Alaska, with one of the biggest drivers being health care costs, said state Insurance Director Bret Kolb. Alaska also is a relatively small state, population-wise, with limited competition among insurers.
Premera Blue Cross Blue Shield of Alaska, the largest health insurer in Alaska, is one of two companies offering plans on the insurance marketplace, along with Moda Health. Premera has more than 9,000 individual members in Alaska and expects that number to double over time, said Eric Earling, a spokesman for the company.
It's difficult to compare older policies with those offered on the new exchange, Earling said, citing in part a difference in benefit plans and rating structures. But he said his company is concerned about the overall affordability of policies.
Those whose income is low enough to qualify for a tax credit, or subsidy, "will probably get a great deal," he said, while others who qualify for a smaller subsidy or just exceed income guidelines for one might have a tougher time. Some will pay less, and some will pay more.
The idea behind the health care law is to create more competition and limit or drive down rising costs. Additional insurers can join the marketplace, or insurers can pull out.
While some states set up their own marketplaces, Alaska is among those who let the federal government do it. Gov. Sean Parnell had raised concerns about the unknowns surrounding the marketplaces and said "federally mandated programs should be paid for by federal dollars."
Source: Associated Press
Lagos State remits over N46.50bn pension contributions
Chuks Udo Okonta
The Pension contributions remitted by
the Lagos State Government stood at N46.50 billion as at July, Inspen has learnt.
Acting Director-General National
Pension Commission (PenCom) Chinelo Anohu-Amazu, who disclosed this in Lagos,
said the State had fully implemented the Contributory Pension Scheme (CPS), as
it has registered over 45,730 employees.
She noted that the State had also issued
retirement benefit bonds of N18.9 billion to its retirees and these bonds have
been fully redeemed and proceeds paid into the employees’ individual Retirement
Savings Accounts (RSAs); while 2,242 employees from the State have retired
under the Scheme as at August, 2013.
Benchmarking Lagos State with other
States in the South-West, Anohu-Amazu, said Osun State has adopted the CPS and
enacted its law in 2009, adding that the State had made significant progress in
its implementation of the CPS, having so far registered 45,106 employees under
the Scheme and remitted N4.15 billion as pension contributions, while the sum
of N1.90 billion had been remitted into the Retirement Benefits Bond Redemption
Fund Account.
She noted that Osun State is yet to
renew the Group Life Insurance Policy for its employees in 2013 and had also
not carried out an actuarial valuation to determine accrued pension rights of
employees.
She said: “With regards to Ogun State,
it adopted the CPS and enacted its law in 2007. It had also made significant
progress in its implementation of the CPS having so far registered 24,902
employees under the Scheme and remitted N10.90 billion as pension
contributions, while the sum of N3 billion had been remitted into the
Retirement Benefits Bond Redemption Fund Account held at the Central Bank of
Nigeria.
“However, the State is yet to put in
place a Group Life Insurance Policy for its employees. In the case of Ekiti
State, it enacted its law on the CPS in January, 2011 and has also 37,676
employees registered under the Scheme.
“Ekiti has conducted an actuarial
valuation to determine pension liabilities under the old scheme and put in
place a Group Life Insurance Policy for its employees. However, the State is
yet to commence remittance of pension contributions into employees RSAs with
PFAs.
“Oyo State has enacted its law on the
CPS in January, 2010. However, it is yet to commence the full implementation of
the CPS. Ondo State has only drafted a Bill on the CPS, a copy of which had
been reviewed by the Commission and comments duly forwarded to the State.”
She urged the States in the Zone that
have not completed necessary processes for full implementation of the CPS to
renew their commitment and fast track action on all outstanding issues to avail
their employees of its many benefits.
Saturday, 28 September 2013
Changes to insurance rules proposed
The Securities and Exchange Commission of Pakistan (SECP) has proposed draft amendments to the 2002 Insurance Rules, affecting the licensing of direct insurance brokers.
The proposed amendments have been published in the official gazette to elicit public comments, the SECP said in a statement on Friday.
Last date for the comments on the revisions is Oct 19.
The amendments deal with the exclusivity of the insurance broking licence, paid-up capital requirements, requirement to maintain a net asset value, registration and renewal fees, statutory deposit requirements, professional indemnity insurance requirements and fit and proper criteria for the directors and chief executives of insurance brokers.
Compared to similar jurisdictions, the current regulatory regime for insurance brokers in the country is relatively underdeveloped.
The framework, therefore, has been reviewed in the light of evolving market practices and global regulatory developments.
The regulatory regime for insurance brokers consists of the provisions prevailing from the primary law of the Insurance Ordinance of 2000 and the rules made there under.
Currently, there are nine registered insurance brokers, authorised to undertake the direct insurance broking, said Commissioner Insurance Mohammed Asif Arif in a statement.
He said that with the amendments, the insurance broking practices would be conducted with more sophistication and professionalism. "This will also lead to the overall protection of policyholders and further development of local insurance industry."
Source: Dawn
The proposed amendments have been published in the official gazette to elicit public comments, the SECP said in a statement on Friday.
Last date for the comments on the revisions is Oct 19.
The amendments deal with the exclusivity of the insurance broking licence, paid-up capital requirements, requirement to maintain a net asset value, registration and renewal fees, statutory deposit requirements, professional indemnity insurance requirements and fit and proper criteria for the directors and chief executives of insurance brokers.
Compared to similar jurisdictions, the current regulatory regime for insurance brokers in the country is relatively underdeveloped.
The framework, therefore, has been reviewed in the light of evolving market practices and global regulatory developments.
The regulatory regime for insurance brokers consists of the provisions prevailing from the primary law of the Insurance Ordinance of 2000 and the rules made there under.
Currently, there are nine registered insurance brokers, authorised to undertake the direct insurance broking, said Commissioner Insurance Mohammed Asif Arif in a statement.
He said that with the amendments, the insurance broking practices would be conducted with more sophistication and professionalism. "This will also lead to the overall protection of policyholders and further development of local insurance industry."
Source: Dawn
Flood insurance rates to rise October 1, 2013
By Tamara Hayes
On July 6, 2012 the Biggert-Waters Flood Insurance Reform Act was passed. The purpose was to recover losses to the government’s National Flood Insurance Program resulting from hurricanes. The federal government is the only entity in the flood insurance business; however, policies are administered by insurance agencies.
Effective October 1, 2013, every flood policyholder will get a 10 percent increase in rates. Also, home owners who own or purchase older homes in flood zones may see much higher rates. If you have a mortgage on your home, then you are required to purchase flood insurance. If you are a cash buyer and do not have a mortgage, then it is up to you if you want to purchase coverage or not.
Flood insurance rates are based on a variety of factors. The elevation of your home is a key factor. If you are obtaining a mortgage, the insurance company will require an elevation certificate. Other factors include type of building, number of floors, flood techniques such as breakaway walls and flood vents, as well as the property’s geographic location.
Here is a link to the new National Flood Insurance Program rates and guidelines http://www.fema.gov/media-library/assets/documents/34620%20%28October%20... One of the best resources for information on flooding, flood risk, and residential coverage is www.floodsmart.gov. If you are unsure of what your policy covers and what your new rates may be, contact your insurance agent today. If you are thinking of purchasing a home and want to know what the rates will be, the FloodSmart.gov web site has a One-Stop Flood Risk Profile form where you can enter the address of the property and it will provide you with the property risk, estimate of premiums and insurance agents to contact.
Source: Examiner
On July 6, 2012 the Biggert-Waters Flood Insurance Reform Act was passed. The purpose was to recover losses to the government’s National Flood Insurance Program resulting from hurricanes. The federal government is the only entity in the flood insurance business; however, policies are administered by insurance agencies.
Effective October 1, 2013, every flood policyholder will get a 10 percent increase in rates. Also, home owners who own or purchase older homes in flood zones may see much higher rates. If you have a mortgage on your home, then you are required to purchase flood insurance. If you are a cash buyer and do not have a mortgage, then it is up to you if you want to purchase coverage or not.
Flood insurance rates are based on a variety of factors. The elevation of your home is a key factor. If you are obtaining a mortgage, the insurance company will require an elevation certificate. Other factors include type of building, number of floors, flood techniques such as breakaway walls and flood vents, as well as the property’s geographic location.
Here is a link to the new National Flood Insurance Program rates and guidelines http://www.fema.gov/media-library/assets/documents/34620%20%28October%20... One of the best resources for information on flooding, flood risk, and residential coverage is www.floodsmart.gov. If you are unsure of what your policy covers and what your new rates may be, contact your insurance agent today. If you are thinking of purchasing a home and want to know what the rates will be, the FloodSmart.gov web site has a One-Stop Flood Risk Profile form where you can enter the address of the property and it will provide you with the property risk, estimate of premiums and insurance agents to contact.
Source: Examiner
Friday, 27 September 2013
WELCOME
ADDRESS BY CHINELO ANOHU-AMAZU, ACTING DIRECTOR GENERAL, NATIONAL PENSION
COMMISSION AT THE OFFICIAL OPENING OF THE SOUTH-WEST ZONAL OFFICE OF THE
COMMISSION AT NO. 88A ODUDUWA CRESCENT, GRA IKEJA, LAGOS
Protocol
I am greatly
honoured to welcome you all to the official opening of the South-West Zonal
Office of the Commission which is situated here in Lagos. I am particularly
pleased that you accepted our invitation amidst your highly engaging schedules.
We consider the presence of a large number of stakeholders at this event as a
testimony to the confidence reposed in the Contributory Pension Scheme and our
modest efforts at providing regulatory oversight on pension issues.
2. As you are
already aware, prior to the enactment of the Pension Reform Act (PRA 2004),
pension administration in the country was entangled in a myriad of challenges.
In the public sector which operated the defined benefit Pay-As-You-Go scheme,
some of the prominent challenges encountered included a lack of transparent
administration of pensions which resulted in the accumulation of huge pension
liabilities and inconsistent payment to retirees. In the private sector
however, most employees were not covered by any form of retirement benefit
arrangement. The PRA 2004 which sought to address in a holistic manner, the
perennial problems associated with pensions in both the public and private
sectors established the new Contributory Pension Scheme (CPS) and created the
National Pension Commission (PenCom) to regulate, supervise and ensure the
effective administration of pension matters in Nigeria. Central among its key
objectives are to: stem the growth of outstanding pension liabilities; ensure
that every person who has worked in either the public or private sector
receives his/her retirement benefits as and when due; establish a uniform set
of rules and regulations for the administration and payment of retirement
benefits in both the public and private sectors; and promote economic growth
through diversification of pension fund investment across financial and
productive sectors.
3.
Distinguished Ladies and Gentlemen, I am glad to inform you that the Commission
had remained steadfast in the implementation of the CPS such that within these
few years of existence some modest achievements have been realized. Foremost
among such achievements is the consistent payment of retirement benefits to all
employees who retired under the scheme since 2007 without the characteristic
bottlenecks experienced in the past. There is also the generation of a large
pool of investible funds of over N3.50 trillion invested in various financial
instruments, which marks a phenomenal growth when compared with huge estimated
pension liabilities in the public sector prior to the reform in 2004. Also,
5.61million contributors have been registered into the CPS since inception.
Furthermore, the process of a major amendment to the PRA 2004 is currently at
the final stages of consideration by the National Assembly. In addition, the
Commission had recently organized an Interactive Workshop in order to acquaint
Judges of the Superior Courts with the basic understanding of the CPS to enable
them adjudicate on pension matters effectively. The Commission has also
established a Call Centre which would be open to the public in October, 2013,
in order to enhance its service delivery through an efficient complaints
resolution process. Perhaps one of the significant achievements recorded by the
Commission is the reason for our gathering here today, which is the
establishment of Zonal Offices in all the six geo-political zones of the
country.
4. The
National Pension Commission embarked on the establishment of Zonal Offices in
all the six geo-political zones of the country in a bid to decentralize its
activities and bring it closer to the contributors and retirees. With our
presence in the South-West Zone now, we expect all stakeholders to avail
themselves of our services by visiting our office to make enquiries, lodge
complaints, and seek enlightenment on the Contributory Pension Scheme. Due to
our renewed focus on efficient service delivery, we seek to reduce the need for
contributors and retirees to travel from various parts of the country to Abuja
for the singular reason of accessing our services. In addition, our presence
would facilitate closer interaction with the States’ Pension offices by
assisting them to comply with the CPS. The South-West Zonal Office has a
mandate to effectively extend our services to all the six states in the zone,
namely; Ekiti, Lagos, Ogun, Ondo, Osun and Oyo.
5.
Distinguished guests, I am pleased to report that States in the South-West Zone
have made reasonable progress in the adoption and implementation of the CPS.
Indeed, the choice of Lagos State to host our South-West Zonal office stemmed
not only from its pre-eminent position as the economic nerve centre of the
country but was also justified by its record of being one of the pioneers in
implementation of the CPS, having enacted its law in 2007. The State had fully
implemented the CPS with a total of 45,730 employees registered and pension
contributions remittance of N46.50billion as at July, 2013. Furthermore, the
State had issued retirement benefit bonds of N18.9billion to its retirees and
these bonds have been fully redeemed and proceeds paid into the employees’
individual RSAs; while 2,242 employees from the State have retired under the
Scheme as at August, 2013. In the case
of Osun State, it adopted the CPS and enacted its law in 2009. It had also made
significant progress in its implementation of the CPS, having so far registered
45,106 employees under the Scheme. It had also remitted N4.15billion as pension
contributions, while the sum of N1.90billion had been remitted into the
Retirement Benefits Bond Redemption Fund Account. However, the State is yet to
renew the Group Life Insurance Policy for its employees in 2013 and had also
not carried out an actuarial valuation to determine accrued pension rights of
employees. With regards to Ogun State,
it adopted the CPS and enacted its law in 2007. It had also made significant
progress in its implementation of the CPS having so far registered 24,902
employees under the Scheme and remitted N10.90billion as pension contributions,
while the sum of N3billion had been remitted into the Retirement Benefits Bond
Redemption Fund Account held at the Central Bank of Nigeria. However, the State
is yet to put in place a Group Life Insurance Policy for its employees. In the
case of Ekiti State, it enacted its law on the CPS in January, 2011 and has
also 37,676 employees registered under the Scheme. Ekiti has conducted an
actuarial valuation to determine pension liabilities under the old scheme and
put in place a Group Life Insurance Policy for its employees. However, the
State is yet to commence remittance of pension contributions into employees
RSAs with PFAs. Oyo State, has enacted its law on the CPS in January, 2010.
However, it is yet to commence the full implementation of the CPS. Ondo State
has only drafted a Bill on the CPS, a copy of which had been reviewed by the
Commission and comments duly forwarded to the State. I therefore wish to use
this occasion to passionately appeal to the States in the Zone that have not
completed necessary processes for full implementation of the CPS to renew their
commitment and fast track action on all outstanding issues in order to avail
their employees of its many benefits. The Commission’s Zonal Office is
positioned to facilitate the States’ full compliance with the CPS and provide
necessary guidance.
6. As part of
ongoing efforts at enhancing contributors’ satisfaction, the Commission is
currently exploring the possibility of allowing contributors to utilize part of
their Retirement Savings Account balances to part-finance the acquisition of
low-cost houses. It is our expectation that when they eventually come on
stream, these facilities would be availed to States that have fully implemented
the Scheme. The Commission had also reviewed its Investment Regulations with a
view to facilitating the investment of pension funds towards reducing the huge
infrastructure gap in the country. It is worthy to mention that already several
states in the federation have so far benefited from the pool of funds generated
by the CPS through the issuance of development bonds. As at June, 2013, the
value of pension funds’ investment in State Government Bonds was
N169.73billion. Most of the States have utilized proceeds from these
investments towards the provision of vital infrastructure for the well being of
their citizens.
6. Once again, on behalf of the entire
Management and Staff of the National Pension Commission, I wish to express our
appreciation to all of you for sparing time to attend the official opening of
the South-West Zonal Office, Lagos.
Thank you and God bless you all.
IEI enhances service delivery with customers care centre
Chuks Udo Okonta
International Energy Insurance Plc (IEI)
has set up customers care centre to enhance its interaction with customers and
the general public.
Its Managing
Director/Chief Executive Officer, Mrs. Roseline Ekeng, said the setting up of
the customer care unit will strengthen the level of interaction between the
firm and the public, adding that having the unit within the system is of
necessity to optimally serve the firm’s customers.
She said: “NAICOM’s mandate for compulsory
insurances has opened up a huge opportunity for retail and micro insurance business
which IEI wants to tap into with the aid of technology. Retail business remains
one of the best ways to create massive insurance penetration in Nigeria”.
She said the recent regulatory mandate that
made Third Party Motor, Owners/Occupiers Liability, Professional Indemnity
insurances compulsory, has also created a retail business opportunity for the
insurance industry, stressing that in a strategic response to meet that need, IEI
Plc which underwrites energy and general business, recently introduced the IEI
Third Party motor Scratch Cards for private motor, trucks and motorcycles.
She said
the scratch cards system which is deployed through an online platform, provides
a channel through which the general public could have access to genuine third
party motor insurance.
Ekeng said IEI believes that this third
party motor insurance online platform should be powered by technology and
seamless customer service, hence the need for a vibrant call center that will
swiftly respond to consumer challenges.
She noted that the IEI call centre is fully
equipped with IP PBN solution and a high class Customer Interaction Management
Solution Software, a CRM Microsoft license and a full service support from
Ameyo
She said the unit is handled by very
experienced hands trained by CRM specialists, adding that the essence for a top
class Call Center is to create very useful customer information and insight,
that will become very handy for technology based product development.
She noted that the online platform would
really help take insurance to the public, adding that IEI Third Party motor
insurance Online Scratch Cards come in different denominations and costs and
that the company’s objective is to make genuine third party motor insurance
accessible and affordable to all.
On how to obtain and pay for the service, she
urged the public to log on to www.ieiplc.com,
select their card type, complete the form and click on continue, thereafter,
click on pay with scratch card or ATM card and then print their
certificate.
Thursday, 26 September 2013
German banks seek tighter service ties to insurers
German banks are seeking close partnerships with insurers and pension funds as both sides desperately try to boost revenue against a backdrop of persistently low interest rates.
Germany's second-biggest lender Commerzbank on Wednesday touted its services to meet the long-term investment needs of insurers, while public sector landesbank rival NordLB unveiled a pact with pension fund Bayerische Versorgungskammer to offer commercial real estate loans.
Rock bottom interest rates, aimed at propping up an economy still dazed from the financial crisis, have kept a lid on traditional interest income at banks and insurers, forcing both to search out alternatives and opening up prospects for cooperation.
"There are areas where we can work very closely together, particularly in alternative investments" Commerzbank board member Michael Reuther told a capital market conference targeted at insurers and pension funds.
Banks normally focus on lending for short to medium-term projects while insurers are interested in long-term investments of seven years or more, which they use to help match obligations to policy holders that can run over decades.
NordLB property lending unit Deutsche Hypo and Bayerische Versorgungskammer each plan to kick in 50 percent of the financing for commercial real estate loans to be made by Hypo in future, in a deal Hypo board member Andreas Pohl said was a "first" in the German market.
The deal, in which the two partners have an initial target volume of 500 million euros ($675 million), will allow Hypo to lend more than it could on its own, while still cutting the bank's regulatory capital burden, Pohl said.
Bayerische Versorgungskammer said the arrangement not only gave it access to a secure asset class but also allowed it to diversify its investment portfolio, something that has been a central demand of international regulators post-crisis.
Commerzbank's Reuther cited his bank's loan partnering programme with French insurer Axa, which offers financing to medium-sized companies in Germany, Austria and Switzerland, as one example that has already won supervisory approval.
Germany's massive shift toward renewable energy and away from nuclear power would need to be financed not just with debt but with equity, he added, opening up another opportunity for long-term oriented investors.
Commerzbank was working on long-duration deals sought by insurers, particularly in the area of aircraft financing, and was also offering a service to more efficiently clear derivative trades, he said.
Europe's biggest insurer, Allianz has also increased its focus on alternative investments, including commercial real estate financing.
While many bankers see the increasing presence of insurers and pension funds in property and corporate lending as an incursion that threatens margins in an already difficult business environment, Commerzbank clearly touted cooperation.
"Let's see what we can do together to meet our targets in this risk rich but return poor environment," Reuther said.
By Jonathan Gould and Andreas Kroener; editing by David Evans
Source: Reuters
Germany's second-biggest lender Commerzbank on Wednesday touted its services to meet the long-term investment needs of insurers, while public sector landesbank rival NordLB unveiled a pact with pension fund Bayerische Versorgungskammer to offer commercial real estate loans.
Rock bottom interest rates, aimed at propping up an economy still dazed from the financial crisis, have kept a lid on traditional interest income at banks and insurers, forcing both to search out alternatives and opening up prospects for cooperation.
"There are areas where we can work very closely together, particularly in alternative investments" Commerzbank board member Michael Reuther told a capital market conference targeted at insurers and pension funds.
Banks normally focus on lending for short to medium-term projects while insurers are interested in long-term investments of seven years or more, which they use to help match obligations to policy holders that can run over decades.
NordLB property lending unit Deutsche Hypo and Bayerische Versorgungskammer each plan to kick in 50 percent of the financing for commercial real estate loans to be made by Hypo in future, in a deal Hypo board member Andreas Pohl said was a "first" in the German market.
The deal, in which the two partners have an initial target volume of 500 million euros ($675 million), will allow Hypo to lend more than it could on its own, while still cutting the bank's regulatory capital burden, Pohl said.
Bayerische Versorgungskammer said the arrangement not only gave it access to a secure asset class but also allowed it to diversify its investment portfolio, something that has been a central demand of international regulators post-crisis.
Commerzbank's Reuther cited his bank's loan partnering programme with French insurer Axa, which offers financing to medium-sized companies in Germany, Austria and Switzerland, as one example that has already won supervisory approval.
Germany's massive shift toward renewable energy and away from nuclear power would need to be financed not just with debt but with equity, he added, opening up another opportunity for long-term oriented investors.
Commerzbank was working on long-duration deals sought by insurers, particularly in the area of aircraft financing, and was also offering a service to more efficiently clear derivative trades, he said.
Europe's biggest insurer, Allianz has also increased its focus on alternative investments, including commercial real estate financing.
While many bankers see the increasing presence of insurers and pension funds in property and corporate lending as an incursion that threatens margins in an already difficult business environment, Commerzbank clearly touted cooperation.
"Let's see what we can do together to meet our targets in this risk rich but return poor environment," Reuther said.
By Jonathan Gould and Andreas Kroener; editing by David Evans
Source: Reuters
Life insurance may become unviable in Europe as low rates bite
By Chris Vellacott; editing by Laurence Fletcher and Jane Merriman
Life insurance is becoming an unviable business in Europe as low interest rates reduce insurers' profits, forcing many to compensate with higher-risk investments or move overseas, according to an industry survey.
A survey by law firm Linklaters of 100 top executives running Europe's largest insurers published on Thursday found 55 percent believe it may become impossible to provide affordable life cover in Europe.
Low interest rates pressure profits at insurance companies because they drive down returns on their investments, such as bonds, which traditionally are a core part of their portfolios.
To compensate, insurers must either raise premiums or allocate more money to alternative assets such as stocks, which can be more volatile than bonds.
Central banks around the developed world have held interest rates at ultra-low levels since the financial crisis in the hope that cheaper money will spur economic recovery.
The Linklaters research found 47 percent of insurers do not consider Europe a viable market for life insurance and 46 percent have pursued riskier investments to counteract the impact of low interest rates.
A third of respondents have shifted their focus to other markets while more than a fifth have plans to follow them within three years.
"We are already seeing firms looking outside Europe's established markets for profitability, seeking higher returns in Turkey, Asia, Africa and Latin America," said Victoria Sander, Linklaters' global insurance sector co-leader.
"This could leave a hole in the market closer to home."
Europe's insurance industry is dominated by companies such as Germany's Allianz (ALVG.DE), Italy's Generali (GASI.MI), France's Axa (AXAF.PA) and British firms Prudential (PRU.L) and Aviva (AV.L).
Source: Reuters
Life insurance is becoming an unviable business in Europe as low interest rates reduce insurers' profits, forcing many to compensate with higher-risk investments or move overseas, according to an industry survey.
A survey by law firm Linklaters of 100 top executives running Europe's largest insurers published on Thursday found 55 percent believe it may become impossible to provide affordable life cover in Europe.
Low interest rates pressure profits at insurance companies because they drive down returns on their investments, such as bonds, which traditionally are a core part of their portfolios.
To compensate, insurers must either raise premiums or allocate more money to alternative assets such as stocks, which can be more volatile than bonds.
Central banks around the developed world have held interest rates at ultra-low levels since the financial crisis in the hope that cheaper money will spur economic recovery.
The Linklaters research found 47 percent of insurers do not consider Europe a viable market for life insurance and 46 percent have pursued riskier investments to counteract the impact of low interest rates.
A third of respondents have shifted their focus to other markets while more than a fifth have plans to follow them within three years.
"We are already seeing firms looking outside Europe's established markets for profitability, seeking higher returns in Turkey, Asia, Africa and Latin America," said Victoria Sander, Linklaters' global insurance sector co-leader.
"This could leave a hole in the market closer to home."
Europe's insurance industry is dominated by companies such as Germany's Allianz (ALVG.DE), Italy's Generali (GASI.MI), France's Axa (AXAF.PA) and British firms Prudential (PRU.L) and Aviva (AV.L).
Source: Reuters
Profit up 600% to N515m at UBA Metropolitan Life
By: Modestus Anaesoronye
Life specialist underwriting firm, UBA Metropolitan Life Insurance Limited has recorded more than 600 percent growth in Profit after tax (PAT) for the financial year ending December 31, 2012, moving from a loss position of N93.85 million in 2011 to N501.14 million in 2012, while profit before tax also rose from a negative N69.26 million in the previous year to N515.46 million.
The account recently approved by the National Insurance Commission (NAICOM) is in line with the International Financial Reporting Standard (IFRS), which insurance companies and other quoted firms are expected to adopt beginning from 2012 financial year. Investigation also reveals that UBA metropolitan Life is one of the very few Companies that NAICOM has approved their 2012 Financials.
A further analysis of the result shows a substantial growth in investment income which rose from N318.32 million in 2011 to N575.62 million in the review year, indicating an 80.83 percent increase. Gross written premium also moved from N1.78 billion in 2011 to N2.01 billion.
Henry Ationu, executive director, Business Development, UBA Metropolitan Life said the return to profitability is following improved strategies in the company’s growth plan, which has seen appreciable performance in Prompt Claims payment, product distribution and service delivery across products and channels.
There has also been significant increase in customer loyalty and patronage due to the high level of confidence reposed on the Company’s Brand over the years.
At the close of business in 2012, the company’s assets stood at N5.41 billion as against N4.19 billion recorded in the previous year.
Source: Businessday
Life specialist underwriting firm, UBA Metropolitan Life Insurance Limited has recorded more than 600 percent growth in Profit after tax (PAT) for the financial year ending December 31, 2012, moving from a loss position of N93.85 million in 2011 to N501.14 million in 2012, while profit before tax also rose from a negative N69.26 million in the previous year to N515.46 million.
The account recently approved by the National Insurance Commission (NAICOM) is in line with the International Financial Reporting Standard (IFRS), which insurance companies and other quoted firms are expected to adopt beginning from 2012 financial year. Investigation also reveals that UBA metropolitan Life is one of the very few Companies that NAICOM has approved their 2012 Financials.
A further analysis of the result shows a substantial growth in investment income which rose from N318.32 million in 2011 to N575.62 million in the review year, indicating an 80.83 percent increase. Gross written premium also moved from N1.78 billion in 2011 to N2.01 billion.
Henry Ationu, executive director, Business Development, UBA Metropolitan Life said the return to profitability is following improved strategies in the company’s growth plan, which has seen appreciable performance in Prompt Claims payment, product distribution and service delivery across products and channels.
There has also been significant increase in customer loyalty and patronage due to the high level of confidence reposed on the Company’s Brand over the years.
At the close of business in 2012, the company’s assets stood at N5.41 billion as against N4.19 billion recorded in the previous year.
Source: Businessday
Wednesday, 25 September 2013
The pitfalls of life insurance
RICHARD MEADOWS
Jane Hall says her father Leslie was a "loving and wonderful man".
After being diagnosed with a brain tumour in 1996, he was given three to six months to live.
Leslie's illness stopped him from communicating, meaning his family had no idea he'd cancelled all his life insurance policies just four months beforehand.
When he died shortly afterwards, the grieving process was made even more difficult by the unexpected shock of losing everything.
"We had to find money for even a funeral - we didn't have anything," says Hall.
"The man who had always been the rock in our family had failed us at the last moment."
Today, her elderly mother rents a tiny one-bedroom house that "you couldn't swing a mouse in".
"She's struggling for money, and she's just turned 80," says Hall.
"Why would anyone want to put someone in that situation?"
This grim lesson is the reason why you'd be hard-pressed to find anyone more passionate about life insurance than Hall.
As a financial and insurance adviser at Getalife NZ, she wants us to learn from her dad's mistake - and from the mistakes of hundreds of other clients.
Last week, we covered the basics of life insurance - who should get it, how much, and what type to buy.
This week we're identifying the top pitfalls you need to avoid so you don't leave your loved ones in the lurch.
1. Cancelling when times are tough
Hall says she can't count the number of times she's seen people cancel policies, only for disaster to strike just weeks or months later.
Her own dad was trying to get on top of mounting bills, but hadn't talked to anyone.
"Even if he had only had enough to pay for the mortgage, the difference to my mother would have been enormous," says Hall.
Insurance premiums can be expensive, but it's better to explore all options before doing anything drastic.
2. Going it alone
It's absolutely vital to go and see a financial adviser or insurance broker, says Hall.
Working out the best coverage for you is the easy bit. A broker's real value lies in fighting your corner when it's time to collect.
"That is what we're paid for," says Hall. "We don't sell insurance - we sell claims."
The layperson simply doesn't have the experience to navigate the complicated contracts and arcane practices of insurance companies.
Hall says a good adviser will fight "tooth and claw" for you, spending hours on the phone or in person to make sure everything goes smoothly.
3. Choosing a bad broker
That being said, you need to choose carefully.
Insurance is the one area where even independent advisers are still paid through commissions, rather than charging a fee.
"A broker will usually get a higher commission if they sell most of their business through one insurance company," says Hall.
This is incredibly important, because the difference in premiums between companies can vary by more than 50 per cent.
Hall says you need to ask your adviser exactly what relationships they have.
Request a disclosure statement if one isn't offered to you, and check they're registered by searching here.
Hall even suggests asking if you can call previous clients for references. This is not a relationship to be taken lightly, so do your homework.
4. Being under-insured
"In all my years as a financial and insurance advisor, I have never handed a grieving loved one a cheque that contained too much money," says Hall.
Most people don't realise they're under-insured until it's too late.
Circumstances change over time. If you're on a renewable annual policy, re-assess the amount of coverage you need each year.
5. Being over-insured
You need to find the Goldilocks zone when buying insurance- it has to be just right.
You don't want to be caught short at claim time, but you also don't want to be wasting money.
"I've seen people who have $2m or $3m worth of life cover and nothing else," says Hall. "If they become sick, what's going to happen?"
ACC doesn't cover illness, so you'd probably end up losing your house and having to cancel the life insurance anyway.
It's important not to go overboard in any one category, and be sure you have a balance of trauma or income protection insurance too.
6. Letting lawyers get involved
Nothing adds to the stress of a family member dying like lawyers circling during a time of financial difficulty.
One of Hall's acquaintances lost her husband after a major heart attack. The policy was recorded in his name, which meant it was dealt with as part of his estate.
The money took nearly 18 months to come through, and legal fees ate up $25,000 of the modest $150,000 policy.
Hall says you need to make sure the policy's beneficiary is actually named or jointly named on the document.
"[That way] the surviving owner will get the money immediately. There's no lawyers involved."
7. Fudging your history
When you first take out life insurance you'll be asked a bunch of probing questions about your age, health and medical history.
Pinnacle Life partner Ed Saul says you need to answer fully and honestly.
No matter how tempting it might be to get cheaper premiums by knocking 10kg off your weight, it'll come back to bite you on the bum.
"If you die of lung cancer but you declared you were a non-smoker, they'll want to look into that," says Saul.
In many cases, all it takes is a trawl through your medical records.
The website of the Insurance and Savings Ombudsman (ISO) is riddled with case studies of claims that were declined because of non-disclosure.
Often they relate to things which applicants simply didn't think were relevant or worth mentioning. If in doubt, disclose it.
8. Pre-existing conditions
Insurance companies will often exclude any pre-existing health problems you have, so you need continuous cover.
If you're changing providers, don't cancel your old policy until you're covered with the new company.
9. Not reading your contract: Adrenaline junkies
Common exclusions include refusing to cover deaths caused by extreme sports, like mountain-climbing or hang-gliding.
There's not much adrenaline junkies can do about this, expect perhaps see if you can find a more tolerant insurer.
10. Not reading your contract: Boozehounds
The same can apply to alcohol-related deaths, so make sure you know where you stand.
Judy (not her real name) died in 2011 after falling down a flight of stairs at home.
The insurance company rejected her hubby's claim because she was under the influence of alcohol - a specific policy exclusion.
He tried to argue that alcohol hadn't contributed to Judy's death, but the autopsy found she had a blood alcohol level three times the legal adult driving limit.
The dispute went to the ISO, which ruled in the favour of the insurance company.
If you recognise you're a big boozer and could meet your end in the bottom of a bottle, then maybe it's worth looking for a less puritan policy provider.
11. Not reading your contract - Speed demons
There's another common exclusion for any illegal activities. It's fair enough that you won't be covered for gangland gun battles or a fatal cocaine habit.
But even the most borderline behaviour can be classed as illegal.
In 2003, Madeline died in a car crash when her vehicle left the road. Her insurer declined the claim on the basis that she was driving too fast and in a dangerous manner.
When the ISO reviewed the deposition, it found there was no conclusive evidence that Madeline was speeding.
However, it still decided she was driving in a way which was, "or might have been", dangerous to the public.
The claim wasn't upheld.
Hall says the vast majority of life insurance claims do get paid out.
"You only hear about the claims that don't go through. There are thousands and thousands more that do."
Nevertheless, it's important to know the various ways in which insurers might try to wriggle out of paying.
You also need to make sure you don't blot the copybook - leaving your family up the proverbial creek in their time of need.
- © Fairfax NZ News
Jane Hall says her father Leslie was a "loving and wonderful man".
After being diagnosed with a brain tumour in 1996, he was given three to six months to live.
Leslie's illness stopped him from communicating, meaning his family had no idea he'd cancelled all his life insurance policies just four months beforehand.
When he died shortly afterwards, the grieving process was made even more difficult by the unexpected shock of losing everything.
"We had to find money for even a funeral - we didn't have anything," says Hall.
"The man who had always been the rock in our family had failed us at the last moment."
Today, her elderly mother rents a tiny one-bedroom house that "you couldn't swing a mouse in".
"She's struggling for money, and she's just turned 80," says Hall.
"Why would anyone want to put someone in that situation?"
This grim lesson is the reason why you'd be hard-pressed to find anyone more passionate about life insurance than Hall.
As a financial and insurance adviser at Getalife NZ, she wants us to learn from her dad's mistake - and from the mistakes of hundreds of other clients.
Last week, we covered the basics of life insurance - who should get it, how much, and what type to buy.
This week we're identifying the top pitfalls you need to avoid so you don't leave your loved ones in the lurch.
1. Cancelling when times are tough
Hall says she can't count the number of times she's seen people cancel policies, only for disaster to strike just weeks or months later.
Her own dad was trying to get on top of mounting bills, but hadn't talked to anyone.
"Even if he had only had enough to pay for the mortgage, the difference to my mother would have been enormous," says Hall.
Insurance premiums can be expensive, but it's better to explore all options before doing anything drastic.
2. Going it alone
It's absolutely vital to go and see a financial adviser or insurance broker, says Hall.
Working out the best coverage for you is the easy bit. A broker's real value lies in fighting your corner when it's time to collect.
"That is what we're paid for," says Hall. "We don't sell insurance - we sell claims."
The layperson simply doesn't have the experience to navigate the complicated contracts and arcane practices of insurance companies.
Hall says a good adviser will fight "tooth and claw" for you, spending hours on the phone or in person to make sure everything goes smoothly.
3. Choosing a bad broker
That being said, you need to choose carefully.
Insurance is the one area where even independent advisers are still paid through commissions, rather than charging a fee.
"A broker will usually get a higher commission if they sell most of their business through one insurance company," says Hall.
This is incredibly important, because the difference in premiums between companies can vary by more than 50 per cent.
Hall says you need to ask your adviser exactly what relationships they have.
Request a disclosure statement if one isn't offered to you, and check they're registered by searching here.
Hall even suggests asking if you can call previous clients for references. This is not a relationship to be taken lightly, so do your homework.
4. Being under-insured
"In all my years as a financial and insurance advisor, I have never handed a grieving loved one a cheque that contained too much money," says Hall.
Most people don't realise they're under-insured until it's too late.
Circumstances change over time. If you're on a renewable annual policy, re-assess the amount of coverage you need each year.
5. Being over-insured
You need to find the Goldilocks zone when buying insurance- it has to be just right.
You don't want to be caught short at claim time, but you also don't want to be wasting money.
"I've seen people who have $2m or $3m worth of life cover and nothing else," says Hall. "If they become sick, what's going to happen?"
ACC doesn't cover illness, so you'd probably end up losing your house and having to cancel the life insurance anyway.
It's important not to go overboard in any one category, and be sure you have a balance of trauma or income protection insurance too.
6. Letting lawyers get involved
Nothing adds to the stress of a family member dying like lawyers circling during a time of financial difficulty.
One of Hall's acquaintances lost her husband after a major heart attack. The policy was recorded in his name, which meant it was dealt with as part of his estate.
The money took nearly 18 months to come through, and legal fees ate up $25,000 of the modest $150,000 policy.
Hall says you need to make sure the policy's beneficiary is actually named or jointly named on the document.
"[That way] the surviving owner will get the money immediately. There's no lawyers involved."
7. Fudging your history
When you first take out life insurance you'll be asked a bunch of probing questions about your age, health and medical history.
Pinnacle Life partner Ed Saul says you need to answer fully and honestly.
No matter how tempting it might be to get cheaper premiums by knocking 10kg off your weight, it'll come back to bite you on the bum.
"If you die of lung cancer but you declared you were a non-smoker, they'll want to look into that," says Saul.
In many cases, all it takes is a trawl through your medical records.
The website of the Insurance and Savings Ombudsman (ISO) is riddled with case studies of claims that were declined because of non-disclosure.
Often they relate to things which applicants simply didn't think were relevant or worth mentioning. If in doubt, disclose it.
8. Pre-existing conditions
Insurance companies will often exclude any pre-existing health problems you have, so you need continuous cover.
If you're changing providers, don't cancel your old policy until you're covered with the new company.
9. Not reading your contract: Adrenaline junkies
Common exclusions include refusing to cover deaths caused by extreme sports, like mountain-climbing or hang-gliding.
There's not much adrenaline junkies can do about this, expect perhaps see if you can find a more tolerant insurer.
10. Not reading your contract: Boozehounds
The same can apply to alcohol-related deaths, so make sure you know where you stand.
Judy (not her real name) died in 2011 after falling down a flight of stairs at home.
The insurance company rejected her hubby's claim because she was under the influence of alcohol - a specific policy exclusion.
He tried to argue that alcohol hadn't contributed to Judy's death, but the autopsy found she had a blood alcohol level three times the legal adult driving limit.
The dispute went to the ISO, which ruled in the favour of the insurance company.
If you recognise you're a big boozer and could meet your end in the bottom of a bottle, then maybe it's worth looking for a less puritan policy provider.
11. Not reading your contract - Speed demons
There's another common exclusion for any illegal activities. It's fair enough that you won't be covered for gangland gun battles or a fatal cocaine habit.
But even the most borderline behaviour can be classed as illegal.
In 2003, Madeline died in a car crash when her vehicle left the road. Her insurer declined the claim on the basis that she was driving too fast and in a dangerous manner.
When the ISO reviewed the deposition, it found there was no conclusive evidence that Madeline was speeding.
However, it still decided she was driving in a way which was, "or might have been", dangerous to the public.
The claim wasn't upheld.
Hall says the vast majority of life insurance claims do get paid out.
"You only hear about the claims that don't go through. There are thousands and thousands more that do."
Nevertheless, it's important to know the various ways in which insurers might try to wriggle out of paying.
You also need to make sure you don't blot the copybook - leaving your family up the proverbial creek in their time of need.
- © Fairfax NZ News
Tuesday, 24 September 2013
NAICOM’s Deputy Commissioner (Technical) Hassan passes on
 |
| Ibrahim Hassan |
Chuks
Udo Okonta
The Deputy
Commissioner (Technical) National Insurance Commission (NAICOM) Ibrahim Hassan,
died yesterday in Abuja, Inspen has learnt.
Information
from the commission stated that he died after a brief illness. Before his
death, Hassan was instrumental to the various reforms that had been experienced
in the commission.
According
to his profile obtained from NAICOM, he had vast experience in legal and
underwriting issues spanning over 28 years. A highly experienced and versatile
technocrat, he had, at different times, held other top management positions in
different organisations.
He
joined the Nigeria National Shipping Line Ltd (NNSL) in 1988 as an Assistant
Company Secretary/Legal Adviser and rose to become the General Manager,
Legal/Secretarial in 1995.
In
1995, he joined NICON Insurance Plc. as an Assistant General Manager (Marine)
and by 1996; he became the AGM in charge of Marine and Aviation. He was
seconded to Inland Containers Ltd in 1997 as the Sole Administrator. By March
1998, he returned to NICON and was promoted Deputy General Manager (Special
Risks).
Ibrahim
Hassan was first appointed Deputy Commissioner (Technical) of NAICOM by the
Federal Government in October 1999. But his stay in NAICOM lasted barely a year
when he returned to NICON in 2000 and was appointed Executive Director (Special
Risks) covering Marine, Aviation, Oil and Gas. He rose to become the acting
Managing Director of the corporation for three months in 2004.
In
March 2004, Hassan was appointed Managing Director and Chief Executive of the
Federal Housing Authority (FHA) in acting capacity. He was confirmed the
substantive MD/CEO in October of the same year. He disengaged from FHA in March
2007.
Hassan
was a Lawyer and an Associate of the Chartered Insurance Institute of London
(ACII). He was an Alumnus of Ahmadu Bello University, Zaria and the CII College
of Insurance, Kent-Sevenoaks, United Kingdom.
NCRIB prepares brokers for easy transition to IFRS
 |
|
President Nigerian Council of Registered Insurance Brokers (NCRIB) Laide
Osijo; Chairman Lagos Area Committee of the NCRIB, Patrick Ikponmwosa and his predecessor,
Tunde Oguntade at the event.
Chuks Udo Okonta
The Nigerian Council of Registered Insurance Brokers (NCRIB)
is working assiduously to assist members towards compliance with International
Financial Reporting Standard (IFRS) through share service scheme, its outgoing President,
Mrs Laide Osijo, has said.
She disclosed this today Tuesday, at the Farewell Lunch for
Insurance Journalists in Lagos. She noted that in view of the need to adapt to
the changing global business and financial dynamics, the council under her
administration has complied with the international financial reporting
standard, adding that the financial statement of the council for year 2013 is
being reported using the IFRS specifications.
Osijo said: “It is heartening to report that the financial
statement of the council for year 2013 is being reported using the IFRS
specifications. In a similar vein, the council, under my administration
established the Internal Audit Department and employed qualified auditors to
man the Audit and Compliance Unit of the secretariat.
“It is noteworthy that through the efforts of the
department, an operational manual has been evolved to enhance smooth operation
of all the departments of the council. The council is working assiduously to
assist members towards compliance with IFRS through shared service scheme.”
She noted that aside helping brokers to align with
international best practices, her administration has also created a platform to
expose brokers to opportunities in other sectors, adding that the maiden
edition of the platform tagged: Investment Platform was recently, hosted by UAC
Property Development Company Plc.
|
NAICOM approves 13 insurers accounts
Chuks Udo Okonta
The National Insurance Commission (NAICOM) has approved the 2012
accounts of 13 underwriters out of the 35 firms that have submitted their
financial reports, Inspen has learnt.
The commission noted that as at
Monday, September 16, it has approved the accounts of Mansard Insurance
Plc; ADIC Insurance Limited; WAPIC Insurance Plc; Consolidated Hallmark
Insurance; Oasis Insurance Plc, FBN Life Assurance Limited and Continental
Reinsurance Company Plc.
Others are AIICO Insurance Plc, Leadway Assurance Company Limited,
Crusader General Insurance Limited, Crusader Life Insurance Limited, UBA
Metropolitan Life Insurance Company and Zenith Insurance Company Limited
NAICOM
said the accounts of Custodian & Allied Insurance Plc; Law Union & Rock
Insurance Company Plc; Regency Alliance Insurance Plc; Standard Allied Life Assurance
and Unitrust Insurance Company Limited responses from the query made on their
accounts are under review.
The
accounts of Crystal Life Insurance; Zenith Life Insurance Limited; Sterling
Assurance Nigeria Limited; Sovereign Trust Insurance Plc; FIN Insurance
Limited; Unity Kapital Assurance Plc; Wapic Life Assuarance Limited; Nem
Insurance Plc; Prestige Assurance Plc; Oceanic (old Mutual);
PHB
Insurance Plc; Royal Exchange Assurance Plc and Equity Assurance Plc were
queried and the NAICOM is awaiting their responses
Accounts under review are those of
Royal Prudential Life Assurance Plc; Lasaco Assuarnce Plc; Cornerstone
Insurance Plc and Great Nigeria Insurance.
Monday, 23 September 2013
How to get investors interested in National Pension Scheme
The pension scheme can be critical in ensuring old age security for millions in the country. Uma Shashikant lists out how to achieve this objective.
The Pension Fund Regulatory and Development Authority (PFRDA) is now a statutory authority empowered to develop and regulate the market for pension funds. The National Pension Scheme (NPS), which was launched in 2004 and extended to the general public in 2009, was the first product launched by the PFRDA. The scheme aims to ensure old age security for millions of Indians. What are the critical tasks to achieve this objective?
The first task it to ensure a simple definition of the product. NPS moves from the traditional idea of defined benefit to defined contribution. The investor's corpus and income are determined by the market value of the investments made. If the product has to be accepted by the public that has been used to defined benefits so far, there are only two ways to win confidence. The first is the investment process and the second is the product performance. The PFRDA should stop tinkering with the processes as it has done in the past. NPS portfolios should remain passive indexed portfolios investing in multiple asset classes. Investors should have the choice of standard portfolios from which they can choose, with a default life-stage option that modifies the allocation as a person ages. NPS can and must offer standard portfolios that are retirement solutions for the long run. Period.
The second task is to make the NPS as attractive as possible. Compulsory annuity, tax treatment of income and difficulty in rebalancing the portfolio are all dampeners to a discerning long-term investor. If the PFRDA wants to be seen as the largest holder of long-term savings, it needs to build the power that such a position holds and negotiate all that is needed to deliver its mandate.
The third task is to position the product as a core, default choice to investors. The greater the choice, the higher is the confusion and fear of choosing a wrong product. This is why index funds make so much sense. There is no fear of choosing the wrong fund or the wrong manager. There are always funds that outperform the index . But there is no way that an investor or advisor will always select that winning fund, before its winning performance is known. Between the reality of funds outperforming the index, and the practical ability to participate in that outperformance, there is the devil of fund selection. Choosing an active fund manager among the competing managers in NPS will only lead to higher confusion. The managers would deliver out-performance, except that different managers will do well at different times and no one will know how and when to choose the right fund. NPS should be a pure, passive, asset allocation strategy that works by default. It is easier to build a product to size when this is achieved. Active management can come much later.
The fourth task is to acknowledge that even the best product needs distribution. If the NPS does not spawn too many product variants--a dangerous path it seems keen to take--distribution is an easy task. There is an army of lowcost , low-value and low-skilled distribution force in this country, willing to sell if there is money. Then there are advisers, the more informed category of sellers, who look for a core income that can keep them afloat while they negotiate the market for fees. NPS has the ability to position itself as a steady revenue earning and honest product that everyone is keen to sell. With volumes, the commissions can come down, but without it, NPS will remain a good product no one knows about. Distributors will be the most efficient educators of a product, if they see the incentive to talk about it.
The fifth task is to deglamourise the fund management function until size is achieved. A passive index portfolio with a standard proportion across assets, can be delivered easily and at low cost. Investors can select the manager they like, who can deploy funds according to the model portfolio, for a small fee. What the PFRDA will need is a high quality investment advisory committee, which will manage the model port folios. This committee may be able to select actively managed funds, which can be later in cluded in the model portfolio. Over time, asset managers will clamour for inclusion of their well-managed products into the model portfolio Tinkering with fees and portfolios and shifting from passive to active were all done by the PFR DA because they tried to get low-cost managers to manage tiny portfolios that could not repli cate the index. Passive first, active later.
The sixth task is to ensure widespread aware ness about the need for a secure retirement. The changing social structures require the elderly to fund their own retirement, even as they stare at higher life expectancy. The risk of investing in equity in the earning years might be so much smaller than the risk of an impoverished retirement. PFRDA needs a large-scale buzz about NPS. That will come when the regulator drives conversations about its products through a large army of distributors, advisers and investors who see a simple, tax-friendly and useful long term product.
Source: The Times of India
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