Photo: Faces at NCRIB members' evening

From left: Chairman, Colenson Brokers Nigeria Limited and a Past President, The Nigeria Council of Registered Insurance Brokers (NCRIB) Dr. Michael Olawale-Cole, President/Chairman Governing Board,  NCRIB, Ayodapo Shoderu and Chief Executive Officer, Old Mutual Nigeria,   Zomonoda Chizura at NCRIB Members’ evening sponsored by Old Mutual Nigeria held at NCRIB Head Office Yaba on Tuesday in Lagos.

SPEECH DELIVERED BY THE PRESIDENT OF THE NIGERIAN COUNCIL OF REGISTERED INSURANCE BROKERS, MR. AYODAPO SHODERU, FIIN, FCIB AT THE JUNE 2015 EDITION OF NCRIB MEMBERS’ EVENING HELD ON TUESDAY, JUNE 30, 2015 IN LAGOS

Management team of Old Mutual Nigeria,

Distinguished members of the NCRIB Governing Board,

Our guests here present,

Gentlemen of the Press,

Ladies and Gentlemen, 

I am most delighted to have you here today and I formerly welcome you all to this edition of NCRIB Member’s Evening which is being hosted by Old Mutual Nigeria. Let me reiterate for the umpteenth time that the impact of our cherished bi monthly meeting, otherwise known as ‘Members’ Evening’ is of no little measure as more underwriting firms now jostle to host the meeting. This is a clear indication that Nigeria Insurance market belongs to the Brokers, and we are proud to say that our resolve to entrench professionalism is giving us leeway. It is becoming clearer to insured public that the best insurance is the one through a Registered Insurance Brokers, hence, the desire to partner brokers. I can only encourage my professional colleagues to also cherish this meeting and make the most of business opportunities in it. The choice of Old Mutual Nigeria out of those that have applied to host June edition of our Members’ Evening was not farfetched from the company’s pedigree and its decision to host our members with a unique touch. Earlier today, the company offered our member companies’ auditors and accountant a free training on IFRS. I must commend this company for this positive thought, as the training is apt and timing. This Company has proved to us that it’s indeed Brokers’ friendly since the last time it hosted same meeting. The company remains one of the leading underwriting firms in Nigeria. I want to congratulate the management team of Old Mutual Nigeria, led here today by the Managing Director, Mr. ……., I can assure you that my colleagues will definitely partner you in insurance business.

NATIONAL ISSUE

Just last week, our nation was again plunged into deep mourning as we lost eight students of Olabisi Onabanjo University and four post-UTME candidates of the institution in a ghastly accident at Ilishan Junction along Sagamu/Benin Expressway. It was terrible and shocking; death has again depleted some of our future leaders. We commiserate with the bereaved families and we can only pray that God will grant the families the repose to bear the irreparable loss. We are using this medium to call on government to find lasting solution to incidents of avoidable accidents on our major roads. You will recall that in a couple of months ago, the incident of tanker driver accidents was almost affecting the nation’s economy as goods and properties worth billions of naira went down in inferno. The unfortunate part of these incidents was most of the affected properties and lives involved were not adequately insured. Although, insurance may not prevent death, the trauma of dependants after the loss of breadwinners, could be avoided if insurance has been given its rightful place. Once again, we are appealing to government to inculcate the culture of insurance in every citizen as tool to manage risk. Government should also partner insurance industry to enforce all the compulsory insurances. Like I always say, everything worth having, worth insures.

CEOs’ Retreat 

May I sincerely appreciate all delegates to the last CEOs’ Retreat of our Council. I am most delighted to inform you that 2015 Chief Executive Officers’ Retreat was a very successful outing. Benin City in Edo State, the venue of the Retreat was stormed by hundreds of delegates for refreshing moments. We were privileged to have the representative of Edo State Governor, Adams Oshiomole at the Retreat. Without any iota of doubt, the Retreat has opened vista of business opportunities in Benin City for interested colleagues. I must also appreciate the Local Organising Committee for their unrelenting efforts to make the program a successful one. The CEOs’ Retreat has remained a yearly platform for Insurance Broking top notch to come together for the admix purposes of fraternizing and sharpening their professional skills. We were not in any way disappointed by our guest speakers, especially, Dr. Segun Olatunji, who handled the theme paper“Staying Afloat in Trying Times”. 

MEGA CONFERENCE 

Like I told you at the last Members’ Evening in April, that one of my intentions as the 17th President of our noble Council was to see all the different arms of insurance industry working together in an accord. The much touted Insurance Industry Consultative Council (IICC) maiden edition of Insurance Industry Mega Conference is just around the corner. It is billed to hold between Sunday 26th and Tuesday 28th July, 2015 at Transcorp Hilton, Abuja. I urge you all to fully participate in the 2015 Insurance Mega Conference of the Nigeria Insurance Industry. The Conference will attract delegates from all the arms of insurance industry, even beyond the shore of our nation. The theme of the conference is “Developing Insurance Business for National Growth”.  We are part of this conference, we believe strongly in it. It will foster the industry unity; enhance our knowledge of our profession. I beseech you to register early to avoid late hour rush. 

SEMINAR.

As part of efforts to enhance the scope of business of members, I am delighted to note that the Council is finalizing strategies to host Micro Insurance seminar that will be free for members in collaboration with GIZ. It is believed that the training will expose our members to the untapped market in that aspect. I hereby implore everyone to be in attendance.  

2014 accounts: 17 insurance firms to be sanctioned by NAICOM

Chuks Udo Okonta

Failing to submit their 2014 accounts today before the close of work, would place a daily fine of N5, 000 on 17 insurance companies that contravened the law which fixed June 30 as deadline for submission of previous year accounts.  

A circular by the National Insurance Commission (NAICOM) entitled: The Position of 2014 Accounts Submission, said the companies that are yet to submit their accounts are: African Alliance; Anchor Insurance; Capital Express; Fin Insurance; Great Nigeria Insurance; Guinea Insurance; Nigerian Agricultural Insurance Corporation; Universal Insurance; Industrial and General Insurance; Unic Insurance.

Others are NICON Insurance; International Energy Insurance; Goldlink Insurance; Alliance & General Insurance; Alliance & General Life Assurance; Investment & Allied Assurance and Spring Life Assurance.

NAICOM also said 34 companies have secured approvals. They include: Wapic Life; Wapic Insurance Plc; Custodian & Allied Insurance; Custodian Life Assurance; Law Union & Rock; Mansard Insurance; FBN Insurance; Oasis Insurance; Consolidated Hallmark; UBA Metro; Zenith Life; Zenith General; Royal Exchange Prudential Life; Royal Exchange General; AIICO Insurance; Cornerstone Insurance; Prestige Assurance.

Others are: Continental Re; NSIA; NEM; Leadway; Equity; Unity Kapital; Lasaco; Regency; ARM Life; Niger; Staco; Union Assurance; Sovereign Trust; KBL Insurance; Unitrust Insurance; Mutual Benefits Assurance and Mutual Benefits Life.

Accounts queried and awaiting response are those of Linkage; Sterling Assurance and Standard Assurance Life, while those that their response is under review are Nigerian Re and Old Mutual Life.

The accounts that are presently reviewed are: Old Mutual Nigeria and Standard Alliance.  

Although, the Nigerian Insurers Association (NIA) the umbrella body of underwriters said it is working hard to reduce fines paid by insurers, observers believe the operators are not doing well as they have failed to learn and align with the International Financial Reporting Standard (IFRS) rules which presently govern how their accounts should be prepared

S/African Liberty, UK Prudential, 10 others push for Nigerian insurance market

BusinessDay

Top international insurance firms, among them, Liberty Group of South Africa and Prudential Life Company of UK are at advanced stages in their push to enter the Nigerian insurance market, BusinessDay investigations show.

The firms which have expressed the desire to position in Nigeria which is expected to lead the continent’s underwriting market in the next two years, ahead South Africa and Egypt, are already meeting regulatory authorities.

BusinessDay investigations show that 12 other foreign firms are currently in talks with the regulator, the National Insurance Commission (NAICOM) in the quest for a stake in the country’s growing market.

NAICOM is however said to favour  investors in search of acquisitions, rather than those looking for  new licenses.

The development is expected to make the market which currently ranks second in the continent, behind South Africa, to take the lead.

Nigeria’s insurance industry, with 60 underwriters, raked in over N300 billion premium in 2013 on the strength of growing confidence and adherence to strict corporate governance, which now endears it to foreign direct investors.

“In the last six months, we have had more than 12 enquiries from foreign companies that want to operate here and we have told them that we are not giving out new licenses but we prefer the acquisition of an existing company” said Fola Daniel, the insurance commissioner.

Although Daniel  declined to name the prospectors, he noted that Prudential Life in the United Kingdom, had also made inquiries through a top ranking British government official.

The interest from the firms which are from economies where insurance is highly appreciated is spurred by the gains by Zaplam, in partnership with FBN, Old Mutual and the Metropolitan, the three South African insurance giants currently operating in the Nigeria.

As at the end of first quarter 2015,  the Nigerian insurance industry’s total assets had risen to N793.6 billion, while the total premium as at the end of 2014 according to the National Insurance Commission(NAICOM),  stood at N302 billion, with insurance penetration of still less than 1percent. This suggests huge potential that is yet untapped, a market analyst said.

BusinessDay investigations further reveal that Nigeria’s Unic Insurance, a life insurance company and Equity Assurance, a non-life company, are among the companies in the inestors focus.   

The commissioner attributed the development to improved regulation in the industry and other market development efforts, including implementation of compulsory insurances, micro insurance and Takaful, which have widened growth opportunities.

Bola Temowo, president, Chartered Insurance Institute of Nigeria (CIIN) and chairman, Insurance Industry Consultative Forum, stated that the industry is set to address many of its challenges, in order to sustain the attention of foreign investors.

Modestus Anaesoronye & Badejo Ademuyiwa

No justification for increase of loss adjusters' fee - NIA

Chuks Udo Okonta

The Chairman, Nigerian Insurers Association (NIA), Godwin Wiggle, has said there is no justification for an increase on the fees charged by loss adjusters as underwriters presently bear all their expenses while undertaking their duties.

He disclosed this at a media parley in Lagos, stating that apart from the fees, there is another element of expenses, that is borne by the insurance companies. 

"I still have not seen the justification for an increase in the fees. Their services are classified in a range and the range is convenient for them to carry out their exercises. Apart from the fees, there is another element of expenses, that is borne by the insurance companies. 

"For every cost they incur in the cause of adjustment, that fee is 100 per cent passed to the insurance companies. The question I ask every day is where is this increase? Are they saying that their expenses multiply by inflation should now be paid to them? The fee is a fixed percentage the more the value of the claim, the more their income is. If we want to even do a statistics of what loss adjusters have earned in the last five years, compared to what they earned in the last 10 years, you would be shocked at the numbers, so, there is still no justification for that increase," he said.

He said there is no need for rancour between underwriters and loss adjusters as the laws have stipulated how they should operate.

"Their expenses are borne by the underwriting companies, so what is the fuss  about? We that pay the fees do not increase our premium, instead, what is happening is that our premium is dropping, if we want to examine it that same way as our premium is dropping, then their rates should also drop. But, we have resolved to leave the rate just as it has been," he added.

NAICOM observes signs of insolvency in a company

Chuks Udo Okonta 

The National Insurance Commission (NAICOM) says it has observed signs of insolvency in one of the insurance companies that had submitted its 2014 accounts.

Director Supervision NAICOM, Nicholas Opara, disclosed this at a media parley in Ilorin  , Kwara State, adding that out of the 40 companies that the commission has received their 2014 accounts, one has manifested signs of insolvency and that the commission is properly examining the accounts to ascertain the true state of the company.

"Out of the 40 companies that we have looked at, only one is showing signs of insolvency. I have asked my people to do all that is necessary so that we would not declare a company that is solvent an insolvent," he said.

Why Nigerian Airlines Pay High Premium on Aircraft Insurance

ThisDay

Managing Director of Arik Air, Chris Ndulue

Chinedu Eze

The Managing Director of Arik Air, Chris Ndulue has said that insurance companies’ assessment of Nigeria as high risk country might be responsible for the relatively high insurance premium Nigerian airlines pay for their aircraft.

Ndulue disclosed this to THISDAY on Tuesday when a team of underwriters visited the airline from London to inspect facilities at its operational headquarters.

He said that Nigeria is wrongly perceived as high risk country because of the activities of insurgents who operate at only one section of the country, adding that this might have influenced the high aircraft insurance cost in the country.

“The premium on aircraft insurance paid by airlines is something that is decided on case by case basis and it reflects the insurance company’s assessment of the risk. So if they think your risk is high, your premium is bound to be high and if they think my risk is lower, my premium will be lower.

“The only thing that will make a difference between insurance premium in Nigeria and in South Africa is country risk. Nigeria’s may be high because it will reflect the insurer’s perception of the country risk. If Nigeria’s insurance premium is higher than that of South Africa then insurance companies have assumed that Nigeria’s country risk is higher than that of South Africa.

“International perception of Nigeria is unfavourable but Nigeria is not as bad as it is perceived to be. If you don’t check that very well you pay a country risk that is far higher than what you should pay, especially with the issues of Boko Haram,” Ndulue said.

He remarked that it was to counter such negative perception that prompted the airline to invite its underwriters to Nigeria to see things by themselves.
“That is why today our underwriters from London insurance market visited to see that we are running a world class airline here. We are much bigger and ahead of many airlines in Europe. They can only see that when they come here. It will be difficult to convince them otherwise.

“We have our operations control centre (OCC) which is ahead of what the majority of airlines in Europe has. So they come here and they see it for the first time, even though they have been to airlines’ headquarters in Europe, they have not seen this in many of them before,” the Arik Managing Director said.

Ndulue believed that after the personal experience of coming to Nigeria and looking at things and the security level in Lagos and other parts of the country the team would have a better understanding of Nigeria in terms of security profiling and risk assessment.

“We showed them our maintenance facility, we showed them where the Lufthansa Technic personnel are and we showed them our ground staff training school. We showed them what we are doing here and how we even manage our aviation security and they realised we are nothing less than the best airline they found in Europe.

And we let them know that this is Lagos and that it is safe. There is nothing happening here; there is no war here but there is insurgency in Borno state and sections of north east, but that does not mean that the whole country is insecure ,” Ndulue said.

The 'official' method to make your pension cash last a lifetime

The Telegraph

By Katie Morley

Government-backed pension provider Nest – the National Employment Savings Trust – has outlined radical proposals that will give savers using the scheme low-cost, flexible access to their pension cash. 

It has also outlined an “automatic” process by which all savers, on reaching a series of age triggers, will be channelled into investments that both safeguard their cash to provide future income and enable savers to spend it as needed. 

The plans, published today, go some way towards meeting the aims of this newspaper’s Make Pension Freedoms Work campaign. First, they pave the way for Nest to become a benchmark in low-cost, flexible pension access – currently being denied to many. 

Second, Nest’s proposals offer a solution to the problems posed by “lifestyle” funds. As we reported last week, these funds, which hold billions of pounds of pensioners’ savings, were built for savers who would buy annuities on fixed retirement dates – rather than, as now, a flexible retirement where cash can be drawn or invested as savers wish. As a result of this, many such funds are exposing savers to unnecessary market risk. 

• Pension freedom flaw: 750,000 savers lose 9pc in four months 

• Make pension freedoms work: our five demands

Nest’s research concluded that once savers finally did retire, their money should be managed in three phases linked directly to their age. 

Its proposed solutions take into account factors including longer working lives, and assume most savers will have a 30-year-long retirement. 

Nest came into being as part of the introduction of “automatic enrolment” into workplace pensions, a policy partly based on Australian experience. 

The shape of retirements to come? 

The first phase envisaged by Nest is “early retirement”, spanning the decade between someone’s mid-60s and early 70s. 

According to its chief executive, Otto Thoresen, at this stage “most savers don’t really know what kind of income they need from their retirement pots now or in the future. So it doesn’t make sense for them to lock their money up in a guaranteed income, such as an annuity. A flexible approach will suit most people best.” 

As a result, Nest’s default options would see the money left invested. The portfolio would be designed primarily to protect savers’ money from inflation, so the majority initially would be in shares and commercial property. But there would be two crucial additional features to this stage. 

Around 10pc of savers’ pension pot would be kept in cash as an “emergency fund” which could be accessed instantly, at little or no cost to the saver. 

Secondly, a small portion of the money (between 1pc and 2pc per year) should be saved in a separate pot, building up a reserve which in future years – when the saver’s financial situation has settled and there is a clearer picture – can be used to provide an income. 

In the second phase, when someone is in their mid-70s to early 80s, savers would continue to take a flexible income from their invested capital. But Nest recommends that the money that has been set aside for later life income should now be “locked in” to stop savers dipping into it. This provides a greater degree of security and certainty that an income will be paid for the remainder of an individual’s life. 

In effect, it becomes a safeguard against the risk of “outliving” your savings. 

And in the final phase, when savers reach their mid-80s and for those who live into their 90s, their money would be converted into an income stream for life through the purchase of an annuity. 

• 'Australians got pension freedom and they are running out of money'

• Pension freedoms to yield £1.2bn tax windfall for Treasury

Nest’s research found that buying an annuity in your 80s offers better value for money than buying one in your 60s. It also found that savers in their 80s no longer wanted to take investment risk and therefore preferred the certainty of an annuity. 

As this newspaper has repeatedly highlighted, millions of pension savers who want flexible access to their money are being, in one way or another, barred from free access to their pension cash. 

Until recently buying an annuity has been the default option for millions of over‑55s but in April the Government introduced new flexibilities which – in theory – mean savers are no longer forced into buying a guaranteed income. Instead, they now have unfettered access to their money as well as a wider range of options to keep their cash invested to save or spend as they like. 

Nest’s vision is to create a simple, hassle-free path to pension freedom so every saver. 

- katie.morley@telegraph.co.uk

Pension changes must not be rushed, insurers say

Plans to allow pensioners to sell their annuities for cash must not be rushed through, insurers have urged.

The government wants to extend the pension overhaul to allow pensioners to sell back their annuity - a fixed retirement income - to providers.

But a trade body says the proposed April 2016 start date puts people at risk of scams.

It said lessons should be learned from recent pension changes that allowed people to cash in a pension pot.

Under those rules, which took effect in April this year, many people aged 55 and over have been able to cash in their pension savings rather than buying an annuity.

The latest proposals would allow five million pensioners who have already bought an annuity with their pension pot to sell it back.

Pension Calculators

State pension calculator DWP

Combined state, workplace and DC calculator, from Standard Life

Should I delay buying an annuity? Hargreaves Lansdown 

How much can I earn from a DC pot? Money Advice Service

The Association of British Insurers (ABI), which represents insurers who manage pension money, said that the rights of pensioners' dependents needed to be protected.

The scope of the proposals needed to be more clearly defined, it argued in its response to government consultation, including whether annuities could be sold back to the provider, but without an obligation on that provider to agree to the deal.

"Naturally there are considerable challenges in establishing a functioning market, and many unresolved complex legal, regulatory and prudential questions," said Yvonne Braun, of the ABI.

"We want to work with government to help resolve these issues, but given the lessons learned from the [recent] reforms and the need for clarity in many areas, we urge the government not to rush these proposals through for 2016. 

"Allowing more time will ensure an appropriate regulatory regime can be developed to give this new market a chance to succeed."

The new Pensions Minister, Ros Altmann, recently told the BBC she firmly supported the plan for a secondary annuities market. 

A spokesman for the Treasury said: "We are removing restrictions on selling annuity income so that the five million people who have already bought them have the same freedom as everyone else."

Parametric insurance in Africa on the rise

IHS Maritime 360

Dramatic climate changes have increased investment opportunities for insurance companies keen on providing parametric insurance products to the African market.

Climate insurance, though a new concept in some of the emerging markets, could help mitigate impacts of weather changes not only on the agricultural sector but also on marine transport infrastructure and logistics.

Swiss company CelsiusPro's CEO Mark Ruegg told participants at 5th annual African Insurance and Reinsurance in Nairobi this week that the African insurance market potential is huge despite "current penetration being small."

He said to expand the weather insurance index in Africa and other emerging markets it will require insurers to offer "expertise in structuring and tailoring products that effectively mitigates the effects of weather, climate change and other natural perils."

Ruegg said the use of appropriate software in parametric insurance, will enable policy cover providers to "effectively service clients with parametric products ranging from risk modeling, pricing, execution to policy lifestyle management."

He said the use of big data from satellites, ground measurement devices and additional data providers is critical in designing "smart products and giving climate smart advice."

However, Ruegg said offering parametric large scale insurance in some markets could face the challenge of sourcing relevant data, designing of appropriate products, effective pricing and dealing with huge number of policies.

Climate change and weather trends could influence the depth of the sea, extent of sea ice and could also trigger floods, which are known occasionally to block shipping channels or amass silt and debris that makes shipping channels shallow, which is expected to have an increasing impact on insurance trends in Africa going forward.

Brazil's Caixa says to offer 25 pct of insurance unit in sale plan

BRASILIA, June 26 Brazilian state-owned lender Caixa Econômica Federal said on Friday its board approved a plan to sell 25 percent of the stock in its insurance unit to investors.

The government has said it wants to sell the stock in Caixa Seguridade Participações SA this year to collect some of the extra revenue it needs to meet its fiscal targets. (Reporting by Alonso Soto; Editing by Chris Reese)

Old Mutual Nigeria hosts brokers evening

Chuks Udo Okonta

Old Mutual Nigeria, a leading multinational Insurance underwriting firm is extending its horizon of relationship with insurance brokers by opting to host the June 2015 edition of the Insurance Brokers Members’ Evening on Tuesday, June 30, 2015. 

A statement by Assistant Manager, Corporate Affairs, Nigerian Council of Registered Insurance Brokers (NCRIB), Dele Ayeleso, said the venue Of the vent  is the Insurance Brokers House, 58, Moleye Street, Alagomeji Yaba, Lagos starting from 3.00pm.

He noted that to give a unique touch to the event, the company has disclosed its intention to inch up the value of the event by hosting a free lecture for insurance brokers under the aegis of the NCRIB on International Financial Reporting Standard (IFRS).

It is expected that Accountants, internal Auditors and related staffers of the companies will benefit from the training which will enhance the compliance level of members with the financial regulation, he said.

He said the Members’ evening will afford Old Mutual the opportunity to cross fertilise ideas with Brokers with view to enhancing the market share of the company, stressing that the Nigerian Insurance market is often referred to as Brokers market, given the fact that the professional intermediaries control more than 70 per cent of insurance business in the market. 

Meanwhile, the Eastern Area Committee of the NCRIB will on Friday, July 3, 2015 hold the inauguration of its new executives in Aba, Abia State.

The event will feature the installation of Mr. Geofrey Uzoagbaraas  Chairman and feature the attendance of  the state Governor, Dr. Okezie Ikpeazu  as well as Enyi 1 of Aba, Chief Eze Ikonne. The inauguration lecture titled: “Positioning Yourself for Greater Opportunity” will be delivered by Dr. Segun Olatunji, a renowned Consultant and Director, Nigerian Tribune Newspaper. 

The incoming Chairman,  Uzoagbara has noted that the focus of his tenure would be to deepen insurance awareness  within the seven state and institute welfare schemes for members within the zone. 

Book on essentials of engineering insurance for launch

Chuks Udo Okonta

The knowledge base of the Nigerian Insurance Industry will soon be buoyed with the public presentation of the book; "Essentials of Engineering Insurance,"

authored by former Managing Director of ACEN Insurance Company Limited, Emmanuel Oyetoyan.

The public presentation will be held on Thursrday, July 2, 2015 at the Nigerian Council of Registered Insurance Brokers, Alagomeji, Yaba, Lagos, starting from 10.00am.

The book is borne out of the desire of the author to further give back to the insurance profession by enriching the knowledge base of the industry in technical areas where he had made a mark in the last 35 years of service to the industry. 

According to Oyetoyan, it is a known fact that the Nigerian and African Insurance industry has continued to witness a down turn in its fortunes due to dearth of knowledge and adherence to sound underwriting principles which the book is meant to correct.

The seminal publication features valuable topics such as premium rating; risk assessment and claims handling. Other aspects are technical surveys and inspection as well as insurance broking and loss adjusting.

The Deputy Chairman of Hogg Robinson Nigeria, Mr Amos Adeyeye is the Chairman of the event while Mr Sammy Sotomi, former President of the Institute of Loss Adjusters of Nigeria (ILAN) is the Chief Presenter alongside the Commissioner for Insurance, Fola Daniel.