Microinsurance cover to hit 1 bn by 2020

 
 
Chuks Udo Okonta

Microinsurance, which currently provides coverage to 500 million people, could pass the 1 billion mark by the end of the decade, Chair of the Microinsurance Network and Head of the ILO’s Microinsurance Innovation Facility, Craig Churchill, has said.

A statement by the Microinsurance Networks, said the microinsurance sector, which has shown a rapid growth over the last 10 years, is expected to double by 2020, as governments, insurance companies and providers worldwide broaden the geographic scope and range of insurance services available to low-income people.

He noted that with this rapid expansion, the Microinsurance Network – an exchange and learning platform for microinsurance since 2002 – acquired its own institutional legal status in May 2012. "Becoming independent enables the Network to assume a greater leadership role in the sector, serving its mission of promoting the development and delivery of effective insurance services for low-income people," explains the Network’s Executive Director Véronique Faber. Since its inception the Network has benefitted from the support of its diverse membership, the German Development Cooperation (BMZ), and particularly the Luxembourgish government which has assumed an increasingly important role in the global microinsurance sector.

In many developing countries, microinsurance providers are playing an important role in increasing resilience of low-income people to daily and catastrophic risks such as crop failure, illness and impact from climate change. "The expansion of the sector is being facilitated by the emergence of alternative distribution channels and public-private partnerships, the adoption of technological innovations as well as an increased awareness amongst insurance companies of the business case for microinsurance," says Eugenio Velasques from Bradesco Seguros e Previdência, one of the leading insurance companies in Brazil. Furthermore, the development of appropriate insurance regulations and setting of standards measuring impact and client value, are playing a key role in achieving long term sustainability of the sector.

So what can policymakers, insurers and providers expect from the Microinsurance Network in 2013?

"The Network will be focussing on its four strategic outcomes: Increased supply, improved client value, conducive environment and enabling infrastructure," explains Ms Faber. Amongst other initiatives, this will entail the drafting of guidelines for agricultural microinsurance schemes and the compilation of lessons from health microinsurance. The Network will also be reporting on sector trends through an interactive website, publications and events, and the 9th International Microinsurance Conference to be held in Indonesia 12-14 November 2013.

Staco posts N6.4 bn gross premium

Chuks Udo Okonta

Staco Insurance Plc posted a gross premium income of N6.48 billion last year, its Chairman Dere Otubu, has said.

He said this at the company's Annual General Meeting (AGM) in Ijebu Ode, Ogun State. He added that the company recorded N5.24 billion premium income in 2010.

Otubu, said the firm made a provision for doubtful investment totaling N1.37 billion.

Its Managing Director Sakiru Oyefeso, said the firm has anchored its growth strategies on the preservation of its vision and core values on workforce startegy, service delivery and marketing strategy.

He said the company is poised to increase its market share and sustain its position as a leading light in the industry, adding that the firm will improve its collection drive in line with the resolve to ensure significant recovery of outstanding premium, while ensuring that age analysis of debts for new transactions is reduced to the barest minimum in line with the National Insurance Commission (NAICOM) guidelines.

Expert canvasses focus on groups, alliances

　


Chuks Udo Okonta

The Managing Director Riskguard-Africa Nigeria Limited Yemi Soladoye, has urged insurance underwriters to develop products to catpure business opportunities within professional groups and alliances.

He told Inspen that there are enormous untapped business opportunities within professional and cultural groups which can boost the profitability of operators.

He noted that the business culture of operators has stemmed the growth of the industry, adding that the operators are comfortable with going to brokers to collect cheques.

He said: "The business culture of operators has not helped the situation. The operators like going to a broker to collect cheques, forgeting the fact that under the Market Developement and Restructuring Initiative (MDRI) there is focus on groups and alliances. Take for an example, a group like the Nigerian Bar Association (NBA), I am sure it has about 20,000 members, if an insurance company designs a product for all members of NBA, and each of them pays N10,000 in a year, that would amounts to N200 million.

"The cost on this type of business is always low. This and many other types of business initiatives are what the MDRI focuses, which the underwriters are slow and failed to adopt."

He noted that for the industry to thrive, the operators must embrace new trends and strengthen their retail marketing strategy.

NAICOM adopts new campaign strategy on MDRI

Chuks Udo Okonta

The National Insurance Commission (NAICOM) has adopted a new campaign strategy to promote the Market Developement and Restructuring Initiative (MDRI) programme, Inspen, has learnt.

A source in the commission said the campaign strategy would enable the industry achieve the projections envisaged in the MDRI programme. Though he failed to disclose the strategies, which is being worked on in the review of the MDRI, he added that the strategy would help promote insurance and boost operators profitability.

Under the MDRI, insurance operators hope to raise the value of insurance contracts to about N1 trillion ($6.4 billion) from N300 billion in 2017, contribute about three per cent to the Gross Domestic Product (GDP), penetration increase to 22.5 per cent from 10 percent.

The Commissioner for Insurance Fola Daniel said compulsory motor-vehicle insurance, which makes up most contracts now, would remain at about 10 per cent by 2017, while life insurance would constitute seven per cent, general business insurance three per cent and petroleum companies’ insurance 2.5 per cent.

Daniel said oil and gas businesses will continue to contract international companies to insure their Nigerian operations as the capacity of local insurers is still limited.

Managing Director Riskguard-Africa Nigeria Limited Mr Yemi Soladoye said NAICOM has almost perfected its work on consumer education, which is massive insurance education in the country.

He noted that the effort would involve constructive information sharing, media advertorials and more. He said within the next two years, no body in the country will be in doubt as to the benefits derivable from insurance operations and the rights of the public.

NCRIB applauds Inspenonline reportage

 
Chuks Udo Okonta

The Nigerian Council of Insurance Brokers (NCRIB) has applauded Inspenonline's qualitative reportage on Insurance and pension.

Its President, Mrs Laide Osijo, said this at the conferment of Insurance Man of The Year Award on her in Lagos. She pledged the council's commitment to suport the medium's quest to place insurance and pension report to lofty heights.

She said: "I applaud Inspenonline for projecting itself as a medium to reckon with due to its timely and qualitative online news reportage of insurance and pension operations. I personally use this opportunity to give my assurance of support and that of our noble council to the medium to excel more brilliantly."

She noted that the council has strived to leave behind a legacy of sound infrastructure, both in terms of human capital development of the secretariat, as well as erection of a monumental secretariat complex, christened "Insurance Brokers House" which is today a source of envy to many related institution.

"It is a thing of delight to say in the last one year of my presidency, the storyline of our council has been re-written positively. We have raised the bar in terms of professionalism through effective training and exposure of our members to the changing dynamics of our trade, we have ensured better institutional relationship with reputable bodies, including the National Insurance Commission (NAICOM), as well as entrenched sound ethical standards for our practice," she said.

Nigeria: Insurance sector balances challenges and potential

　

Nigeria: Insurance sector balances challenges and potential



Although penetration rates continue to lag behind those of other formal financial services, Nigeria’s insurance sector offers plenty of room for expansion over the coming years. Even so, there are a number of factors that could hamper growth and restrict earnings.

Speaking late last year, Fola Daniel, head of industry regulator the National Insurance Commission (NIC), said the Nigerian insurance market has the capacity to become the biggest in Africa and one of the largest globally.

For the sector to achieve the elevated position Daniel envisions for it, Nigeria’s insurers will have to overcome the resistance to obtaining coverage by individuals and businesses.

According to one recent study, only 2.25m Nigerians have access to the various products and services offered by insurance companies. Though penetration rates across Africa are low, with only seven countries having coverage levels above two per cent of their populations, Nigeria is one of the continent’s largest and fastest-growing economies, meaning the insurance sector is underachieving in an expanding market.

The report, published in December by Enhancing Financial Innovation and Access (EFInA), an agency which promotes financial inclusion, also showed that take-up of insurance products was far lower than the level of Nigerians who had access to formal financial services, which stood at 43 per cent of the adult population as of the end of 2012. This lack of exposure to financial services, including insurance, suggests the sector needs to work harder to sell its products, and educate the potential client base as to their benefits.

Even in areas where insurance is mandatory there is still low coverage, with motor cover the prime example. Though there are some 7m vehicles registered in Nigeria, less than 1m of these have proper coverage, according to the Nigerian Insurers Association. In response, authorities have begun a campaign to reduce the incidence of unregistered and uninsured vehicles. Implementation and enforcement will be key, of course, but if followed through this may prompt more owners to take out the minimum third-party coverage required by law since 2003.

Despite the low penetration, the sector is a still crowded one, with 49 companies in the market, according to the NIC. This tight operating environment should result in highly competitive rates for products, though most of the firms in the sector focus on the upper end of the business segment, providing coverage to companies linked to Nigeria’s main economic drivers, such as trade, transport and communications.

With GDP predicted to expand by even per cent or more this year, up from the estimated 6.6 per cent in 2012, there are openings for insurers to boost trade. One of the areas where policy writers need to lift their profile is with small and medium-sized enterprises (SMEs), with such businesses contributing almost half of GDP and providing employment to around a quarter of the national workforce. Given the low penetration levels reported by EFInA, the 17m businesses that make up the SME sector are massively under-represented in coverage totals, and represent a significant opportunity for policy writers if company owners can be persuaded of the benefits of insurance.

Slow payment of premiums by state agencies, as well as ongoing security concerns, were mentioned as two of the leading issues faced by insurers in a news report published by local media at the end of December. Delays in the release of premiums meant that private policy writers had struggled to cover their own payouts and also had fewer funds to invest in the economy, reducing the contribution to GDP.

While the government has plans to encourage low-cost or microinsurance products, and to expand the reach of sharia-compliant takaful policies to better reach Nigeria’s large Muslim community, the biggest hurdle for the industry is the low level acceptance of insurance among the wider public. As more Nigerians see their purchasing power rise, the more they may want to obtain coverage for themselves and their property, allowing the sector to deepen its penetration and lift earnings.

Source: oxfordbusinessgroup.com

Sovereign Trust gets general managers

 

Chuks Udo Okonta

Sovereign Trust Insurance Plc has announced the elevation of three Deputy General Managers to the position of General Managers.

A statement by the company said the new positions became effective from January 1, 2013.

It noted that the newly promoted officers are Olaotan Soyinka, Divisional Head, Operations, Ugochi Odemelam, Divisional Head, Retail and Business Development and Kayode Adigun, Divisional Head, Finance and Administration.

Its Head of Corporate Communications and Brand Management, Segun Bankole, said this will be the first time in the history of the organisation to appoint three General Managers with Ugochi Odemelam emerging as the first female General Manager of the underwriting firm since its inception.

He said the newly promoted officers have been very outstanding in their different portfolios over the years. It will be recalled that the three General Managers recently took charge of the three Divisions that were created after the adoption of a new business model that took off earlier in the year.

According to the Managing Director, Mr. Wale Onaolapo, the promotion is in recognition of their committed loyalty to the company, dedication to duty and avowed belief in the corporate objectives of the organization. In his words "our greatest asset in Sovereign Trust Insurance Plc has always remained our human capital and management is committed to ensuring that good performance will always be rewarded from time to time at all levels within the organisation.

Onaolapo congratulated the newly elevated officers and urged them to continue to give their best in all they do in promoting the ideals of the company, just as he encouraged them to bring to bear their expertise and wealth of experience in achieving the organisational set goals and objectives.

Sovereign Trust Insurance Plc is one of the leading Insurance companies in Nigeria with branches well spread across the country. The Company recruits and retains the services of young, vibrant, educated and talented professionals from varied disciplines. As a thriving organisation, we will continue to rely and put to use the experience garnered by our Managers over the years with a view to constantly delighting our customers. It is interesting to note that the company is ranked amongst one of the topmost employers of highly skilled manpower in the insurance industry in the country till date.