BusinessDay 28 Feb 2018

More documents

Recommendations

Info

Wednesday 28 February 2018 30 BUSINESS DAY C002D5556 E-mail: insurancetoday@businessdayonline.com Leadway Assurance embarks on second phase of journalist empowerment Corneille Karekezi, the group managing director and CEO of African Reinsurance Corporation (Africa Re) receiving award in S/Africa. Bereaved families of Lagos public servants get reprieve, as insurance pays death benefits ..LASACO, Ministry of Finance excited about partnership Stories by Modestus Anaesoronye Thirty-two families of bereaved Lagos State public servants has got a reprieve, following a partnership between the State Ministry of Finance and LASACO Insurance Plc, where they received payment of insurance death benefits for their loved relatives who died while in service. Beneficiaries of the deceased got a total of N85 million as insurance compensation for death of their relatives, which is part of the State government’s welfare package in compliance with the Pension Reform Act to motivate public servants to give their best while in service. Folasade Adesoye, head of Service (HOS) of Lagos State who speake at the cheque presentation ceremony held for the beneficiaries of deceased members of staff of the state public service in Alausa said: “The payment of Death Benefits to the families of deceased members of staff is neither a favour nor a largesse, for which we expect special accolades, but it is, instead, the responsibility of the State Government and an obligation that is not only personal to Akinwunmi Ambode, the Governor of Lagos State, but one, which he accords the highest priority.” Adesoye said the importance that Lagos attaches to the provision of insurance packages among other welfare initiatives, derives mainly from government’s prioritization of its workforce as its most important asset. “The primary policy objective of the payment of Insurance Death Benefits is, therefore, essentially for the funds to serve as succour for the immediate families, dependents and other beneficiaries of the deceased. It is the hope and expectation of Government that the immediate needs of feeding, clothing, schools fees, house rent, transport, medicals and general family wellbeing would be substantially addressed (even if not totally) in the period between the demise of the family’s bread winner, the release of his entitlements and the institution of more permanent support structures.” She appealed to beneficiaries to ensure judicious use of the fund and due diligence as well as proper planning in all the expenditure you may need to make, particularly, in the areas of business and investments. “Please endevour to seek guidance and professional advice from financial consultants and small business experts before taking decisions which could significantly impact your families, she advised. Adesoye also commended all stakeholders, particularly the Ministry of Finance, State Treasury Office and LASACO for their part in ensuring the sustenance of best practices towards making life much better and rewarding for the families of deceased members of staff of the State Public Service under the Global Insurance Scheme Policy. Oladimeji Olona, general manager, life business, LASACO Assurance Plc in his remark commended the Lagos State government for imbibing the culture of insurance, stating that what has happened today is the fulfillment of Lagos State government’s commitment towards improving the welfare of its public servants. “The biggest thanks here goes to the state governor and the government of Lagos State who ensured that premium for insurance was paid regularly and as at when due. If premium was not paid, we wouldn’t have been here today, Olona stated. He therefore called on the beneficiaries of the Adeduro sees insurance potential in travel, tourism industry Given the close relationship between insurance and the Tourism and Travel sectors because of the formers role in helping the later manage risks for business protection and survival, expert has advocated stronger partnership between the two sectors. Mayowa Adeduro, an insurance expert and former managing director of Anchor Insurance Company Limited said both sectors must work together, come up with products that meet the risk appetite of the business, particularly now that tourism and travel business is becoming a major contributor to Nigeria’s gross domestic products (GDP). Adeduro made the remark in a presentation with the theme “The corollary of tourism and insurance – why insurance industry should play an active role for sustainable tourism business in Nigeria”. He said “Insurance industry in Nigeria must es- L-R: David Iornem, director - general, Institute of Management Consultants presenting a certificate to Paddy Ezeala, regional manager, South - East, Premium Pension Limited during Ezeala’s induction into the Fellowship of the Institute in Abuja. tablish a formal connection to the Travel and Tourism sector for a mutually rewarding relationship. A special product must be designed for municipal and remote tourist sites.” According to him, insurance industry lave lost billions of Naira in gross premium income from uninsured and under insured small and medium size hotels and recreational facilities scattered all over the federation. “Many visitors and tourists have suffered unreported losses and liabilities in some hotels and parks.” He noted that insurance industry must team together to build a coherence and all inclusive arrangement with IATA Travel Agencies and NANTA members money to make judicious use of it to ensure that children of the bereaved get necessary education that will enable them become responsible members of the society. Olufunmilayo Balogun, permanent secretary, Ministry of Finance; Fuyinfun Ogubanke, permanent secretary, Public Service as well as Bamidele Olayide, chairman, Association of Senior Civil Servants in Lagos State, in their remarks consoled the bereaved families, while paying God to comfort them particularly at this time. They also urged them to make judicious use of the money, avoid risking the money in ventures that will not give the dead joy wherever they are, as believed in African culture. “This is not the time to send your children abroad, as most what we hear about those places are not always true. Invest the money here in Nigeria, and God will make it prosper, the beneficiaries were advised. with potential to facilitate smooth operations of members of these trade groups. “When risk is shared it becomes difficult, if not impossible, for chronic defaulters to run from one company to another, which has been the bane of profitable underwriting in some classes of insurance.” He concluded by saying that insurance industry has a huge role to play in entrenching a sustainable tourism development in Nigeria, however nature abhors vacuum so the ball is in the court of insurance industry to take up proactive engagement or to lose yet another opportunity to be reckon with by the government and the insuring public. Leadway Assurance has announced the second edition of the Leadway Journalism training organized in partnership with the National Insurance and Pension Correspondents. The initiative, which is in its second edition is a capacity building initiative organised by Leadway Assurance to empower journalists in the discharge of their duties by equipping them with the requisite knowledge on the industry and its business operations. Olubunmi Adeleye, head of Corporate Communications/Services, at Leadway said this edition of the capacity development initiative will focus on the key areas of financial reporting in insurance, understanding life annuity, micro insurance business among others. Speaking on the initiative, Adeleye highlighted the important role that journalists play in raising the level of insurance awareness and how it works, hence, the need to continuously equip them within such capacity building initiatives. She said, “The training will further enlighten journalists on the inner workings and technicalities of the insurance sector, keeping them abreast of the latest industry trends both locally and globally.” The initiative which is scheduled to hold at the Leadway Assurance Training School on Wednesday, 28 February, 2018 will have in attendance over 40 journalists culled from the Insurance and Pensions news sector. It will be recalled that in October 2017, Leadway Assurance collaborated with NAIPCO to organize the first of its kind comprehensive training workshop for members as part of the 2017 NAIPCO Conference to facilitate capacity building for insurance correspondents.
Wednesday 28 February 2018 Pension Today C002D5556 BUSINESS DAY In Association with 31 More insights into micro-pension scheme A micro-pension plan has a distinct accumulation phase as well as a payout phase. During the accumulation phase, a member contributes towards accumulating balances. The value of such accumulation depends on the amount of contributions less preretirement withdrawals plus returns (net of investment management expenses) obtained from the investment of funds. It is usual for administrative expenses to be borne by the members collectively. These however need to be transparent and benchmarked. The accumulation phase is followed by the pay-out phase, which commences after retirement in most cases. During this phase, the member receives income from the pension fund either as a lump sum or in a phased manner. Product Features A pension product for low-income groups should be designed to take into account the constraints faced by, and the needs of these individuals. As income streams may be uncertain or volatile, the product should offer a degree of financial flexibility calling for low or no minimum contribution requirements so as to encourage membership. However, contributions that are set too low or which are paid in a sporadic manner may not provide sufficient income security. Experience with micro-savings indicates that low-income groups prefer lower-value and frequent deposits rather than infrequent larger-value deposits. As there are competing demands on their resources, it is difficult for these groups to accumulate large amounts. In order to facilitate the making of frequent deposits and to remove prohibitive time and travel costs, convenient door-todoor deposit collection is favoured.Furthermore, the product features should be uncomplicated to enable all individuals, including those with low levels of financial literacy understand and monitor them. The duration of pension products should be longterm, though a roll-over option after each ten-year term may be less daunting for low-income groups. The age at which the first withdrawal is permitted may or may not coincide with the retirement age. The other design alternatives are to provide either easy withdrawal options or loans against deposited amounts. But these features result in increased transaction costs and reduces the period over which compounding occurs; resulting in a lower level of accumulated balances and hence retirement income. The tradeoffs between current needs and future income security in retirement. Risk Management In the pay-out phase, longevity, investment and inflation risks need to be addressed. In addition, survivors’ benefits and disability insurance are also essential. Survivors’ benefits are particularly important. Longevity risk derives from the fact that although each individual will die eventually; the age, the cause, and the place of his or her death are not known. Some may die within a short period after retirement, while others may live for a much longer period. The latter category of persons may find their financial resources exhausted, while those dying early in retirement may not face this challenge. The earlier the age at which the first withdrawal is permitted, the longer the period for which the accumulated balances will be required to be used to finance income in old age. Investment risk refers to the risk of return from the portfolio that the pension fund invests in. In the risk-return continuum, a lower degree of risk is desirable for micro-pension plans because of the lower risk-bearing capacity of the low-income population. In order to ensure an adequate rate of return on small deposits, the transaction costs involved need to be kept low. This is a challenge that must be met both through technology-based solutions and deliberate efforts to realize economies of scale Micro-pensions must offer a reliable means for the collection of small-value deposits on a frequent basis at locations convenient to the customer and scope. Taking into account the lengthy time horizon within which micro-pensions operate, inflation risks are important, and particularly so in view of the limited resources of the poor. In much of Africa, inflation risk is one of the main reasons why savings for old age are placed in assets, such as by investing in land, housing and livestock. Micro-pensions must offer a reliable means for the collection of small-value deposits on a frequent basis at locations convenient to the customer. Given the large demography in Nigeria, a challenge is to put in place a truly nationwide distribution channel for micro-pensions. Micro-credit loans are essentially short-term in nature and range between one and three years, with a oneyear term being the most common. Although repeat loans are often observed, the time horizon is usually not as long as that of micro pension schemes. Hence, the two financial services (loans and deposits) may not overlap entirely and to that extent there may not be cost savings. Micro Pensions functions include the following; firstly, the reliable collection of contributions, taxes and other receipts, including any loan payments. The second concerns the payment of benefits for each of the schemes in a timely and correct way. The third involves securing financial management and productive investment of provident and pension fund assets. The fourth core function is maintaining an effective communication network, including the development of accurate data and recordkeeping mechanisms to support collection, payment and financial activities. The fifth is the production of financial statements and reports that are tied to providing effective and reliable governance, fiduciary responsibility, transparency, and accountability. The sixth function, it is to provide customers with appropriate financial education and to increase financial literacy. Communication The communication strategy with potential customers should be creatively managed. For instance; for products such as micropensions that operate with a lengthy time horizon, offering fixed interest rates may be difficult; accordingly, flexible interest rates may be more appropriate. The concept of flexible interest rates may however be hard to explain to customers with low levels of financial literacy. It is therefore incumbent upon institutions to effectively explain the product to customers, it’s important that the potential customers are equipped with sufficient knowledge to enable them to explain the products to their family members.
Page 1 and 2: usinessday market monitor Commoditi
Page 3 and 4: Wednessday 28 February 2018 BUSINES
Page 5 and 6: Wednesday 28 February 2018 C002D555
Page 11 and 12: Wednesday 28 February 2018 COMMENT
Page 13 and 14: Wednesday 28 February 2018 COMPANIE
Page 17 and 18: Wednesday 28 February 2018 In Assoc
Page 19 and 20: Wednesday 28 February 2018 BUSINESS
Page 21 and 22: PRIVATEEQUITY & FUNDRAISING Wednesd
Page 25 and 26: BUSINESS DAY C002D5556 DB Rail Acad
Page 29: Wednesday 28 February 2018 C002D555
Page 35 and 36: Wednesday 28 February 2018 Live @ T
Page 37 and 38: Wednesday 28 February 2018 Nigeria
Page 39 and 40: Wednesday 28 February 2018 R-L: Hen
Page 41 and 42: Wednesday 28 February 2018 02 BUSIN

BusinessDay 28 Feb 2018

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?