Monday, July 9, 2018

MONDAY, JULY 9, 2018
insurance
Insurance sector needs to focus on financial inclusion – Hassan
In this interview with NIKE POPOOLA, the Chairman,
Planning Committee, National Insurance Conference, Mr Femi
Hassan, speaks on why different groups in the insurance sector
should work together to get more Nigerians to patronise it
What does the future
hold for the Nigerian
insurance industry?
The future is looking bright.
The insurance industry desires
to be among the top 20 by
2020 as projected. But with
the present state of things, this
expectation may shift a little
further while the industry tries
to take advantage of the financial
inclusion strategy that the
whole financial services sector
is keying into at the moment.
This financial inclusion is going
to help penetration into the
rural segment of the population,
which is where the number is.
Insurance premium income
needs to improve with increase
in market penetration by
insurance companies. So, I
believe that by 2025, insurance
industry in Nigeria would have
taken its rightful position as
projected, not in 2020.
What are the main
developments in the
economy that can help to
achieve this growth?
From the angle of
financial inclusion, the youth
occupies about 70 per cent
of the population. With the
youth, technology would be
‘brought to play’ because
they are technology-driven.
Similarly, recent government
projects and policies have
been towards economic
improvement. An example
is the new Lagos-Ibadan rail
line. This rail line will provide
opportunity for insurance
companies because there
will be travel insurance. The
aviation industry may also
provide another opportunity
for insurance if the government
invests in national carrier
again as being planned. The
government has been the
catalyst for business growth
and such efforts will bring about
development in the insurance
industry.
How are new
technologies and
innovation impacting on
•Hassan
the sector’s operations?
The industry has had new
insurance companies come in
with their own technology and
better operational models. One
company recently identified
a way of encouraging clients
in the form of an incentive.
For example, if a client does
not have claim for 12 months,
such a client would be given a
return premium as a gift, which
is an incentive. So clients are
induced when informed that
without a claim for 24 months,
a portion of the premium will
be refunded. This way, other
insurance companies will be
emulating this better way of
attracting clients rather than
under-cutting prices.
How has the Insurance
Industry Consultative
Council been able to impact
on the sector since its
inception?
Since the conception of the
Insurance Industry Consultative
Council, it has held different
national insurance conferences,
and this year’s edition is the
fourth of its series which is
holding in Abuja. The IICC is
the umbrella organisation for
all insurance institutions in
Nigeria. It is made up of the
regulatory body for all insurance
practice in Nigeria, National
Insurance Commission;
Chartered Insurance Institute
of Nigeria; Nigerian Insurers
Association; Nigerian Council
of Registered Insurance
Brokers; and loss adjusters,
Institute of Loss Adjusters of
Nigeria. The National Insurance
Conference is one of those
established channels aimed
at fostering intellectual and
professional development
of insurance practitioners
and further creating a
platform for networking
and exchange of ideas
between industry operators
and critical stakeholders in
the nation’s economy. The
2018 conference would also
highlight the enabling roles
of the insurance industry in
achieving financial inclusion
and by so doing, accelerate
its contributions to Nigeria’s
Gross Domestic Product. The
fact that access to financial
services is concentrated in
urban areas has limited the
people from the rural areas
from contributing maximally
to growth and development
of the nation’s economy. The
strategy recognises various
stakeholders and apportions
roles and responsibilities to
them on the basis of their
comparative advantage.
Why is the IICC focusing
on financial inclusion this
year?
The insurance industry,
financial inclusion should be
the pursuit of making insurance
services accessible at affordable
costs to all individuals and
businesses irrespective of net
worth and size, respectively.
Financial inclusion will strive
to address and proffer solutions
to the constraints that exclude
people from participating in the
financial sector.
There should also be
cooperation among the brokers
in order to avoid rate-cutting.
Hence, with the involvement of
the government, there should
be development in brokerage
firms.
The theme of the conference
this year, which is, ‘Insurance
industry and financial inclusion’
is quite apt, in view of the
policy direction of government
towards including all segments
Nigeria Liability Insurance Pool to explore higher risks
Nike Popoola
The Nigerian Liability
Insurance Pool has
said it is set to expand its
insurance underwriting to
more risky business.
The Chairman, NLIP, Mr
Edwin Igbiti, disclosed this
during the company’s 8th
annual general meeting in
Lagos.
He said, “In spite of the
uncertainties that usually
accompany election cycles in
Nigeria, we believe the pool
will be well positioned to
weather the storm. However,
the pool looks into 2018
with positivity as it prepares
to delve into new areas of
focus among which are the
emerging liability risks, such
as oil and energy risks as well
as forming a new parallel
pool with new members.”
Igbiti noted that 2017
financial period was a
successful year for the firm.
Despite the harsh
economic environment, he
said that the NLIP recorded
a profit of N238.9m which
was 82.56 per cent higher
than the 2016 figure.
The chairman also said
its gross premium rose by 13
per cent to N922.7m in the
year under review.
In view of the
performance of the pool
in 2017, he said the board
recommended N133.79k
dividend per share of N1.
He observed that in 2017,
the insurance industry was
faced with challenges which
emanated from the lingering
effects of the economic
downturn which started in
2016.
According to him, the
effects of the recession,
which manifested in various
sectors as well made the
renewal of most policy
contracts to suffer major
set back.
However, towards the
second and third quarters
of the year, he said the
economy grew for the first
time in over a year especially
in the second quarter.
“Despite the ups and
downs, the pool continues
to engage in its areas of core
operations and will engage in
business opportunities that
are being created through
the emerging liability risks,”
he said.
of the society within the
financial safety net. As of 2012,
according to a survey by the
Enhancing Financial Innovation
and Access, about 39.7 per cent
or 34.9 million adult Nigerians
were excluded from financial
services. So, in order to reduce
the number of the excluded
population, the Central Bank of
Nigeria on behalf of the Federal
Government launched the
National Financial Inclusion
Strategy in October 2012. The
strategy focuses on interventions
that will increase access to
payments, savings, credit,
remittances, pension, insurance
under affordable terms and
conditions. The overall aim is
to empower people, promote
savings, increase the level of
investment by diverse economic
groups, catalyse increased
productivity, improve income,
reduce poverty and promote a
sound, safe, vibrant and stable
financial system.
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The theme bothering on
financial inclusion was as a
result of the realisation of the
gap in insurance penetration in
Nigeria given our population.
If you look back, there has
been clamour for insurance to
deepen penetration and impact
on the individual population
particularly at the grass roots.
This is also meant to increase
investment in technology,
which would help bring out the
benefits in financial inclusion.