14012020 - 50 years after: Let's revisit issues that caused Civil War

Vanguard, TUESDAY, JANUARY 14, 2020 — 39
Seminar: From left: Adamu Balanti, a director;Sunday Thomas , acting Commissioner for Insurance/CEO and
Olufemi Oluniyi, a director , all of the National Insurance Commission(NAICOM), at a seminar for Journalists
in Kano .
How govt indifference,
recapitalisation, others shaped
insurance in 2019
Stories by Cynthia Alo
Activities in the
insurance
industry in 2019
maintained a slow pace
occasioned mostly by the
non renewal of public
sector insurance for the
third consecutive year.
Consequently, patronage
by some government
parastatals was stalled due
to non-release of funds.
However the industry
saw growth in 2019 as firms
strengthened their retail
offerings while there was
increase in premium rate
of group life.
One of the major
highlights for the year was
the suspension of the
insurance rebranding
campaign project due to
unimpressive response of
some companies.
Other major activities in
2019 include the extension
of the deadline for the
recapitalization exercise;
fake motor insurance
enlightenment campaign
etc.
The rebranding
campaign
Recapitalisation: Deadline extension
will boost fund raising opportunities
—Underwriters
Insurance underwriters
have said that the exten
sion of the recapitalisation
exercise by the National
Insurance Commission,
NAICOM, will allow them
explore other means of raising
funds to shore up their capitals.
According to the underwriters,
this will not only give them
room to explore untapped
means of raising funds but
create deeper understanding of
the benefit of the exercise.
NAICOM had in a circular
dated December 30, 2019, and
signed by Director, Policy and
Regulations, Mr. Pius Agboola,
announced a six months
extension of the recapitalisation
deadline to December 31, 2020.
The Commission said the
need for the extension came after
it reviewed the recapitalisation
plans submitted by operators,
the various levels of compliance
observed, and the inputs noted
from various engagements with
relevant stakeholders.
Commenting on the
development, Chief Executive
Officer, Veritas Kapital Assurance
Plc, Mr. Kenneth Egbaran
expressed confidence that the
extension will avail the
underwriters, room to explore other
means of increasing their funds.
Egbaran told Vanguard that,
it is imperative to note that the
present economy makes it hard
to raise funds and as such the
regulators have done the right
thing in postponing the
deadline.
He said: “You are aware of
what is going on in the capital
market, so the Commission
has done well in extending the
deadline as this would give the
underwriters room to explore
other means of raising funds.
It is the state of the economy
that determines how the
capitals are raised otherwise
the alternative is to look
outside and that will mean
bringing in foreign investors
but primarily the capital is
expected to be raised from the
local economy except we are
expecting a take over from
foreign investors."
In the same light, Managing
Director, Old Mutual General
Insurance Company Nigeria
Limited, Mr. Olalekan
Oyinlade, said, “The end of the
year pronouncement on the
extension of deadline
recapitalization would allow
various underwriters a bit of
more time to ensure that the
benefit of the recapitalization
is not negated."
In a chat with Vanguard, a
top official of AIICO who
pleaded to remain anonymous
said that the extension will
allow other insurance
companies to further perfect
their record and get funds from
their investors to meet up with
the new requirement which is
of huge benefit to the industry.
According to him, many
people believe that extending
the recapitalization will negate
the real sense of the exercise,
adding, "I don’t see it being
swept under the carpet like
others believe because this will
help other companies meet up
with the recapitalization
requirement.
He stated that those in view
that the extension will be
unrealizable are those that
believe that the initial request for
the recapitalization was
politically motivated adding, "if
it is borne out of the need for
sanity and sanctity of the
industry, it will be executed and
it will be seen through by the
industry authorities.
However, an insurance
specialist and former head of
retail business at Cornerstone
Insurance, Mr. Ekeret Glam-
Ikon opined that rather than
extending the deadline, the
Commission should pronounce
the names of those ready for the
exercise and go ahead with them
in the interest of the
policyholders.
According to him, some
companies are ready for the
recapitalisation while some will
never be ready no matter how
long the Commission decides to
stretch the exercise.
He warned that this act could
make a lot of the underwriters
who are not paying claims to
further delay in claims payment
while the policyholders could
decide to invest in other
opportunities."
On December 13 2019,
the Insurers Committee,
which is made up of the
National Insurance
Commission, NAICOM,
as well as all the chief
executives of insurance
companies announced the
suspension of the
rebranding campaign
project.
Introduced in 2018, with
estimated budget of N300
million, the campaign was
geared towards increasing
insurance awareness and
deepening penetration in
the country.
The suspension,
according to the
Committee, became
necessary due to failure of
some companies who
refused to pay up their own
part of the contribution
thereby hindering the
progress of the campaign.
The Committee however
said that the project will be
revisited in the future.
Extension of
recapitalization exercise
On May 20 2019,
NAICOM announced a
recapitalization exercise for
insurance and reinsurance
companies, with June 30,
2020 deadline for
compliance.
This however did not go
down well with some of the
insurance companies as
some of them argued that
the economy did not
present better opportunity
for the industry to strive.
Even shareholders were
not left out in the agitation
and constantly called on the
regulator to extend the time
frame or cancel it outright.
This prompted NAICOM
to extend the deadline to
December 2020.
Fake motor insurance
enlightenment campaign
On October 2nd, the
Nigerian Insurers
Association, NIA,
commenced a campaign
against fake motor
insurance in Nigeria
tagged 'wetin U Carry.'
In this regard, the
Association said it deployed
2020: CIIN urges insurance
operators to embrace
creativity
Chartered Insurance Institute
of Nigeria,CIIN has called
on industry professionals to
deploy more creativity in the sector
to further deepen insurance
penetration in 2020.
President of the Institute, Mr.
Eddie Efekoha stated this in his new
year message noting that year 2020
is a year to put into practice all that
have been preached as professionals.
He said: ''The year 2020 is an
important year for the insurance
industry. It is a year in which we are
mandated to put into practice all that
we have preached as professionals.
''Recapitalization of insurance and
reinsurance companies is no longer
an idea but a reality and the industry
has to embrace it wholly. Its advent
calls for insurance professionals to
embrace creativity and work harder
than ever before for the future of this
industry.
It will not be an easy ride and all
our resources will be stretched thin,
however it is my belief that we will
all profit from this exercise, '' he
stated .
''I would also like to commend the
National Insurance Commission
(NAICOM) for their support for the
Institute and College programmes in
2019. I urge all trade bodies of the
industry namely: Nigerian Insueres
Association, (NIA), Nigerian Council
of Registered Insurance
Brokers(NCRIB), Institute of Loss
over 33 cops in the street of
Lagos to kick off the
exercise.
Operators comment
Speaking on the
performance of the sector in
2019, Managing Director,
Old Mutual General
Insurance Company
Nigeria Limited, Mr.
Olalekan Oyinlade said
that the industry was
thrown off balance with the
performance of the general
economy which insurance
is not insulated from.
“The initial
apprehension over the
non-clarity of the
recapitalization process
also threw operators off
balance,” he stated.
Managing Director,
Veritas Kapital Assurance,
Mr.Kenneth Egbaran, said
that the industry saw
growth in 2019 through
strengthening of its retail
market and the increase in
premium rate of group life.
Way forward
Despite the challenges in
2019, Oyinlade maintained
that for the industry to grow,
operators must continue to
change product offerings
to meet the prevailing
challenges whilst
developing alternative
distribution channel largely
on digital models which he
said is cost effective and
efficient.
He said: ''The industry
focus should be on
developing the less served
middle and mass market.
These sections of the
pyramid need insurance
and the challenge are for
the practitioners to offer
them real solutions that
meet their needs."
Adjusters of Nigeria (ILAN) and
Association of Registered Insurance
Agents of Nigeria(ARIAN)to stay
committed to promoting the
insurance industry's agenda.
Together we can achieve so much.''
''There are many benefits to be
derived from the membership of the
Institute including but not limited to
access to industry reports and
research papers, discounted
examination fees, group life benefits
( to the tune of N500,000) and
permanent disability benefits (to the
tune of N250,000). The Institute
remains committed to offering value
to its members and I can assure you
that more benefits will be unveiled
in the nearest future.
Reiterating his commitments in
advancing insurance education and
professionalism, he said that the
institute will consistently provide
world class manpower with the
highest standard of professional and
ethical training for operating
effectively and efficiently in the
Nigerian and international business
environment.
'' The Institute is our pride and
represents a beacon of light to the
insurance industry. It is my hope that
as stakeholders, we will continue to
lift the Institute higher by actively
participating in its programmes and
activities in 2020, thus making the
year more successful than the
previous.''