Dr. Akin Ogunbiyi, Chairman, Mutual Benefits Assurance Plc has warned that the recent Tier-Based Minimum Solvency Capital (TBMSC) policy recently introduced by the National Insurance Commission (NAICOM) poses serious risk to the growth and stability of the insurance industry in Nigeria.

Ogunbiyi, who chaired the 5^th Anniversary of BusinessTODAY magazine in Lagos, wondered why a Tier-1 composite insurance company in Nigeria should require a solvency capital of N15 billion ($42million) when the average capital requirement in the African insurance market is only $10 million.

He said the new capital policy would be counter-productive, anti-growth and disruptive. He warned that the immediate implementation of the Tier-based rating would lead to:

• Crisis of confidence for the entire insurance industry where only about 7 of the 29 companies qualify under the new standard.
• De-listing of Insurance stocks from the Nigerian Stock market. Insurance stocks already classified as penny stock due to inability to support pricing by regular dividend payments
• osHhHostile take-overs for peanuts especially by foreign investors with short term gains as focus
• It might be practically impossible to fully implement the provision of the Local Content law
• The Rebranding project of the insurance industry may suffer a major set- back as the public perception of some companies and the entire industry will be affected adversely
• There will be significant job loss

“Is it only capitalisation that can drive insurance development in Nigeria giving the experience of other African insurance markets? What has been the contributions and performance of the industry since the 2007 recapitalisation exercise? What level of returns (Return on Equity/Return on Investment) have accrued to the investors and shareholders of the industry ever since? Who are the target investors expected to shore up the new capital call even if there was time?”

The Mutual Benefits Assurance Chairman said he also found interesting recent comments and rather overly simplistic deductions that if the top three banks in our country have capital in excess of N300 billion each, then the three top insurers with between N14 billion and N25 billion each, is a sign of under-performance by the entire industry and its failure to most assuredly complete the Nigerian financial industry loop.

“Today in Nigeria, government (at all levels) pays the biggest premium whenever it decides to insure its assets. The NNPC account, for instance automatically makes whichever company gets the business the number one in the industry. So, making it exclusive to companies in Tier-1 of NAICOM’S TBMSC will definitely promote the growth of a few practitioners. We would thereby by default create behemoths.

Unhealthy competition, unethical way of doing business, popularly called rate-cutting, inadequate technical knowhow, and lack of insurance penetration; are big road-blocks in the way of development and growth of the industry. So, how will a policy of exclusion solve these problems?

Let us ask ourselves: will hierarchal standards, rules, statutes or regulations expand existing market boundaries? Will they open unknown markets or untapped market spaces?”

He made reference to the pension industry which was the traditional business of insurance before the Pension Reform Act of 2004, thereby pushing pension assets to over N7 trillion through technical capacity, good governance and best practices as against the figure of N70 billion for the several decades it operated under the insurance industry.

“I believe today’s shrinking profit pool and the overall performance of our industry can only be checkmated by innovation, technical capacity, healthy competition, adoption best practices, governance structure and creating “blue oceans of untapped new markets.”

It was commendation all through for the Board and Management of Linkage Assurance Plc when shareholders of the company who had waited for so long for a dividend got five (5) kobo per share pay out, at its 24^th Annual General Meeting held in Lagos yesterday.

The shareholders who spoke glowingly on the achievements of the underwriting company in 2017 financial year called on the management and board to ensure sustenance of the growth.

“We urge you to reinforce your marketing team and distribution channels so that there will be more growth in premium and profitability for the company in the coming years”.

Joshua Bernard Fumudoh, Chairman, Linkage Assurance Plc  who announced the result said the company in 2017 recorded a gross premium written of N4.10 billion as against N4.03 billion in 2016, while the gross premium income was 6 percent up to N4.186 billion in the review year as against N3.96 billion the past year.

Linkage Assurance Profit Before Tax rose by 218 percent from N942.68 million to N2.996 billion in 2017, while the Profit After Tax also appreciated significantly by 431 percent to close at N2.891 billion in 2017. This is as total assets appreciated 15 percent to N23.3 billion in 2017, from N20.33 billion in the previous year.

Fumudoh also said the company paid out a total of N1.038 billion in claims in 2017 as against N613.2 million in 2016, underscoring its commitment to her policyholders.

He noted that the company was determined to take advantage of developments in the economy by developing strategic initiatives such as deployment of online portal for selling of motor insurance, as well as repositioning its bouquet of retail products like the Third Party Plus (a budget friendly motor insurance plan) to ensure sustainable growth for the company in 2018 and beyond.

“Continuous growth in customer satisfaction, productive sales in the market and impeccable underwriting and risk management practices will set us up for achievable greatness in 2018, the chairman said.

“We are focused on sustaining and surpassing the gains of 2017 and enhancing reputation and performance. We will further develop our strategy to deliver value to all our stakeholders within a governance framework of prudence and effective oversight as a board.”

Daniel Braie, Acting Managing Director of the company going into the future, the company will continue to refine its strategy in line with the political, economic, sociological and technological changes in the industry.

“Also we will continue to develop innovative products, alternative channels of distribution and strategic initiatives that will enable us achieve our corporate goals and objectives. With a medium-to-long term perspective, we believe that we will benefit from growth in these initiatives”, Braie said.

The non-availability of foreign index bond is impeding desired growth of the pension fund assets, the Acting Director-General, National Pension Commission (PenCom), Mrs. Aisha Dahir-Umar has said.

The Acting DG who was represented by the Head, Corporate Strategy and Research Department, Dr. Farouk Aminu spoke at the just concluded Insurance and Pension 2018 Conference held in Lagos said the fund has grown to over N8.2 trillion.

He believes that pension fund would have overshoot if there were better instruments in the country to invest the fund.

He said out of about 200 companies listed at the Nigerian Stock Exchange (NSE), only 60 qualify for pension fund investment.

He stated that the Commission is not able to allow investment of the fund at the capital market, noting that their hands are tied.

He called for the enlistment of blue chip firms including Chevron, Mobile, Shell, MTN Nigeria, Glo among others at capital market to allow foreign index bond to be available in the country.

He said the Commission is concerned that if there are better instruments, the return on investment to the fund owned by contributors and retirees under the Contributory Pension Scheme (CPS) will be more.

He said: “If there were better instruments, I believe the pension asset would have overshoot. The return on investment of pension fund was 16 per cent and inflation was above 15 per cent. Unfortunately, this is the reflection of the entire financial system in the country. If you look at the NSE, there are just 200 companies listed in the exchange and if we have to go by our stringent regulation, only about 60 of them qualify for pension fund investment. So the money is big when compared with the companies that are qualified to access it.

“Also, we are yet to have an index bond in the country, whether regulatory index or any other index bond. The Commission has been pushing for such bonds to be issued in the market so that the pension asset can be invested on such instruments. Unfortunately, we don’t have that yet. Yes, we have 70 per cent of the fund invested in Federal Government Securities but this is nothing. This is because we have only seen 16 per cent return on the FG securities and up to 18 per cent in 2016.

“Recently, there is the push for the fund to go into the telecom industry but unfortunately, we are unable to do so. If there are companies like MTN, Glo among others listed at the capital market, then we would have been able to invest in these kinds of companies. Unfortunately, that is a reality in the country and I hope that we would have better instruments.”

He cited an instance where former President of South African, late Nelson Mandela in a black empowerment mission took a decision that pushed foreign companies sell their shares to black citizens, noting that this can be done in Nigeria to make the blue chip companies list their shares at the capital market.

He observed that aside from MTN that is not listed, Glo is also not listed on the capital market.

“If these companies can list at the capital market, it will give opportunities for Nigerians to invest in the companies. Sectors like banking, insurance, pension will also benefit from such development”, he added.

One of the major achievements of the Pension Reform is the establishment of robust legal and institutional frameworks for the administration of pensions in Nigeria.

The reform has instituted transparent processes in the operations of the National Pension Commission (the Commission) and the Pension Fund Administrators (PFAs) in the retirement benefits payment process, enforcement of compliance with the provisions of the Pension Reform Act (PRA) 2014 as well as other operations of the industry.

Consistent with the above, the public is hereby invited to note that payment of retirement benefits under the Contributory Pension Scheme (CPS) is made by the PFAs strictly from the Retirement Savings Accounts (RSA) of pension contributors.

The RSA has three (3) basic components, namely, the monthly pension contributions; the returns on investment earned for the contributors by the PFAs; and the retirement benefits that accrued under the defunct Defined Benefits Scheme.
Section 7 of the Pension Reform Act 2014 and the Regulations on the Administration of Retirement & Terminal Benefits demand that the three (3) components of the retirement benefit must be consolidated in the RSA before any payment is made by the PFA.

Accordingly, payments of retirement benefits are made promptly into the bank accounts of the retirees except for cases where the employer delays in the release of funds to pay the accrued rights component of the retiree’s benefits.

In the performance of its statutory mandate, the Commission issues Compliance Certificate to organisations wishing to bid for contracts with Federal Government institutions, pursuant to the requirement of the Public Procurement Act 2007.

Furthermore, as it is the case with all institutions, the Commission engages vendors and services providers from time to time. In addition to the legal safeguards and institutional checks and balances of the CPS, the Commission, as the regulator of all pension matters in Nigeria, has entrenched good corporate governance practices, high ethical standards and zero tolerance to any form of malpractice in the conduct of its staff and the PFAs that manage the pension assets.

In this regard, the Management and staff of the Commission do not receive money or other forms of gratification to facilitate payment of retirement benefits, issuance of Compliance Certificates and engagement of vendors and service providers.

The Commission does not also give/accept kickbacks to/from any individual or organisation in the discharge its responsibilities.

The members of the public, particularly pensioners and pension contributors are, therefore, reminded that no financial or other form of inducement should be given to anybody to facilitate payment of retirement benefits, issuance of Compliance Certificate or engagement as vendor or service provider. Indeed, members of the public are earnestly requested to immediately inform the Commission, anyone who makes any demand for any form of inducement in whatever form or disguise.
The Commission remains totally dedicated to the safeguard of your rights and payment of your retirement benefits as and when due.

L-R: Mr. Lana Loyinmi, Head Contribution & Bond Redemption, National Pension Commission; Mr. George Onekhena, Deputy Commissioner, Finance and Administration, NAICOM; Mrs. Yetunde Ilori, Director General, Nigeria Insurers Association; Alhaji Bala Zakariya’u, past president, Chartered Insurance Institute of Nigeria and Chairman of occasion, and Mr Adebayo Adeleke, Managing Director, Lancelot Ventures Ltd, during the  3rd Annual National Conference of the National Association of Insurance and Pension Correspondents (NAIPCO) on The Role of Stakeholders in Developing Insurance and Pension Sectors held in Lagos.

The Minister of Finance, Mrs. Kemi Adeosun has called on Nigerians to build up a solid financial plan for future through life insurance planning.
Adeosun made this known at the third National Conference of the National Association of Insurance and Pension Correspondents (NAIPCO) held in Lagos. This year’s conference has the theme “The Role of Stake Holders in Developing Insurance & Pension Sectors.”
The Minister, represented by the Deputy Commissioner for Insurance, Finance and Admin, George Onekhena said life insurance holds the key to wise financial planning and is panacea for poverty alleviation among Nigerians at all levels including grassroot dwellers.
She urged Nigerians not to neglect life insurance, even as it is a common habit, noting that this is equal to building one’s foundation on a shallow ground. She also urged Nigerians to make enquiries on the particular life insurance they want to buy as well as how to go about it.
She also said that those in doubt could engage the service of
insurance brokers, adding that this has become necessary because nobody knows the day of his death and it will be disastrous for anyone to leave dependents without benefits.
Speaking on the challenge facing insurance and pension operators in Nigeria, she said people hardly tell the public when they get benefit from these two sectors, citing the instance of quantum of retirement benefits paid on monthly basis by Pension Fund Administrators (PFAs) to retirees and also the magnitude of claims paid every year by insurance firms in the country.
The annual NAIPCO conference has grown to become the premier forum that brings pension and insurance operators, regulators and stakeholders together to discuss the state of both sectors and the way forward.

Linkage Assurance Plc has secured the approval of the National Insurance Commission (NAICOM) to underwrite agric insurance in the Nigerian insurance industry.

The ‘no objection’ nod will enable Linkage support the farmers and service providers in the agricultural value chain for greater sustainability and economic growth.

Among the products approved include Linkage Assurance Crop Insurance Solutions; Linkage Assurance Farm All Risk lnsurance; Linkage Assurance Farm Motor lnsurance and Linkage Assurance Livestock lnsurance solutions.

Linkage Assurance Management in a statement made available to journalist said the Nigeria’s agribusiness sector needs insurance to remain sustainable and achieve long term growth expectation.

Linkage said stakeholders in the agricultural value chain needs to embrace insurance by reducing retained risk and transferring the burden to insurers for effective risk management.

With this approval, Linkage Assurance Plc is now well positioned to broaden its product offerings to consumers, which is in line with the federal government objective to deepen insurance penetration in Nigeria.

Linkage Assurance by this development is strategically accelerating its business objective of building a dominant company in the Nigerian insurance industry.

Linkage Assurance Crop Insurance Solutions provides cover against unavoidable loss of crops or resulting directly from the insured perils, example flood, drought, excessive rains, hailstorm, diseases and pest, with covers including Weather lndex Crop Insurance; Area Yield – lndex Crop lnsurance and Multi-peril crop insurance.

The Linkage Assurance Farm All Risk lnsurance is designed to cover the farm buildings/contents, farm products and machineries against theft and fire. It also provides cover on general accident for farm staff and farmer’s legal liability.

While, Linkage Assurance Farm Motor lnsurance protects the insured for loss of or damage to vehicles used in the farm or agricultural business, damage to Third Party property including bodily injury and death to third parties caused by accident.

Linkage Assurance Livestock lnsurance solutions is specially designed to cover the farmer’s stock with one simple policy, which can provide immediate protection against death due to accident; death due to illness or disease; loss of use due to accident; and loss of use due to illness.