PRESENTATION BY THE COMMISSIONER FOR INSURANCE, MR. O.S THOMAS ON ‘THE STATE AND ENFORCEMENT OF COMPULSORY INSURANCES’ AT THE OFFICIAL VISIT TO HIS EXCELLENCY, THE EXECUTIVE GOVERNOR OF EKITI STATE

Protocols!

I am delighted and honoured by the acceptance of His Excellency, the Executive Governor of Ekiti State, Dr. John Kayode Fayemi to meet with the representatives of the National Insurance Commission on a courtesy visit that seeks to address areas of mutual benefits for the State, the People of Ekiti State and the Nigeria Insurance Industry.

Your Excellency, I bring to you the good wishes of the Board, Management, Staff of the National Insurance Commission and the Insurance Industry in Nigeria.

The National Insurance Commission (NAICOM) is a statutory agency of the Federal Government established by the National Insurance Commission Act 1997 to regulate and supervise the Nigerian Insurance Sector. The Commission is the adviser to the Government on all insurance related matters

The Commission derives its regulatory and supervisory powers from the NAICOM and Insurance Acts 1997 and 2003 respectively. Consequently, Insurance/Reinsurance Companies, Insurance Brokers, Loss Adjusters, Agents and insurance activities generally fall within the supervisory and regulatory purview of the Commission.

It is however imperative to reiterate that the Financial Services Industry is central to the growth and sustainable development of any nation and state because of its direct impact on access to finance, catalyst to improved income, poverty reduction and stability in the financial system.

As a subset of the Financial Services Industry, Insurance industry is a pivot to guarantee the sustainability of growth and development of the State and its people.

We have therefore noted the necessity to plant “Insurance” and “People” at the center of any equation that tends to create, enhance, sustain and manage growth and development in any economy.

As a people, human activities have associated risks and in spite of every precautionary measure to avoid the occurrence of losses or damages, the unexpected still occur.

In consequence of the losses the victims are prone to sufferings which in many cases may lead to total impoverishment of a large proportion of those affected. To ameliorate the situation of victims, laws have been put in place for an arrangement that will ensure that victims and especially third parties are adequately compensated.

The objectives of protecting third parties and relieving the government of the avoidable burden of compensation from the meager wallet of the government led to the enactment of various laws on compulsory insurance products.

Over the years, the Commission has embarked on series of programs aimed at a nationwide massive public enlightenment with respect to compliance with the laws on compulsory insurances.
Your Excellency, you are please invited to note that relevant Laws of the Federal Republic of Nigeria have made the following Insurances mandatory:

a) All Buildings under construction that are more than two (2) floors (Builders Liability);

b) All Public Buildings including Schools, Offices, Hotels, hospitals, Markets (Occupiers Liability)etc;

c) Group Life Insurance for all Employees of both Public and Private Sectors;

d) Professional Indemnity for all Medical Practitioners and

e) Third Party Motor Vehicle Insurance in respect of death, injury or damage to

the property of third parties.

It is on the strength of the above that the Commission is seeking collaboration with the State government in the enforcement of the above mentioned compulsory insurances in the State. As the Chairman of the Nigerian Governors’ Forum there is no better place to start the campaign than Ekiti State.

Your Excellency, permit me to briefly highlight the benefits of this collaboration with State Government as follows:

a) Financial Compensation to the families of insured citizens who may become victims of a disaster through loss of their properties or become disabled in event of occurrence of insured accidents/disasters, etc;

b) A robust group life insurance policy made compulsory by the Pension Reform Act 2014 gives hope to the workforce who will be ready to go extra mile in carrying out assign duties knowing fully well that the employer has made provision for the dependant in event of the unexpected.

c) Creation of employment opportunities for citizens of the State

d) Provision of grants and Fire-Fighting Equipment for the States’ Fire Services by NAICOM from the Fire Fund as stipulated in the Insurance Act 2003;

e) Reduction in the government expenditure in event of disaster that may affect the citizens of the State by shifting the burden to the risk-bearers (Insurance Companies).

f) Free Insurance and Risk Management Education and Enlightenment programme for the citizens of the State; and

f) Creation of additional source of internally generated revenue (IGR) for State Government in collaboration with your relevant Ministries and Agencies.

Conclusion and Prayers

His Excellency is requested to graciously consider the benefits of the proposed collaboration for the enrichment of the State and the sustainability of the Nigeria economy at large.

His Excellency is please requested to domesticate the compulsory insurances in the State and create a structure that can be supported by NAICOM in the enforcement of the compulsory insurances.

We therefore pray and recommend His Excellency’s nomination of Agency of the Government that will serve as liaison office with the Commission in this collaboration.

The nominated agency may be requested to work with the Team of the state who shall be dedicated to this collaboration and recommend appropriate measure to domesticate the enforcement of the compulsory insurances in the State.

Your Excellency, once again I wish to profoundly extend my sincere appreciation to the people of Ekiti State, staff of the Governor’s Office in acknowledgement of the warmth reception and hospitality received since my arrival into the State.

WAICA Reinsurance Corporation Plc has said that it’s Gross Written Premium increased by 21 percent to $70.3 million as at the end of the 2019 financial year from $58.0 million in 2018.

According to the company’s 2019 annual report and financial statement, Group Chairman, Kofi Duffuor said that year 2019 was another year of improved financial performance indicating that they are a much stronger reinsurer today than a year ago.

The financial report stated that net earned premium went up by 11 percent to $58.1 million from $52.6 million.

While commission expense went up by 10 percent to $17.6 million, from $16.1 million, claims incurred increased by 11 percent to $18.7 million from $16.9 million.

The report further stated that technical profit climbed by 13 percent to $23.2 million from $20.5 million while underwriting profit went up by 64 percent to $5.0 million from $3.0 million.

Management expenses went up by four percent to $18.2 million from $17.4 million, investment & other income went down by 16 percent to $3.4 million from $4.1 million.

Meanwhile profit before tax went up by 42 percent to $9.7 million from $6.8 million, cash and investments went up by seven percent to $88.9 million from $83.3 million.

Meanwhile speaking on the performance of the company, Duffuor said: “Gross Written Premium (GWP) grew from $58 million to $70.3 million representing 21% growth over 2018. Facultative business contributed 75 percent of the 2019 premium income while Treaty business brought in 25 percent. Year on year, facultative business grew by 24 percent whilst that for treaty grew by 13 percent.

“Except for COVID-19, whose impact we cannot currently predict with certainty, we have set the platform for a greater future, established strong financial, technical and operational paths that will spur us on to deliver quality service to business partners and build shareholder value. Significant progress has been made against our group strategic goals.”

Continental Re has reported, as at half-year 2020, strong growth across all key metrics. It said gross premium income at NGN26.8bn ($71.7m) reflects 27% growth over 2019. Underwriting profit at NGN2.7bn ($6.9m) grew by 442% (2019: NGN457m/$1.3m).

The success comes amid the Covid-19 crisis. Dr Femi Oyetunji, group managing director, said: “These results come as we brace for the impact of the Covid-19 crisis, which continues to unfold. We remain cautiously optimistic regarding prospects for the year overall and, in conjunction with our partners, we look forward to better times ahead.

“We remain fully committed to playing our part in supporting our partners and the wider community through the pandemic, including prioritising financial donations through industry bodies in our various jurisdictions for sustainable and equitable use for the benefit of local citizens.”

Investment and other income at NGN1.4bn/$4.6m (2019: NGN1.2bn/$3.6m) reflected a 30% year-on-year growth, the company reported. Profit before tax at NGN4.4bn/$12.3m (2019: NGN1.1bn/$3.1m) represents a 300% increase.

“The strong contribution to the group’s half-year results from our entire network, with offices in Anglophone west Africa, east Africa, southern Africa, CIMA and North Africa, is a testament to the resilience wrought by our operating model that is anchored on geographic diversity. We shall continue to adapt and improve this model as we strive for superior efficiency,” said Dr Oyetunji.

At the same time, Continental Reinsurance Plc announced a change in the ownership structure of Continental Reinsurance Ltd (Botswana). After its recent acquisition of a minority 40% stake in the company, through its holding company, CRe African Investments Limited, from Botswana Insurance Company Ltd, Continental Reinsurance now holds 100% of the issued ordinary share capital in the subsidiary.

Dr Oyetunji commented: “The acquisition means not only growth in economic size, but also presents us with an opportunity to enhance our strategic influence and broaden our market appeal through the expansion of stakeholder segments that we actively interact with.

“Building on our talent growth and diversity strategy, we have appointed Francis Nzwili, previously with our Nairobi subsidiary, as managing director of the Botswana business. Francis comes on board with a wealth of experience in underwriting and business development that significantly complements the strength of the existing team. The position of managing director was previously held by Cas Hansa, who has taken up new strategic responsibilities as group head: underwriting and claims,” he added.