Expert Lists Challenges of Insurance Industry
SEC’s hammer falls on them. With what has happened to BGL and Okumagba, it is obvious that the cleansing in the market has begun and everyone is trying to be very cations because if Okumagba, who is CIS president can be suspended, nobody can escape. The only solution is to remain clean,” a stockbroker told THISDAY at the weekend.
Meanwhile, a leader of a shareholders association, SEC’s action has encouraged investors to take dig up past cases against stockbroking firms that were not thoroughly treated by the commission.
“We can see that SEC can now bite and this is highly encouraging because many of us lost significant part of investments to dubious market operators. While we complained in some of the cases, we did not receive any good result because of the shabby way they were handled by the commission. With what has happened, we will have to bring up some of those cases against such operators,” he said.
Before the suspension of BGL, SEC had last month appointed and interim management to run company following complaints by investors. The interim management was mandated to conduct a forensic audit of the company’s operations among others. the recently introduced MTN Nigeria Limited TruTalk+ Tariff Plan.
Following the compliance check, it was confirmed that MTN Nigeria is currently advertising a Tariff Plan called MTN TruTalk+ in the print and electronic media. The NCC investigations showed that MTN Nigeria has already configured this tariff plan on its network and has therefore implemented same, the statement further said.
Ebere Nwoji
Insurance expert and Deputy Managing Director of Linkage Assurance Plc Dr Pius Apere has listed the challenges facing Nigerian insurance industry, adding that these have reduced the industry’s contributions to the Gross Domestic Product(GDP) of the economy to as low as less than one percent.
Apere who is also an actuarial scientist and a chartered insurer in a statement made available to THISDAY highlighted the industry’s challenges as human capacity development, information technology problem, risk and capital management problem, market development challenges, product pricing problem, product innovation and poor image perception problem.
Speaking on the human capacity problem of the industry, Apere said human capacity and capital development are key drivers and critical determinants to success of any company and industry.
He described capacity development as the critical skills required and how such skills are harnessed efficiently in the organisation to attain corporate objectives.
He noted that there is a general shortage of skilled professionals in the insurance industry such as underwriters, brokers, actuaries .
Tracing the reasons for this Apere said generally, there is inadequate and irregular training of staff including IT staff as well as board of directors of companies within the insurance industry relative to the banking industry.
He observed that majority of the insurance companies attract low skilled personnel due to inadequate remuneration package and hence they are unable to retain competent employees.
Furthermore, he said the insurance industry does not support or embrace contribution of other non-insurance special skills adding that they place emphasis on technical skills as against specialised business skills.
According to him, this restricts the growth and development of non-insurance skilled professionals within the insurance industry.
“The lack of training of board of directors on basic insurance operations results in inadequate supervision of executive management activities by the board,
“The demand for actuaries in the Nigerian financial services industry became more pronounced following the introduction of IFRS. Incidentally, in the insurance industry, every insurance company needs to have an actuary, as IFRS requires that every entity’s balance sheet reflects true and fair representation of the obligations (e.g. to policyholders). Thus, the dearth of actuaries in Nigeria would not only affect the insurance companies’ operations but also the oversight functions of the regulatory body. Furthermore, there is lack of awareness about the actuarial profession and what actuaries can do”, he noted.
He noted that some special insurance risks (such as aviation, oil & gas etc.) are not fully underwritten by domestic insurers because of lack of local professional underwriters.
Proffering solution to this, Apere said there is need for engagement of adequate staff with professional background to carry out oversight functions.
He also said that the CIIN in addition to other efforts should ensure that insurance professionals live up to the bidding of true professional in word and in deed, adding that the CIIN should constantly review and expand its curriculum beyond core insurance courses in order to build knowledge capacity.
On information technology challenges, the insurance expert said many companies in the insurance industry do not have a fully automated and/ or integrated computer software system adding that only few companies make use of integrated business application and IT infrastructure to drive business value)..