Lagos, Sept. 10, , 2023: Some financial experts have charged operators in the insurance and pension industries to adopt more creative and innovative ways in their business approaches.
They gave the advices at the 8th annual national conference of the Nigerian Association of Insurance and Pension Editors (NAIPE), held in Lagos.
The theme of the conference is, “Role of Insurance and Pension in Building Sustainable Economic Growth under the New Government”.
The experts said that the operators must develop new products and promote excellent service delivery to grow the sectors.
In his contribution at a panel session, Managing Director/Chief Executive Officer, Scib Insurance Broker, Mr Shola Tinubu, urged government at all levels to provide an enabling environment, backed by relevant regulations, to grow the sectors.
Tinubu advised the regulators to give the operators the liberty to choose their own ways of raising capital.
He said: “In the insurance sector, capital has been driven by statutory requirements.
“We are talking about the regulator mandating the players to get certain quantum of capital without creating grounds needed to raise it.
“It means that companies have to strive for capital just to stay in business and what has happened in the various rounds that we had was that there was no creative idea for channelling the capital.
According to him, if any company decided on its own to go to the capital market to raise capital, such a company will channel that effectively for the growth of the business.
Tinubu noted that the industry needed a situation where operators would initiate capital level and then use it to follow up investment ideas.
The managing director said it was imperative for investment managers to digest investment ideas and identify the type they needed.
He explained that operators did not need capital for the sake of raising it, but for investment in opportunities that would yield higher returns.
In his view, Managing Director, ARM Pension, Mr Wale Odutola, said that every household had a need for basic insurance and basic pension plan.
Odutola, represented by Mrs Abimbola Suleiman, Executive Director, Investment, ARM Pension, noted that insurance and pension had gone a long way in improving the lives of people.
He explained that government alone could not engender sustainable economic growth, as such, insurance and pension should be encouraged among the rural dwellers to better their lots.
“When insurance handles risks for businesses and the Contributory Pension Scheme (CPS) takes care of pension liabilities, this will go a long way to ensure productivity and growth in the financial sector.
“There are currently nine million people in the CPS net, but this is abysmally low when compared to the nation’s population.
“Hence, there is need to get all state governments involved and the participation of the informal sector in CPS,” he said.
Ms Prisca Soares, former Secretary General of the African Insurance Organisation (AIO), said that lack of skilled manpower, especially in the area of dearth of Actuaries, was challenging the insurance industry.
Soares noted that the industry needed to take a deliberate attempt to develop its manpower and solve this major challenge, with regards to financial reporting.
She explained that investment in technology, needed for actuaries, had been a challenge over the years and had become more critical.
“When you do risk base capital, you need actuaries to get it right. The insurance industry needs conscious efforts to address this because it is critical to their business,” she said.
Also, Mr Oguche Aguda, Chief Executive Officer, Pension Operator Association of Nigeria (PenOp), said the insurance and pension sectors face the same challenge of public confidence.
Oguche represented by Mr Akinbola Akintola, Head, Research Department at PenOp, charged operators in both sectors to work on their image.
He added that if there was no confidence, there would not be growth and without that in the two sectors, the country’s economy cannot grow.
The Group Managing Director, Consolidated Hallmark Insurance(CHI), Mr Eddie Efekoha, harped on the need to enforce compulsory insurances and pension, as the era of non-payment of claims were over.
Efekoha, represented by Tunde Daramola, Director, Finance at CHI, urged both industries to be honest with their businesses, gain consumers’ trust and also bridge their expectation gaps.