20 February 2013

Nigeria: No Premium No Cover' Is Paying Off, Says Operators

Contrary to the expectation of many insurance stakeholders that premium income would nosedive as a result of the enforcement of the "no premium no cover" policy in the industry, operators said their operations have really improved with more premium collected in the first month of this year.

Some of the insurance executives, who shared their experiences on the impact of the policy six weeks after, said that it has been rosy all through.

According to them, they don't need to wait up to April or May to collect premiums for risks underwriting from the beginning of the year and as such, they now expect an investment income from their premium earnings.

Fielding questions on the impact of the policy on the performance of insurance companies, the Managing Director of Sovereign Trust Insurance Plc, Mr. Wale Onaolapo, said the experience of his company had been good.

According to him, in as much as business written for the first month of the year had not fallen short of that figure for the corresponding period of last year, the good thing is that by the end of this month, the company would have received all the premium for the covers.

He said that his firm would not have to wait till the April or May to receive premium for covers, including the oil and gas business, adding that the premium would have hit the company's account by the end of this month.

He also stated his belief that insurance brokers were also happy for the policy since they did not need to wait for too long to get their own brokerage for businesses they brokered.

Also, the President Nigerian Council of Registered Insurance Brokers (NCRIB), Mrs. Laide Osijo, told InsPen Online that her firm has within this period received more than what it used to get in a year.

"We are coping very well with the policy, as far as my company is concerned, we have received in this month, more than what we normally get in a year.

"Three months before the commencement of the policy, we wrote our clients, to inform them that 'no premium no cover' has come to stay, effective from January 1. We have to prepare the mind of our clients for January renewals and those also within the first quarter. We made sure we never held cover for anybody without his or her money.

"I have reasonable clients that know what insurance is and they have being cooperating. Even for most of the government jobs that I do, we had our letters of appointment very early this year," she said.

The Managing Director, Lectern Insurance Brokers Limited, Mr. Tunde Oguntade, however observed that though the policy might be tough, the operators were trying to adjust because it was to the advantage of every operator in the industry.

Late last year, the National Insurance Commission (NAICOM) issued a "Guidelines on Insurance Premium Collection and Remittances", signalling the death of providing insurance covers on credit and guiding both insurance brokers and underwriting companies on to go about collecting and remitting insurance premium to beneficiaries.

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