C-Re Draws Attention to Problems Facing Reinsurance
By Nnamdi Duru
Managing Director of Continental Reinsurance Plc (C-Re), Mr. Adeyemo Adejumo, has drawn the attention of practitioners to some of the practices that have earned the Nigerian insurance industry sympathy from international reinsurers, urging them to put in place measure to reverse the trend.
Some of the practices according to him include non-remittance of reinsurance premium as at when due, less than commendable claims processing measures as well as non-equitable pricing of insurance products among others.
Adeyemo made this known in his address at an International Reinsurance Seminar organised by the company for insurance brokers and other professionals in the industry in Ijebu Ode, Ogun State recently.
He drew the attention to participants to the shortcomings of the industry resulting in dwindling interest of international reinsurers in businesses emanating from the country.
He traced this problem to the industry's dwindling income saying, "our income is dwindling and getting uneconomical, we do not remit premium to them on time as well as hardening position of the international market". These, according to him has resulted in companies being given tough terms with interest payment on delayed premium.
He observed that private reinsurance companies sprang up in 1985 when something similar to the above happened and appealed for support from all strata of the industry in resolving this problem.
"We however need the support of everybody in the market to be able to grow. All of us must realise that we are mutually dependent, brokers, underwriters as well as reinsurers", he remineed them.
Adejumo also appealed to "clients to be professional in their dealing with reinsurers particularly in the area of utmost good faith so that reinsurers will not be pushed to invoking inspection clause in our treaties". "Rendition of accounts and payment of outstanding balances are critical areas that local reinsurers can be strengthened", he added.
The C-Re Managing Director also made a case for due diligence in claims processing saying, "in as much as we encourage settlement of genuine claims as and when due, claims should be properly scrutinised to avoid fraud. Claims should not be settled as a result of pressures from insured, broker or competition", he warned.
In addition to the above, he said "pricing of our products should be adequate to cover current liabilities as well as make provision for future exposures (reserve)".
He then called for a regime of adequate risk rating saying that because the impact of claims settlement is felt most by reinsurers. "Competition is making rates very thin and because reinsurers bear the large claims, the impact is more on us than the brokers pushing for low rates and underwriters accepting the rate. We should ensure proper and adequate rates to sustain the industry", he admonished.
|
