'Government Debt Hampers Long Term Planning'
Insurance
The Nigerian insurance industry has blamed the difficulties it experienced with long term planning last year on government's failure to settle outstanding insurance premium and policy inconsistencies.
The outgoing Chairman of the Nigerian Insurers' Association (NIA), Mr. Godwin Alegieuno, stated this at the association's 33rd Annual General Meeting in Lagos recently. He also disclosed that insurers are getting set to contribute more to the national development, tapping into opportunities created by the new Pension Act.
Alegieuno stated that the industry recorded a 19.89 percent increase in gross premium income last year, rising from N41.9 billion in 2002 to N50.2 billion in 2003.
In the same vein, the industry, according to him, paid out more claims last year as against what it paid out as claims the previous year. The nation's insurers paid a total of N22.9 billion claims in 2003, a 49.67 percent increase over the N15.3 billion paid out in 2002.
The picture he painted was not good enough for the industry and he blamed it on failure on the part of government to honour its obligations to insurers in addition to policy inconsistencies as well as poor performance of macro-economic variables.
"The above scenario has not been encouraging as most companies were put under severe pressure. The unimpressive performance of various macro-economic variables coupled with government policy inconsistencies and inability to settle its indebtedness to the industry have several implications for insurance business as it makes long term planning very difficult and painful", he regretted.
He however disclosed that consequent upon the improved advocacy in the industry, "NIA has made a representation to the Federal Government", expecting a positive response on the debt owed insurers by government.
On the pension reform, Alegieuno observed that the new Act posed enormous challenges to underwriters. The association on its part considered the opportunities open to insurance companies under the new law and was preparing its members to increase their contribution to national development, he said.
"We have also analysed the business opportunities inherent in the reform and are preparing our members to use them as a strategy to enhance the contribution of insurance industry to the economic development of the nation.
A series of workshops and seminars have been lined up towards achieving this objective".
Alegieuno, who regretted the lean financial purse and dearth expertise of individual insurance companies operating in the country urged them to support the specialist company being promoted by NIA for them to meaningfully tap into oil and energy business opportunities in the sub-region.
In addition to the above, Alegieuno disclosed that the association has reached out to some government agencies with the aim of enhancing security and business of insurance through records and relevant statistics. The agencies approached include the Federal Fire Service, Nigeria Police and the Federal Environmental Protection Agency (FEPA).
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