Mr Ken Aghoghovbia, Regional Director, Africa Reinsurance Corporation (Africa Re) is positive about the business-changing opportunities  in 2011  in terms of profitability and adhering to business ethics that tend to speed up the growth of an individual company and by extension, the entire industry. In this interview with Favour Nnabugwu, he speaks  on quite a number of issues affecting the insurance industry.
Excerpt.

Readiness of insurance market to boost capacity
I am very optimistic that the market will take advantage of the Local Content Development Act particularly because it is going to be propelled by the guideline released by the National Insurance Commission (NAICOM). For the 2011 business year, the impact of this law will be minimal but going forward, I think we will begin to see the impact on the industry.

Insurance market review for 2010
I think the market continued to develop positively. Yes, we know many companies had some challenges because of the stock market in terms of asset value. We also know that liquidity became a problem, but overall, we saw some positive developments. I think also that with the tendency towards the International Financial Reporting Standard (IFRS) and insistence of the National Insurance Commission (NAICOM) to do the right thing in terms of rendering of accounts, I see insurance companies embracing improved reporting and more international acceptability.

2011 business renewal and advice for industry operators
I would advise the industry operators to read the guideline, which I think is in the interest of the industry. The more they study the guideline and follow, the less problems they will encounter in trying to play in the sector.

Expectations in the New Year
I think in 2011 we will be coming out from the global financial crises. The economy is stabilising if not improving and people have woken up from the shock of the stock market and the global financial crises. One therefore expects a more sustainable economy, and with the financial services sector speedily embracing the IFRS, I believe we will witness higher level corporate governance this time.

Therefore, we expect a more professional industry in 2011; we expect an industry that will grow even more than the growth in 2010 and we look to more profitable insurance companies in 2011.

Reinsurers’ view on appropriate pricing
From the reinsurers’ perspective, we find the rates getting better, reasonable, and comparable to what you find in the international market. We believe the reinsurers will write profitably in 2011 going by the figures coming in from the companies. We also observed some improvement in terms of underwriting.

Market agreement by underwriters
I honestly would not know the extent the market agreement as signed by the underwriters impacted on risk pricing. I know some companies adhered to it though we also heard that some of them did not.

However, for the reinsurers because of the price of risk in the international market we remain stable, and like Africa Re we insisted on proper pricing and where the rates are not reasonable, such businesses were declined.

2011 oil and gas insurance guidelines
I think the guideline is a very good development. It will bring out a clearer expectation in terms of what companies should do; what the international oil companies (IOCs) should be doing and my understanding is that it will result in all the companies participating in the oil and gas business. Therefore, we expect an improvement in income for the local insurance market.