By Rosemary Onuoha
After a deliberate or otherwise protracted delay, the National Insurance Commission (NAICOM) finally gave operating license to FBN Life Assurance Limited on September, 1 2010 to commence insurance business in the country.

FBN Life is licensed to do life insurance business in Nigeria with an initial share capital of N2billion. First Bank of Nigeria has 65 percent equity stake in the firm while Sanlam Group has 35 percent equity and the Chief Operating Officer is also from Sanlam. Sanlam as at the end of the last financial year controls an asset base of over $45 billion and operates in five continents of the World.

It will be recalled that FBN Life applied for an operating license since 2007 but NAICOM was not too enthusiastic in granting the license on the grounds that a new insurance company might not be bringing anything new to the table because not much has been seen with the companies on ground.

To send home its point, NAICOM called for a reduced number of underwriters noting that about 20 underwriters will be ideal for the sector as against the 59 companies that are currently operating.

Commissioner for Insurance (CFI), Mr. Fola Daniel went ahead to advise operators in the industry to embrace mergers and acquisition and not wait for the regulator to compel them to do so, stressing that underwriters can voluntarily come together and reduce the number of insurance players from the present 59 to about 20 and the industry will be better for it.

Despite the desire of the regulator, the might and strength of First Bank Plc was brought to bear at the end of the day as FBN Life was eventually licensed. But the question still lingers; what new thing is FBN Life bringing to the table?

The Group Managing Director/CEO of First Bank Plc, Mr. Bisi Onasanya has assured that the entry of First Bank Plc into the insurance market with FBN Life Assurance Limited, the insurance landscape will change for the better.

According to him, FBN Life will ride on the professionalism already built by First Bank and Sanlam Group of South Africa, the second largest insurance group in South Africa, to deliver services unparalleled in the industry.

Stakeholders are however not enthusiastic about these promises because some insurance companies that have such “large” banks as parent bodies have little or nothing to show for such backings except that they merely cater for the insurance needs of these so called parent bodies and affiliates.

Another major challenge in the insurance industry is that since the close of the consolidation in the sector, most companies that are said to have introduced new products have merely recycled existing products and crashed premium rates. This has compelled experts to consistently call for caution, warning practitioners to create genuine products that will cater for the welfare of Nigerians.

What FBN Life is bringing

Managing Director of the company, Mr. Valentine Ojumah stated “We are especially mindful of the need to be increasingly innovative in order to meet the needs of our diverse stakeholders. While we appreciate the multiplicity of products in the industry in which we operate, rest assured that our product development and services offerings would resonate timely intervention to optimize risks solutions and dynamic responses to all your insurance needs.”

“Drawing from the extensive network of First Bank and technical experience of Sanlam across Africa, we will be playing a significant role in the development of insurance in Nigeria. Our operations have been structured to ensure that we can reach the uninsured in all parts of Nigeria in order to increase the very low insurance penetration in Nigeria” he noted.

He said with over 500 outlets of First Bank of Nigeria plc and a robust IT facility of excellent, the company would take insurance to the nook and crannies of the country so that every potential insured is reached to have one.

Advice from experts

Barring his mind on ways in which FBN Life can break even, former commissioner for Insurance (CFI) and chief executive of Shepherds Insurance Brokers Chief Oladipo Bailey, stressed that the major challenge facing the insurance industry is to find out ways and means capable of providing the population with products that will match their purchasing power and living standard, and if FBN Life can successfully achieve this, then the company can go places.

Mr. Yemi Soladoye, an industry expert stated that what new companies coming into the market can do to have an edge over others is to study the peculiar situation of the country and fashion products that will suit the situation.

Since confidence in the insurance industry from the general public tends to be lacking, Soladoye noted that insurance companies should give the consumers things of benefit to earn their loyalty so as to make the consumer willing to part with his money.

Although Onasanya has said that FBN Life will dominate the insurance industry with superior products, prompt payment of genuine claims and excellent services because First Bank’s foray into insurance is based on its resolve to deepen penetration in the insurance market and cater for the retirement plans of its pension customers, experts are of the opinion that the reach of the company should go beyond its customer base.

FBN Life’s promise
As FBN Life gears up to take a huge share of the insurance market,  Ojumah  said the company has designed its operations to consistently reflect integrity, innovation, professionalism, respects for individuals and excellent quality, adding  “At FBN Life, integrity will be our watchword.

We will remain reliable and responsible to our customers and stakeholders as a worthy child of the legendary First Bank Group.”

Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.