By ROSEMARY ONUOHA

Although there are  complaints from insurers that conversion to the International Financial Reporting Standard, IFRS, is highly capital intensive, some operators still believe that it will grant comfort and confidence to foreign investors to come into the insurance sector for business.

Managing Director of CrystaLife Assurance Plc, Mrs. Oluseyi Ifaturoti in an interview with Vanguard in her office in Lagos recently said that IFRS is tending towards best practice.

Ifaturoti said, “Conversion to IFRS may be expensive but it is good because it is tending towards best practice, towards good exposure, towards a lot of integrity and transparency. And it will grant comfort and confident to foreign investors or anybody. Any nation will be happy to have direct foreign investment here.”

Ifaturoti said that conversion to IFRS is necessary because one of the things that will stand in the way of foreign investors is interpretation of financial results, stating “What IFRS does is to put every financial result on the same page anywhere you go in this world. This is a standard, if for any reason you are saying this is this, you will explain and give the reason why it is that.

“So it leaves nothing to imagination. And for us, yes it may be a bitter pill to swallow but it is good. The public will be confident, your shareholders, policyholders are comfortable because they can read and know that it is the truth and the issue of creative accounting is gone for good with that.”

Since IFRS ensures that everything is brought to book, Ifaturoti said “You have to give explanations for the whole load of things and those standards are there to ensure transparency and full disclosure of the issue as they are. So Nigeria has done well to fall in into the list.”

On the extent her company has gone in the conversion to IFRS, Ifaturoti said “For us at CrystaLife, we have finished our conversion; we have started sending our report to NIACOM. Our first quarter report was sent in line with IFRS. So we are at home.

A regulator will not just come out with anything, they have seen that it is the best for the market and those that embrace it will enjoy. All of the things that we are enjoying in Crystalife today are because we have done things well. When they said raise capital, we raised real capital and we are happy for it.

When the capital market came and swallowed people up we still had things to fall back on and by the special grace of God, we are still running our business. We have written off some diminution because of the loss in the market but we are still over and above the minimum capital and we are better and stronger. Everything we say we are is what we are. We are comfortable and confident.”

Ifaturoti however said that there is need for the reviewing of rates in the insurance sector due to the huge claims experience so far, stating: “The only thing we need to do now, from experience is to review the rates that we are charging on some of the policies because the claims have been immense.

“If we do not review and charge according to the risk in Nigeria because everywhere has suddenly gone riskier, the life has suddenly gone riskier, property everything has suddenly become riskier so the rates we charge have got to be reviewed according to our experience on all of the risk that we are writing.”