By ROSEMARY ONUOHA
The Director General of the Nigerian Insurers Association, NIA, Mr. Sunday Thomas, has said that the best way for life insurance companies to thrive is to operate on a stand-alone basis rather than being in a composite setup.
According to Thomas, life insurance businesses rarely thrive in a composite company.
Thomas, who stated this in Ogun State, said that he is an advocate of the separation of life insurance business from general insurance business because life business thrive on long term fund which should not be merged with general business fund, which is short term.
According to Thomas, because of the nature of general business which is short term, composite insurers have a tendency to take money from life fund to settle claims emanating from general business which could hamper the performance of the life fund going forward.
Meanwhile, Thomas said that the insurance sector may witness reduced profitability in the next financial year due to the implementation of the ‘no premium, no cover’ policy of the National Insurance Commission, NAICOM.
According to Thomas, the insurance market will be highly liquid and will be a better place to do business.
According to Thomas, the ‘no premium, no cover’ policy is the best thing to have happened in the insurance sector and in the years to come it will become a culture in the Nigerian insurance market and it will enhance service delivery to the insurance public.
Meanwhile, the NIA has said that it is putting modalities in place to ensure a smooth take-off of the marine insurance module of the Nigerian Insurance Industry Database, NIID, by first quarter of 2014.
The marine module of the NIID aims to eliminate fake marine insurance policies that are in circulation in the maritime industry.
It will be recalled that the motor module of the NIID has been in operation for over three years now and it has reduced the volume of fake motor insurance policies in circulation.
Thomas applauded the performance of the motor module since it was introduced into the country, adding that the success achieved so far from the first module has led to the implementation of the second module in marine business.
He noted that the Association is collaborating with security agencies such as the Vehicle Inspection Office, VIO, Federal Road Safety Corps, FRSC and the Police to ensure the successful implementation of the project in all parts of the country.
The Head, NIID, Mrs. Bola Omole while presenting her paper on insurance database said that the database in 2013 has uploaded 1.65 million vehicle insurance policies as against 300,000 it uploaded in December 2011.
She explained that since the deploying of 25 gadgets to Ogun State for verification there has been high patronage of genuine motor insurance policies by the people.
She however identified lack of government buy in, lack of enforcement and low awareness as some of the challenges confronting the performance of the NIID project.
She urged government at all levels to enforce this laws that have been established by an Act, adding that is the duty of the government to enforce laws.
Omole added that lack of adequate awareness about the project has also contributed to the low performance of the NIID, adding that most vehicle owners are not aware of the existence of NIID.