By Babajide Komolafe
FBN Life Assurance Limited, one of the new entrants into the insurance industry has unveiled strategies to deepen insurance penetration in Nigeria.

“Penetration is the challenge of insurance in Nigeria due to the cost of reaching the uninsured but we are going to deploy information technology to reach the uninsured through the branch network of First Bank,”
said Val Ojumah, Managing Director/Chief Executive.

FBN Life Assurance is jointly owned by First Bank of Nigeria PLC, and Sanlam the largest insurance group in South Africa.

Established in 1918, Sanlam has total asset of $45 billion and market capitalisation of $6.7 billion, with presence in six African countries with the exception of Nigeria.

“The decision to establish a life assurance company was taken by First Bank as far as three years ago but the operating license was granted early 2010. From the word go the bank decided to seek alliance with a formidable insurance services provider and that was found in Sanlam, hence the company is jointly owned by the two companies. Sanlam owns 35 per cent of the company and provide technical expertise, and for that purpose the chief operating officer is from the company.

The company, he said is starting business with paid_up capital of N2 billion which would be progressively increased as the business expands.

“Nigeria represents is an enormous market and the insurance penetration are low, not more than 0.5 per cent that is hardly scratching the surface. This represents an attraction for us and then we saw the right partnership in First Bank,” said Andrew Greenwood, Chief Operating Officer, and representative of Sanlam.

He said in addition to penetration, the company acknowledges the challenge of confidence but intend to leverage on the brand name of First Bank and Sanlam to overcome this challenge. He said the company will also operate with a different attitude, which would be to find a reason to pay insurance claims promptly within 48 hours instead of an attitude of finding reasons not to pay claims.”

Ojumah said that while confidence building won’t happen in a day, FBN Life would take part in confidence building measures in the industry.

He said one of that while prompt payment of claims is one of the causes for lack of confidence in the industry; one critical factor responsible for this is the beneficiary of the insured to pay the claims.

“At FBN Life we have devised a means of overcoming this by ensuring that we would not sell any policy without a named beneficiary. By so doing the issue of who to pay the claims when the insured passes away has been settled”.

In addition to this, he said that FBN Life aims to help customers create wealth through its products, stressing that we would ensure that customers get full benefits of insurance as soon as possible.

Responding to the challenge of pricing problem or rate cutting in the industry, he said FBN Life would ensure appropriate pricing of its products, and would rather not write any policy it considers unattractive just for the sake of writing policy. He added that while the company believe in fixing of rate has been done by the Nigeria Insurers Association for the industry, because it has not worked, it would however be transparent in the pricing of its products.