Matthew Otoijagha
The nation’s underwriters are optimistic that the industry would make more premium income from Group Life Insurance business in Year 2020, as opposed to previous years.
The new rating on group life cover announced by the National Insurance Commission (NAICOM), last year, according to operators, would yield better dividends in the current year, as most of the Group Life businesses were renewed last year before enforcement of the group life cover was announced.
Speaking on behalf of insurance operators at a media interactive session in Lagos, the Chairman of Nigerian Insurers Association (NIA), Tope Smart, said the circular from NAICOM, mandating insurance operators to charge six to eight per cent per mile, which was 300 per cent higher than market rate on group life, would triple premium income of life underwriters in 2019.
“As at the time the circular was issued last year, most of the group life businesses had been renewed in January. So, it didn’t have much impact. But in the current year, businesses are going to be renewed in the mandated rate, which will translate to more premium income from group life for the industry,” he said.
He believes operators can improve the profit margin of the insurance industry if they can charge the right rate on policies.
The Managing Director/Chief Executive Officer of Cornerstone Insurance Plc, Ganiyu Musa, had, at a different function, applauded the regulatory intervention on a group life policy, saying this is one of the best initiatives to have come from the industry regulator.
He added that this singular act will shoot up the bottom line of the underwriting firm and expectedly, insurance industry, hoping that this positive impact would continue in 2020.
“The industry is going to benefit a lot in terms of improved premium growth if the right premium is charged on the cover.
“Price rate competition is a major challenge in the insurance industry, and that is why I applaud the enforcement of ratings on group life and the third party and that, to a large effect, will increase the profit of insurance,” he said.