Insurance, Pension creating buffer as social shock absorbers – Expert
The Managing Director/Chief Executive Officer of IEI Anchor Pension Managers Limited, Glory Etaduovie, has said Insurance and Pension are two industries that serve as social shock absorbers for losses or economic downturns of any nation.
He described insurance and pension as football players in the defense line and attacking midfield for businesses and individuals and the over economy.
“The philosophy driving them both is the same – Creating buffer as social shock absorbers for losses or economic downturns. They both play roles like football players in the defense lines and attacking midfield for businesses and individuals, and the economy overall,” he posited.
He said any game with a porous defense line can undo all the goals you score without securing your goal advantage.
Mr Etaduovie said these while speaking on the topic: “Repositioning the Nigerian Economy: Insurance and Pension Industry Perspective,” at the fifth BusinessToday anniversary/awards in Lagos recently.
Insurance and pension, he said, have created the confidence to do adventure knowing there is fall-back position in event of any mishap – whether corporate or individual adventure, adding that the confidence of a secure pension will reduce the propensity to be corrupt to prepare for retirement or associated unnecessary anxiety.
On pension, he said it has created enabling environment for a whole lot to happen in the business world from its core objective of social security for the elderly, provision of long term funds for investment in the private sector, to availability of fund to Government for critical infrastructure development, saying the potentials are even larger to diversify fully our economy.
He called for political will to develop policies consistent with long term development plans and consistency towards implementation without political distractions.
Etaduovie called on Nigerian government to Study the dynamically evolved economies like Malaysia, Rwanda and Dubai that now depends less than 5% on its petroleum resources as part of its GDP as well as sensitization of the huge potentials of the Pension funds.
Not to be forgotten, he said is the sanctity of the funds to all intending borrowers.
“The success of the funds will be if used for self funding projects like the Railways and the Nigerian airline project. These two will have direct impact on every Nigerian if they run efficiently. Road maintenance costs and travel comfort will be greatly improved. The fortunes and employments these two create for Dubai and Turkey is massive. These alone, with ancillary services will create 30 to 50 thousand jobs.
“Infrastructures like these will also stimulate economic adventures and growth. Foreign investments will be stimulated as people see business friendly environment. There can be no measuring of all possibilities,” IEI Anchor pension Managers boss added.
On some of the challenges facing the nation’s economy, he said “Part of the greater challenge facing the country, which cascades down to pensions investment challenge, is the absence of a strong sciences and technology background.
“This reduces National initiatives and productivity which should create wider and wider circles of growth, development, financing and dynamics of financing. This must be addressed in both long and short term basis,” he advised.
He called on regulators to encourage creativity and create competitive environment for the funds to thrive as well as allow Pension Fund Administrators to initiate certain products relating to infrastructure and economic development.
“Overtime, it is reasonable to think that the industry regulators will encourage a more creative and competitive environment, as it is already doing with variety of financial instruments.
“PFAs may at some point in time be allowed to initiate certain products relating to infrastructure and economic development, as long as they are bank-able, with entry and exit points and meeting security and regulatory standards,” he stated.
