Potential of Risk-based Supervision will lead to increased investment in insurance industry –AIICO MD
Mr. Edwin Igbiti, Managing Director/Chief Executive Officer, AIICO Insurance Plc
The issue of commencement of full implementation of the Risk-Based Supervision (RBS) model in the Nigeria insurance industry has been one of the most talked about issues in the industry in recently time. In this interview with wwwtherevealerng.com in Lagos, the Managing Director/Chief Executive Officer of AIICO Insurance Plc, Mr. Edwin Igbiti, speaks on the likely impact of RBS on the industry; AIICO’s claims profile in the last five years including other salient industry issues. Below are the excerpts:
In the last five years how much has AIICO paid as claims?
In the last five years, we have witnessed continuous growth in our claims profile. In 2013, total claims were N8.9bn. It grew to N10.5bn in 2014. We paid N13bn, N14.6bn and N21.8bn in 2015, 2016 and 2017 respectively. In total, we have paid about 70bn in the last five years. This is a testament to our relentless commitment to fulfilling our end of the bargain when our customers come calling.
With the commencement of RBS in Jan 2019, what do you foresee as the likely impact?
It is difficult to say. Theory suggests that we should see some consolidation and specialization in the industry. However, the industry is still quite small by most standards and the potential may lead to increased investment coming in. We should see in the coming months.
Sir, despite our high population, insurance penetration in Nigeria and its contribution to GDP is one of the lowest, what do you think is responsible for this?
The Nigerian Insurance Industry, like most other industries, is affected by the macroeconomic environment. The insurance sector, like every other sector of the economy in the year 2017, struggled to overcome the challenges posed by the lingering effects of the economic recession experienced in the previous year which left businesses in stagnated position and eroded the purchasing power of the masses thereby slowing down their urge for the industry patronage. Poor perception of insurance by Nigerians and religious and cultural beliefs are also some of the major challenges being faced by the insurance industry. Nonetheless, numerous untapped opportunities exist. The Nigerian economy is expanding and new risks are evolving, hence a growing need for companies and individuals to insure businesses and protect themselves in the event of unexpected losses. Also, in order to increase confidence in insurance, there has to be proper awareness and education of the populace on the importance and benefits of insurance. Insurers should also ensure that their agents are equipped to market products with an adequate understanding of the products offered and the needs of clients. These would help in driving the penetration of insurance in Nigeria.
How will you rate insurance industry now compared to the period before recapitalization and consolidation of 2007?
It is very different. Regulation has helped tremendously here and NAICOM must be applauded and encouraged. There is certainly more trust in the industry since the recapitalization and this is critical to the growth we have seen since. We are working with the regulator and the umbrella body, NIA, to figure out ways to improve the industry.
AIICO: A Companion for life, please explain.
We do not just regard ourselves as a business; we are positioned to journey through life as a reliable and trustworthy Companion to our highly esteemed customers. Right from childbirth till old age, we are exposed to all kinds of risks through the different phases. AIICO’s bouquets of products are tailored to provide succour by ensuring risks are no issues of concern; which helps them focus on life’s goals and aspirations without fear.
We achieve this brand promise through our culture of quality service delivery, improved technology, better relationship management and prudent risk management.
We exist to create and protect wealth for our customers. We remain committed to this course as a trusted and worthy Companion.
What’s more do we need to know about AIICO Insurance?
AIICO clocks 55 this year. We are thankful for how far we have come. Our success hinges on: Our culture of innovation, professionalism and service excellence; our employees have contributed significantly to ensuring we are a going concern and most importantly, our customers. We have remained in business because of their investment of trust and continuous patronage
AIICO Insurance is one of the largest Life Insurers in Nigeria and a major underwriter for General Insurance business; key players in Oil and Gas. AIICO Travel Insurance Unit is currently the market leader in the industry.
AIICO offers a wide range of products and services in General Insurance for Retail and Institutional customers. Today we are enjoying solid global support which enables us provide sophisticated and high profile options for our clients. AIICO’s stability, strength, security and trust over the years have placed us at a better advantaged position in all classes of Life Assurance.
AIICO Asset Management business is supported by a team of experienced professionals, industry analysts and Risk Management specialists who are focused on creating investment strategies that reduce risk and are responsive to client needs.
AIICO Asset Management is a specialist business structured to provide the most appropriate investment solutions and strategies for clients.
Established in 1963, AIICO Insurance Plc (NSE Ticker: “AIICO”) is an insurance, pensions management, and asset management Group in Nigeria with market-leading positions in its key business lines which include: Life assurance and annuity; General insurance and special risks; Pension management; Health insurance and Asset management.
AIICO commenced operations in Nigeria in 1963 as an Agency office of American Life Insurance Company (“ALICO”) – at the time, a subsidiary of American International Group (“AIG”).
The Company was incorporated, registered and licensed in Nigeria as American Life Insurance Company Limited – as a wholly owned subsidiary of ALICO/AIG – in 1970 – to offer Life and Pension products and insurance services. The Company was renamed American International Insurance Company Limited (“AIICO”) upon the acquisition of a 60% stake by the Federal Government of Nigeria, and later listed on the Nigerian Stock Exchange in 1990, after which both shareholders – the Federal Government of Nigeria and AIG divested.
Following the insurance industry’s consolidation in 2007, the Company acquired NFI Insurance plc and Lamda Insurance Company Limited (both cumulatively accounting for less than 30% of AIICO’s pre-acquisition gross premiums).
The Company subsequently recertified as both a General Insurance and Life Assurance Company – taking advantage of its legacy, brand, franchise and strong retail distribution network to grow a leading General Insurance business.
As an insurance company, AIICO’s goal is to be the insurer of choice and the leading insurance company in Nigeria – providing life insurance and retirement services as well as risk underwriting to a substantial and diversified client base, which includes corporations, financial institutions, governments and individuals in Nigeria.
