FG urged to set the pace for No Premium No Cover

Group Managing Director of Standard Alliance Insurance Plc, Mr. Bode Akinboye has enjoined the federal government to set the pace in implementation for  the no premium no cover policy by paying premium for its insurances.

Akinboye who sated this in a chat with journalists said if government does this, individuals who buy insurance will follow suit in obeying this particular law and insurance industry would be better for it.

According to him, if the federal government can pay premium as at when due, it will be easier to also help in enforcing the policy.

Speaking in the fate of the no premium no cover policy in the face of the present regime, Akinboye stated, “so we expect that under this new change era, government should be good example to the corporate world as well as to individuals.

Government should lead, then others will follow. So if the government knows that all its assets and property needed to be insured, and money is budgeted, they should release the budgeted fund. By such action, government will be in a position to enforce its own policy. If government is not doing that how can they enforce the law on big multinationals for example with huge financial muscles?”

According to Akinboye, the positive impact of the ‘no premium, no cover’ policy on the insurance industry is real.

He added: “This being that now you can confidently say that any business any company writes is represented by cash unlike what we used to have before where you write business and more than 50 per cent is in receivables and so you have a humongous receivable account and a big credit control team chasing money everywhere.”

Akinboye added that in the past, insurers were not focusing on their businesses but on debt collection with all the attendant effect of poor service delivery.

“So now that has stopped. It means money in hand is available for insurers to invest and to render quality service. so I envisaged that if this is sustained, insurance companies and the industry becomes stronger, not only by servicing customers but by creating investable funds that will be used to help drive down unemployment,” he said.

According to Akinboye although the industry premium income nosedived when the policy first came on stream, the situation is changing now.

“It is always like that when a change is introduced. Although the industry premium income nosedived initially, I think it has settled. It was the first reaction, now the premium is beginning to go up because everybody now knows that this is real, it is not a joke.

Only recently, the Commissioner for Insurance, Mr. Mohammed Kari had said that the federal government of Nigeria only spent about N2 billion on insurance out of N20 billion budgeted in 2014.

Kari stated that the implication of the  federal government’s action was that only about 10 per cent of the budgeted amount for insurance was used, thereby exposing most federal government’s asset, workforce and operations to uncertainty.

Kari stressed that the insurance industry will no longer sit on the sidelines and allow opportunities to pass by.

The Commissioner therefore charged insurance professionals to correct themselves than be corrected by external forces.

Kari said: “The challenges of huge competence deficit, corruption, low level of innovation, over-dependence on the oil sector leaves all asunder to phantom the best soluble buyouts and how to harness the opportunities inherent therein.

Continuing he said, “in consequence of the effect of uncontrollable changes in the macroeconomic environments affecting our businesses, organisations and entities either passively or negatively, we are therefore implored to map-out adaptive strategies and identify the opportunities inherent in the ‘change’. As far as innovation is concerned, we need to improve the content and quality of our services. In addition to our quest for innovation, changes in companies’ business model must be exploited. The earlier we realised that the music has changed and thus the need to adjust our dancing steps, the better for us all.

“We have seen unbridled, unsustainable and technical unsound rates being offered by supposedly insurance professionals more out of the need to meet a target than to properly underwrite. Professional brokers’ takes business from contraptions called ‘sub-agents’ who by the way are not registered by anyone. Premiums are loaded, discounted, retained or returned with impunity market indiscipline among practitioners, boards and management conflicts may degenerate to threatening the stability of some of our companies. The implication of such practices on the insurance industry in this new Nigerian business environment is the gradual diminution of our professional relevance as a veritable shield for the financial sector of the economy. We must all have zero tolerance for these unethical vices.
Most of the actions of our professionals today are actually criminal,” Kari said.

Source : Thisday