Enforcement of group life will improve insurance penetration

Enforcement of compulsory insurances like group life assurance cover for employees and the mandatory pension for employees will improve insurance penetration in the country Group Managing Director of Mutual Benefits Assurance Plc, Mr. Akin Ogunbiyi expressed this optimism adding that insurers however need to play their role effectively.

He said, “With the inception of national insurance culture by the enactment of Insurance Act no 1 of 2003 and the pension reform Act 2004 and 2014, insurance consciousness and penetration will improve with the enforcement of compulsory insurances like group life assurance cover for employees and the mandatory pension for employees both in the public sector, organised private sector and even the unorganised private sector including the self-employed.

“Much as pension scheme has been removed from the control of the traditional custodian what is left for insurers is to contribute our quota to the successful management of pension scheme by advising on areas of short comings and commending positive steps in the right direction,’ Ogunbiyi said.

He noted that the pension scheme was removed from insurers custody not by the precept of fraud, inefficiency nor inadequacy but because it was never imagined nor ever proposed that the Nigerian insurers could have paid-up share capital of N5 billion nor ever have annual turnover of N25 billion.“Though belated, insurance companies now have paid-up capital in excess of N5 billion, turn over in excess of N25 billion and asset base of over N50 billion.

By continuous constructive engagements, insurer inescapable position shall be surely appreciated,” he said. Ogunbiyi added that insurers’ advertisement through bill boards, radio jingles and television programmes will accelerate insurance acceptance, deepen pension practice and the spread of insurance benefits to all.

The Mutual Benefits boss said that purposes of pension practice is to guarantee a comfortable retirement life after years of active work or professional practice; the assurance that the standard of life previously enjoyed prior to retirement is sustained without any appreciable deterioration; as well as the purpose of ensuring individuals independence from constituting a burden on the state, community or relatives after retirement.

Others are that remuneration package which includes mouthwatering retirement benefits is a veritable instrument to attract and retain quality workforce; could become family income benefits for the dependants of a long serving employee as pension is converted to annuities for life of last survivor; pension scheme is a potent means of aggregating cheap investible fund for the development of industry and revamping economic activities; as well as that pension practice generates peculiar expertise in long term financial management such as actuaries, corporate investors, fund manager, turf auditors and tax experts whose skills are required.