Insurance
NAICOM pledges AI integration to revolutionise Nigeria’s Insurance Sector
By Esther Agbo
The National Insurance Commission (NAICOM) has announced its plan to integrate Artificial Intelligence (AI) into Nigeria’s insurance sector.
This initiative supports the Federal Government’s National Artificial Intelligence Strategy, which aims to establish Nigeria as Africa’s leading AI hub.
At the 2024 Nigeria Actuarial Society (NAS) annual industry conference in Abuja, Commissioner for Insurance, Olusegun Ayo Omosehin, emphasised the insurance industry’s critical role in adopting AI.
He stated that NAICOM is committed to ensuring that regulatory policies align with the Federal Government’s AI goals, thereby enhancing the stability of the Nigerian insurance industry.
Mr. Omosehin addressed concerns about AI potentially replacing jobs, emphasising the need for actuaries to continually evolve their skill sets to include AI and machine learning tools. He highlighted the NAS’s role in preparing its members for these technological advancements.
He believes that AI will become essential in data analysis, allowing actuaries to gain deeper insights from large datasets. This will lead to more accurate risk pricing models and innovative insurance products tailored to the Nigerian market.
Furthermore, adoption of AI offers substantial opportunities for the rapidly expanding Insurtech sector and financial inclusion. This includes creating microinsurance solutions for underserved communities and optimising underwriting processes using Insurtech AI.
Shareholders of NEM Insurance Plc have approved a total dividend of N3.01 billion declared by the insurer for the financial year ended Dec. 31, 2023.
The approval was given at the company’s 54th Annual General Meeting (AGM) in Lagos on Tuesday.
In his address, Mr Tope Smart, Chairman of the insurance company, stated that the Board recommended a dividend of 60k per one Naira ordinary share, amounting to N3.01 billion for the year under review.
This dividend is payable to shareholders, subject to the deduction of withholding tax at the appropriate rate.
Smart said that the Group’s Profit Before Tax (PBT) for the 2023 financial year stood at N18.9 billion, indicating an increase of 244 per cent compared to N5.5 billion recorded in 2022.
The parent company’s PBT also rose by 239 per cent to N19.2 billion, compared to N5.5 billion recorded in 2022.
“The position of the group’s financial assets between 2022 and 2023 increased by 160 per cent, while its total assets and total equity improved by 68 and 43 per cent, respectively.
“The group’s Earnings Per Share( EPS) for the year under review was 260k, compared to 108k in the previous year, while the Parent Company’s EPS for the year 2023 was 264k, against 108k posted in the preceding year,” Smart said.
The chairman highlighted that the company paid claims of N15.7 billion in the year under review, up from N12.3 billion in the preceding year, reflecting a 28 per cent increase.
However, the claims ratio, which stood at 30 per cent in 2023, decreased by 25 per cent from 40 per cent recorded in 2022.
He noted that the underwriter’s insurance revenue grew from N31.4 billion in 2022 to N52.1 billion in 2023, showing an increase of 66 per cent.
The firm’s total investment income also rose by 106 per cent in 2023 to N3.3 billion, from N1.6 billion in 2022.
Smart disclosed that the insurer’s management expenses increased from N3.7 billion in 2022 to N5.3 billion in 2023, reflecting a 43 per cent increase, due to the impact of inflation and business growth during the year under review.
As part of its expansion strategy, Smart hinted that the company’s plan to set up a viable life assurance company is in progress.
He appreciated the management and staff of the firm for their continued dedication and hard work in achieving set goals.
He also lauded the commitment and cooperation of the Board and commended the shareholders, brokers, agents, and other clients of the company for consistently adding value to its growth.
In his remarks, Mr Andrew Ikekhua, the Managing Director of NEM Insurance, said that 2023 remained a historical milestone for the insurance company.
Ikekhua stated that NEM not only met its target for the year but also rose to the number one position in the general business insurance market in Nigeria.
He noted that going forward, the underwriter would continue to press home its strategic objectives while leveraging its strengths built on reputation, branch acceptability, and strong financial capacity.
Despite ending the year under review with strong economic headwinds and a persistent increase in inflation, Ikekhua noted that the gross domestic product growth of 3.46 per cent in the fourth quarter of 2023 and the World Bank’s growth rate projection of 3.3 per cent for 2024 indicated a sign of relief for the country.
“We shall exploit to our advantage all opportunities with a positive outlook in the economy and recent regulatory guidelines,” he added.
By Esther Agbo
The Retail Insured Family Association of Nigeria (RIFAN), a prominent consumer association in the insurance sector, has voiced serious concerns regarding the implementation of third-party insurance integration with the Nigerian Insurance Industry Portal (NIIP).
In a recent statement, RIFAN Director-General, Ali Theophilus expressed dismay over what he termed as poor coordination, which he believes could potentially undermine efforts to restore public trust in the insurance industry.
The Director-General of RIFAN, Ali Theophilus, talked about the situation following a stakeholders’ meeting at their Abuja headquarters.
He acknowledged worries that an innovation intended to restore the damaged reputation of the insurance industry could face significant sabotage, particularly from unlicensed insurance agents, if not managed carefully.
He specifically pointed out instances where these agents have allegedly engaged Vehicle Inspection Officers (VIO) in Abuja and its environs, selling unauthorised cooperative insurance policies.
Theophilus urged immediate intervention from relevant authorities to stem this trend before it gains further ground.
While acknowledging the innovation behind the NIIP integration, RIFAN emphasised the necessity for comprehensive training and strict implementation measures to prevent unlicensed agents from infiltrating the market.
He further emphasised the need for immediate action by the NIA to prevent the looming threat, noting that his previous concerns are now becoming reality.
He pointed out that several licensing offices in Abuja and other states are beginning to favour unlicensed insurance agents selling cooperative insurance policies under the misconception of lower costs.
He also urged the NIA to intervene with some of its members and underwriters who, driven by personal gain and unhealthy competition, are undermining the innovation aimed at restoring the industry’s reputation.
In essence, the Association of Registered Insurance Agents (ARIAN) should urgently implement an operation he termed “Operation Show Your License,” emphasising that operating as an insurance agent without a licence is illegal under the insurance act, constituting offences and crimes.
He added that pursuing this initiative diligently could assist NAICOM in reaching its target of 3 million agents by year-end.
He reiterated RIFAN’s readiness to collaborate with NAICOM, NIA, ARIAN, and other stakeholders to monitor agents’ activities in the industry, aiming to restore policyholders’ confidence.
Regarding technology, he mentioned that the RIFAN portal is nearing 95% completion, assuring that it will soon be launched.
This portal will provide a buyer platform for seamless policy purchases with underwriters and NIA oversight, aiming to restore public confidence in insurance.
By Esther Agbo
The Managing Director, REX Insurance Limited, Mrs. Ebele Nwachukwu, announced the company’s intention to collaborate with the Lagos State government on implementing compulsory insurance policies.
This announcement was made during the inauguration of REX Insurance’s new headquarters and the unveiling of its updated corporate identity in Lagos.
“For Rex Insurance, we desire an opportunity to partner with the Lagos State Government to continue to promote the enforcement of compulsory insurance products like the builders’ liability, occupiers liability, professional indemnity, third party motor and group life insurance.
“We look forward to partnering with you to ensure that Lagos State continues to attain great economic growth and stability.
“At Rex Insurance see insurance as a valuable economic tool that is a risk mitigant and promotes economic growth. Insurance encourages economic activity by reducing the financial risks faced by businesses and individuals.
“This can lead to increased investment, entrepreneurship, and consumer spending, which in turn boosts tax revenues for the government. Rex Insurance Limited is here to ensure that Government, Corporate entities and individuals can live life in full,” she stated.
Chairman, REX Insurance, Chioke Ike, explained the rationale behind the new office building, highlighting the company’s forward-thinking vision.
“The decision to move to this state-of-the-art head office was driven by our vision to create a workspace that not only meets the needs of our employees but also symbolises our forward-thinking ethos.
“This new facility is more than just a building; it represents a new era for our company, one where we are better equipped to serve our customers, foster collaboration, and drive innovation. It is a space designed to inspire creativity, enhance productivity, and support our mission to deliver exceptional service.
“Our customers are at the heart of everything we do. This new head office embodies our unwavering dedication to providing the highest level of customer service. With advanced technologies and improved facilities, we are poised to enhance the customer experience significantly.
Every element of this building has been designed with our customers in mind, ensuring that we can respond more swiftly, efficiently, and effectively to their needs.”
Additionally, Ike reiterated REX Insurance’s commitment to timely claims payments and the adoption of technology to bolster its operations.
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