Annuity Contributes About 40 Per Cent Investment to Insurance Sector – NAICOM

0

Get real time updates directly on you device, subscribe now.

The National Insurance Commission (NAICOM) says the annuity market currently contributes about 40 per cent investment to the growth of the insurance sector.

An annuity is a long term investment, issued by an insurance company designed to help protect one from the risk of outliving his/her income; through annutization.

What one contributes is converted into a periodic payment that can last for life.

The Acting Commissioner for Insurance, Mr Sunday Thomas, said this at a retreat for members of the House of Representatives Committee on Insurance and Actuarial Matters in Uyo on Sunday.

He said that the business which was an aspect of life insurance had recorded a significant boost and showed positive growth in trust and confidence to the sector.

“In recent times, an annuity has recorded a significant boost with an increase in its contribution to the sector.

“Before the last four years, annuity business was insignificant as far as the portfolio of the industry was concerned. Thanks to the Pension Reform Act.

“Today, annuity business which is categorised under life business is in the neighbourhood of 35 to 40 per cent contributing to the total portfolio.

“We have over N10 trillion in contributions to pensions. Now, it is expected that part of this will empty itself in the insurance business.

“These are some of the reasons we are pursuing the recapitalisation with vigour because anybody who is going to write the future of somebody else must have what it takes to be able to carry the portfolio.

“The public is becoming more exposed and knowledgeable about the workings of an annuity.

“ For life annuity, once you retire and you make it your choice, it is for life, until death do you part and there is a shift now from programme withdrawal to a life annuity.

“So, we have the responsibility as a regulator to strengthen the life operators so that they will be more alive to their responsibilities,’’ he said.

Mr Darlington Nwokocha, Chairman, House Committee on Insurance and Actuarial Matters, said that the insurance industry was faced with some challenges and irregularities.

Nwokocha, however, called on NAICOM to step up action toward ensuring the insurance of citizens.

“The insecurity situation we have in this country today is hinged to a very great extent on certain things that happens within the insurance industry that is not properly done

“The security personnel, paramilitary, the police and the like, if the personnel is not properly insured and he knows that if anything happens to him, the family will not be protected, he will not put in his best to make sure he will defend the nation.

“If he considers himself effectively insured, that anytime he is either in the war-front or he is carrying out his assignment the way the constitution has provided for him to do, that will motivate him into action.

“That will make him feel that if anything happens in the cause of this his action that his family will not be left in the cold,’’ he said.

Nwokocha said that there was a need to amend the Act governing the insurance industry to meet international standards.

Leave a Reply

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.