Immediate past Chairman, Nigerian Insurers Association (NIA) and Managing Director/Chief Executive Officer, Consolidated Hallmark Insurance Plc., Mr. Eddie Efekoha, in an interaction with journalists before his tenure ended, reflected on his scorecard and efforts made to reform the association and the insurance sector in general. Sunday Ojeme reports.
What has been your experience as Chairman, Nigerian Insurers Association (NIA)?
You would recall that in my acceptance speech following my election as 22nd chairman of our noble association, I promised to give further impetus to the development projects initiated by my predecessor, notable amongst, which is the New NIA House Project. I am delighted to inform you that the journey, which we commenced about three years ago, aimed at building a befitting NIA Towers is about to crystalise.
To give it the needed action and importantly bring the project to fruition, council immediately constituted a committee comprising myself, then the Deputy Chairman of the Association, as Chairman, Past Chairman Wole Oshin, Messrs Tope Smart and O. S. Thomas, our DG, as members.
Although the money was not utilised at that time, it became the proverbial mustard seed, as it served to remind the Council that the remodelling and eventual construction of a befitting NIA House was a project whose time had come.
Efforts in this direction gained more traction in 2015 during the tenure of Mr. G.U.S Wiggle when another past chairman, Mr. Wole Oshin introduced the Governing Council meeting. The overwhelming support for the project at that meeting led to the setting up of a Committee comprising Messrs Eddie Efekoha as Chairman, Wole Oshin, Tope Smart, Bode Akinboye, and O. S. Thomas with a mandate to bring the project to fruition.
At the end of the period, it allowed for expression of interest in the design of the project. In November 2015, five reputable architectural firms made presentations to the project Committee, which pruned the number to three after initial assessment.
We are in this new office location of our association because in no distant time the project will commence. I want to commend member- companies for their faith in me and the secretariat, as evidenced by the massive support we have received in the course of soliciting for funds for the project. I also wish to take this opportunity to reassure them that we will work with relevant professionals to deliver the project in record time. We will continue to count on their support.
The NIA Tower, as we have christened it, consists of an office complex on ground and six floors with an elevated car park on the 1st floor. The total floor area of the building is 974.83m2. The features of the building include four office spaces on 2nd to 5th floors with total lettable area of 2,094m2 and multipurpose hall on the 6th floor with a lettable area of 214.74 m2. Other utilities are; elevators, transformer and generators, UPS, CCTV, fire protection and detection services, borehole and water treatment plant, sewage treatment plant, landscaping and green areas.
The expected project duration is 30 months – the design phase is estimated to take six months, while the construction phase is projected to last between 18-24 months and in order to achieve this lofty target, the Committee has selected the cream of professionals in the building industry ably led by the project managers, The Architects’ Collective Ltd.
How was funds raised for the project?
You know to get money from members is not easy. We were fortunate that just at the time we were discussing funding the project was when the issue of tax refund from the government materialised. When we did the 2007 recapitalisation, we were made to pay so much of tax without the opportunity of questioning how the tax liability was arrived at. After the consolidation exercise, members felt that we have been shortchanged; we paid more than we should have paid. We went on to engage a firm of solicitors to help us intercede and intervene with the tax authority. So from 2007, 2008, 2009, up to 2017, before we could get something and that coincided with the building; and what did we do, when we were told that the industry got almost a billion from the refund. At that point the building committee had gotten the council to approve a basis of contribution towards the project. We had arranged to levy ourselves 50 per cent and raise the other 50 per cent otherwise. The other 50 per cent will come by way of loans. On that basis, we allocated to ourselves N500 million, and that now coincided with the tax refund coming. The contributions then became easier because nobody expected that the tax refund would come. That was how successfully we raised the money for the building. Except for some companies that are truly challenged and those who were not part of the refund, other than those ones, the rest of us cooperated. That is how the seed money for the project was raised.
We are almost done but instead of the N1 billion estimated, our bill is actually N1.5 billion. However, that we have N500 million to start, I think we have crossed the important phase. We could have developed a space to meet our need alone, which means we didn’t need to spend that much but we felt that the land we are talking about is a prime property. So we needed to do something that is truly befitting. So we looked at our needs and investment needs. So the project is to provide secretariat and income. In that respect, we looked at the number of floors. We will only occupy one floor and let out three floors, and the income from the three floors will pay any loan we take within a short time. We have done those computations. We are sure that in the next few months, under the leadership that will come, the borrowing end of this project would be tidied up.
It could come from member companies, because members are the ones funding most of the banks. We have several deposits with the banks with very low interest rates. Based on investment law, not more than 20 per cent of your investible fund must be with a bank, meaning that all of us are dealing with minimum of five banks. You find out that some people have over a billion, and what is the interest rate, not more than eight or 10 per cent. In some places, may be you might get 12 or thereabout. So the association is ready to pay that much, and bearing in mind that this is an association that thrives on subscription from members. The subscription alone from members is big enough to pay any loan. So, our spending basis is quite in place.
What is your current position with FIRS on tax?
We are delighted to report that through our strategic engagement initiatives and with the understanding reached, members are now relieved from the heavy tax burden imposed on our member-insurance companies by the law. We appreciate the management of FIRS particularly its Chairman, Mr Tunde Fowler, for giving us the opportunity to make our presentation and canvass our position on the law. We assure them of our continued support in the process of amending the law to bring it in line with global best practice.
Following widespread complaints from operators that they are being over-taxed after the recapitalisation exercise initiated by the National Insurance Commission (NAICOM) in 2007, the industry body made spirited representations to the appropriate authorities in the country for a refund. Due to these efforts, some member companies have duly received a tax refund of almost N1 billion. The refund, notwithstanding, the association is still engaging the FIRS and the Federal Ministry of Finance to effectively redress the tax burden on the insurance industry to ensure sustainable growth of the sector.
Tax has been an issue in our industry but we continue to engage the FIRS and the Federal Ministry of Finance to work out an amicable solution to spur robust growth of our industry.
What has the association done on capacity building?
Our association continues to be in the forefront of capacity development for employees of member companies. In the area of actuarial capacity building, we played host to a team from the Institute and Faculty of Actuaries, UK (IFoA), led by its President, Ms. Majorie Ngwenya, where the issue of dearth of actuaries in the market was extensively discussed. The IFoA team has assured the market of its continued support in that regard through regular training programmes and other collaborative initiatives.
Also worthy of mention is the collaboration between the association, College of Insurance and International Labour Organisation (ILO) to train insurance professionals in the area of micro insurance, market research and product development. We are optimistic that these initiatives will translate to better underwriting practices and improved bottom line for our members.
What is the association’s position on NAICOM’s Compulsory Insurance rates?
Another issue worth mentioning here is the rates on compulsory insurance. We are grateful to NAICOM for coming up with the rates as a way of entrenching better market discipline especially in the area of motor insurances and life underwriting. We are optimistic that the positive effect of the new guidelines will begin to manifest in the accounts of member companies before year end.
Also worthy of mention is the smooth relationship between the association and NAICOM under the leadership of Alhaji Mohammed Kari. I would use this opportunity to thank him and also endeavor to pay a visit to him. We engage with NAICOM a lot in several ways, either from the corporate governance end or from the market development end or from the policyholder protection end. In several ways we have engaged. It is not all that we come to discuss in the open. It is usual with our industry not to have our discussions in the open. So we engage and when the result comes out, everybody will see it. It is wise to keep them in a close manner until results are achieved.
What is the your relationship with lawmakers and the government?
Another principal stakeholder is the National Assembly. They are the ones formulating laws. In the last few years, we have had couple of bills proposed by some people who hardly know the principles of insurance and how insurance business is conducted. We have to teach and straighten them to make them know how we feel about most of those bills. We have not been able to retrieve some of the ones we lost but at least our market share and products have not been taken away from us through some of these engagements.
Another principal stakeholder is the government, represented by the Ministry of Finance. One of those major issues will continue to be our tax. Like I said earlier, tax has been an issue and we are making efforts to getting it resolved. There are some executive bills. The details are being worked at. From the feelers we have from KPMG, some bit of the bills will address the tax issue as far as the insurance industry is concerned. So, we will wait for the detailed unveilings.
What are your projections for the industry?
The association, working with KPMG, developed a 10-year transformation roadmap for the industry. This roadmap together with similar works by other arms of industry is undergoing harmonisation under the auspices of the Insurers’ Committee. I strongly believe that the implementation of this plan when concluded soon would bring about the much-awaited growth to our industry.
What was supposed to be an NIA document, the regulator got interested and added some touch to it, which is very good. We expect the Insurers’ Committee to be through with the harmonized goals very soon. We have a clear plan. The regulator has asked us to come up with individual growth. We can do things individually and determine what the growth would be.
There are a lot we can do for ourselves to the extent that if you don’t belong to the association, you will see yourself losing out.
One of the things that came out of that document is this rebranding effort. Fortunately, the Insurers’ Committee picked it up, and today you know better. That programme has kicked off, and I can tell you, members of this association are fully committed to it. They made their contributions, and that is why the programme has kicked off. We believe that on a broad basis we will be able to promote this industry but individuals will do their own little bit to promote their companies; but this rebranding is the general one. It is not going to talk about company A or company B. It is going to talk about insurance and insurance industry values that you can get from it. I think that is the way it is going to go.
The association is also forging ahead with the implementation of the Unstructured Supplementary Service Data (USSD) code. Discussions between the Association and Nigerian Interbank Settlement System (NIBSS) for deployment of the USSD have progressed significantly and an inter-agency publicity committee has been put together between NIA and NIBSS with a view to publicising the project to engender public support and acceptability.
When fully operational, the USSD code is expected to close the gap encountered in the operation of the NIID, as the code will not require Internet connectivity for verification of motor insurance certificates across the country.
How the issue of fraudulent claims been tackled?
We are witnessing more market cohesion and improved intercompany relationship. Companies now share information on new businesses and claims. This has resulted in the discovery of fraudulent claims in the market especially in the area of motor insurance. The association appreciates members for this improved relationship and urges greater collaboration in the market.
Politics24 hours ago
‘Saraki boys’ in showdown over Kwara PDP guber ticket
News23 hours ago
Tinubu, Saraki, others in test of might
News19 hours ago
LIVE UPDATES from the Osun governorship election
Politics24 hours ago
Buhari has restored Nigeria’s dignity –Umohinyang
News23 hours ago
Osun guber: The five-horse race
News23 hours ago
Court to EFCC: You can’t compel Kalu to embrace your choice of defence
News23 hours ago
CBN revokes Skye Bank’s licence as Polaris Bank takes over
News23 hours ago
NYSC saga: Sack, arrest Shittu, PDP tells Buhari, police