STAKEHOLDERS' WORKSHOP ON MICRO-INSURANCE

In its continuing efforts at deepening the Nigerian Insurance market, the National Insurance Commission (NAICOM), in partnership with Access to Insurance Initiative (aii), GIZ of Germany and Making Finance Work for Africa (MFW4A) will hold a one-day stakeholders' workshop on micro-insurance on Wednesday, October 24, 2012.

The venue for the workshop is Reiz Continental Hotel, Plot 779, Cadastral Zone, Central Area, Abuja at 9:00am prompt.

Stakeholders expected at the workshop include Cooperative Societies; Micro-finance Banks; Insurance Companies; Insurance Brokerage Firms and Trade Associations. Also invited to be part of the workshop are other Regulatory Agencies (CBN, PENCOM, NDIC, SEC & FSS2020), Government Agencies (SMEDAN, FMBN, NHIS, PHCN & NACRDB) and International Agencies (IMF, WORLD BANK< UNDP< BFID AND UNDF).

It would be recalled that by the middle of last year, NAICOM commissioned the GIZ/MFW4A to conduct a nation-wide diagnostic study on the potentials of micro-insurance in Nigeria. This study was successfully conducted this year and the reports have been submitted to the Commission. It is important to note that in the process of carrying out the study, the research team held discussions with the Commission, Cooperatives Societies, Trade Associations, Micro-finance Banks, Insurance Companies, Brokerage firms, as well as representatives of other regulatory and government agencies.
The primary aim of this workshop therefore, is to assess the findings and recommendations of the country-wide diagnostic research on micro-insurance and to provide a platform for further in-depth discussions. In addition, this workshop also aims at creating an avenue for dialogue amongst the various stakeholders.

culled from www.naicom.gov.ng

INSURANCE INSIGHT: TELEMATICS

Telematics provides the ability to move away from traditional segment-orientated models towards one based on individual driver behaviour, allowing a far more accurate calculation of risk. This two page article assesses the business challenges, strategic solutions and benefits of Telematics usage.

Given the dramatic changes of recent years, those in the general insurance industry are well aware that ‘change is the only constant’.

The internet has provided the basis for the disintermediation of the personal lines market and the ‘rise of the aggregators’. Consumers now seek advice from their social networks rather than brokers and, as channels have proliferated, they now expect communications that suit their lifestyle and needs.

This new reality means insurers need to change their business and marketing strategies to emphasise retention and the development of lifetime values as essential components in building a profitable, sustainable business.

And no longer can customers be viewed just as ‘policy-holders’. They need to be treated as individuals and family members with a range of needs that may well go far beyond a simple policy.

Telematics provides the basis for a paradigm shift for motor insurance. Not only does it offer the ability to move away from traditional segment-orientated models towards one based on individual driver behaviour, but by developing a comprehensive picture of how, where and when a vehicle is driven, a far more accurate calculation of risk can be achieved.

With this insight, insurers can tailor products at an individual level, leading to a better customer experience, improved satisfaction and significantly enhanced retention rates.

Business Challenges

Telematics is not new, but changes in technology and market conditions mean it is now moving rapidly from specialist to mainstream markets.

Infrastructure costs have decreased dramatically. Young male drivers face increasingly exorbitant premiums. The loss of the exemption from the EU Gender Directive is fuelling interest from both politicians and pressure groups alike. And at the same time, motor insurers have struggled to make profits as the costs of claims has soared, in part due to the rise of the ‘whiplash’ compensation culture and the payment of referral fees.

All these are combining to position telematics as a powerful solution to many complex challenges in motor insurance.

It offers the potential to set premiums that reflect genuine risk, calculated using real data and founded on a solid, evidential basis, at an individual level.

And with that insight comes the ability to develop new products that can capitalise on potentially lucrative market segments as well as the tools to build and use customer profiles that can radically change the way that insurers acquire, retain and develop customers.

Strategic Solutions

In itself, telematics starts as a data stream, derived from the vehicle and from the GPS network as location co-ordinates. To make sense, this data has to be placed into a geographic context.

The application of ‘location Intelligence’ does this and allows an insurer to visualise and understand driver behaviour. Identifying the type and class of road, the speed limit and the vehicle’s proximity to accident blackspots are just some of the factors that can be used to assess driver behaviour. Similarly, proximity to high crime zones may also factor in determining risk and premium.

To take full advantage of telematics, insurers need to apply high quality location data together with the right systems and processes to efficiently manage, use and analyse large amounts of data. Choosing the right platform to assemble, interpret and analyse the data is key to developing an effective operation.

From a strategic viewpoint, telematics offers a great deal of promise. Not only can it feed information on where and how a vehicle is being driven, it can also provide immediate notification of accident or theft. And by providing a wealth of data for both conditions, it provides a powerful tool to combat fraud.

But perhaps the real potential of telematics is its ability to build ‘clubcard-like’ levels of customer insight. By combining telematics with other datasets, insurers can build comprehensive lifestyle and behavioural profiles that open the door to customer ‘value-add’ via the sale of ancillary and location-based services.

Business Benefits

Motor insurers still struggle to understand and connect positively with their customers; in many cases engagement being limited to on-boarding and renewals processes, despatch of policy documents and, for some, claims processing. As a result of this and other market forces, loyalty is low and consumers tend to be driven by price, although brand and trust still play important roles.

Although new products, such as multi-car policies, have recently been brought to market, consumers still see insurance as traditional and conservative in nature.

Telematics offers the opportunity to build detailed customer profiles, develop and bring new products to market, provide added value services and build greater lifetime customer value.

Already a compelling proposition for a number of niche groups, telematics is close to the tipping point where mainstream insurers will need to build and offer a telematics proposition, or risk being left behind.

Those who lead the way may well be able to significantly grow market share while setting premiums that accurately reflect the real risk and result in a profitable and sustainable business.

Life Premiums See Hike of 58%

Life premiums for the whole of life insurance have seen a rise of 58% overnight for women over 40, according to comparison site payingtoomuch.com.

 

Some women aged 40 have seen rises from £48.30 to £76.40. The equivalent increase for a male in the same age band is 40 per cent.

 This increase comes from PruProtect, the largest provider of underwritten whole of life insurance in the UK.

Michael Ward, managing director of payingtoomuch.com said: "Virtually all customers under age 50 are likely to have a premium increase, the younger the more the increase."

 The rise in premium rates is a direct result of the EU Gender Directive due for implementation by 21 December 2012 which demands that insurance premiums cannot be calculated differently based on the sex of the applicant, broadly speaking women have paid less than men because they are likely to live longer.

Ward added: "Existing customers aged over 55 might be able to make a saving by re-quoting on the new gender neutral terms. Having analysed what PruProtect have done, we wonder if this is what the whole market might do before 21 December so those who want to beat such an enormous hike with other providers must act now."

The importance of technology to the insurance sector

The rate of technological change in recent years, and particularly with respect to ICT, has been remarkable. Never before has so much information been available to so many people around the world. In this thinkpiece, the Universities and Science Minister, David Willetts MP, discusses the many links between insurance and information technology in the UK. In his view, the UK’s comparative advantage is intrinsically linked to industries like financial services building increasingly strong ties with research and development centres and universities which are at the frontiers of developing new technology.

Below is the summary of latest findings:

• There are many links between the insurance industry and investment in technology and research and development in the UK. This thinkpiece investigates some of them. 
• Science and technology is for example, enhancing the ability of insurance to underwrite diverse risks like climate change, drug trafficking and piracy by providing new and more accurate data streams from which to judge the relative likelihood and impact of various hazards occurring. 
• Computational modelling is also changing the way in which insurance brokers operate, with the potential to deliver a “modern version of the classic broker function”. 
• The UK’s current and future comparative advantage lies in the skill to programme computers to maximise their capabilities, and to employ those capabilities to great effect in business.
• For this to occur, government, industry and the scientific community must work together to ensure that technological developments are fully utilised across the industry and for the benefit of society.

Kindly visit http://www.cii.co.uk/media/3691513/future_risk_report_no_4.pdf  for detailed report.

MORE WOMEN THAN MEN WILL CARRY ON WORKING PAST THE STATE RETIREMENT AGE age

More women than men will carry on working past the state retirement age, according to a new report by insurers LV=.

The number of over-50s expecting to work past the state retirement age has risen to 6.5m, an increase of 43% on the 4.5m people planning to do so in 2010.

This group says they expect to work an extra 6.2 years on average.

However, more women say they will work past the State retirement than their male counterparts.

4.1m women over 50 expecting to work past the state retirement age, compared to 2.4 million men.

But men who expect to work past retirement will do so for over a year longer than their female counterparts.

Both male and female workers say that they will continue to work because of affordability, with some mentioning enjoyment of work as the next reason.

Ray Chinn, LV= head of pensions, said: "With the Government increasing the state pension age we would hope that those approaching retirement wouldn't feel they need to work beyond it.

"Unfortunately, this is not the case as many find that they have insufficient funds in their pension pots.

"Although there are many people who feel too young to retire and want to work for as long as they can, our research shows the majority say they will be forced to do so to survive financially."

London has the highest number of over-50s who say they will carry on working, and many predict they will work 7.4 years past the state retirement age.

Chinn continued: "Regardless of how close people are to retirement, it is essential that saving remains a priority. The earlier in life you can start saving the better, but it's never too late to make a significant difference to your pension pot.

"There are many different options available to people at or near retirement, from which type of pension they have their money invested in, to whether they take a lifetime annuity, enhanced annuity, or put their money into drawdown.

"If someone qualifies for an enhanced annuity they can see their income in retirement rise by up to 30% for instance.

"People should seek professional advice to make sure they are getting the most out of the money they have saved for retirement."

Research Shows that the More You Sit, the Less You'll Live

The dangers of “over-sitting”–spending hours a day in your office chair or comfy chair/sofa at home–are being born out by a growing list of research studies, all of which paint a bleak picture.

This month another study published in the October issue of The British Journal of Sports Medicine adds to the macabre chorus. Researchers used data from the Australian Diabetes, Obesity and Lifestyle Study, a large, continuing survey of the health habits of roughly 12,000 Australian adults. The survey asked participants questions about overall health, existing illness, exercise, smoking, and diet, as well as how many hours per day in the previous week they had spent sitting in front of the television. (The issue here is not simply watching TV, of course, but sitting while watching.)

According to the survey data, in 2008, the year that the researchers chose as their benchmark, Australian adults collectively viewed 9.8 billion hours of television. Using actuarial tables and adjusting for smoking, waist circumference, diet, exercise and other variables, the research isolated how much time all of the TV watching was chipping off study participants’ lifespans.

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The result: every hour of television watched after the age of 25 reduces the viewer’s life expectancy by 21.8 minutes. Viewed more comprehensively, the study suggests that an adult who spends an average of six hours a day watching TV over the course of a lifetime can expect to live 4.8 years fewer than a person who doesn’t routinely plant themselves in front of the telly.

The especially troubling finding of this and similar studies is that the result doesn’t seem to be improved by regular exercise. If you sit for hours a day, and exercise an hour a day, you are still at risk.

Authors of another recent study in the journal Diabetologia, which reviewed data from 18 studies involving 794,577 people, conclude that the average adult spends 50 to 70 percent of their time sitting. This study covered not only leisure time watching TV, but also time spent sitting at work.

The researchers then cross-referenced sitting time with a variety of health problems, and found that those who sat the most had a 112 percent increase in their relative risk of developing diabetes; a 147 percent increase in their risk for cardiovascular disease; and a 49 percent greater risk of dying prematurely. Each of these results hold true even if the sitters regularly exercised. [Source: New York Times, October 17, 2012]

None of these results should be interpreted to mean that exercise isn’t important — it’s extremely important for overall health. But, exercise alone is not enough to counter-balance the damage done by sitting for the majority of our waking hours.

How much sitting is too much? According to the authors of the Australian study, sitting four or more hours a day puts you in the “risky” category. That’s hard news for most of us who spend much more than that at office jobs, to say nothing of leisure time.

FAQs about the Actuarial Profession

Are you a recent graduate of actuarial science, mathematics, statistics or any other strong numerate course? Are you also interested in pursuing a career in actuarial field?

Below are frequently asked questions on the actuarial profession as compiled by the Institute and Faculty of Actuaries, UK (under "The Actuarial Profession"). Enjoy it.

Where can I get work experience?

Work experience can prove to be a real asset when job hunting and indeed is now often used as part of the recruitment process. However, work experience can be really hard to find as places are limited and you need to apply early. Companies which offer work experience placements are listed on the Actuarial Profession’s website and via our work experience section.
Sign up to the Inside Careers emails to receive information about these opportunities.

Where can I get sponsorship for studying?

Employers will usually sponsor you through the whole of your qualification route, however, The Worshipful Company of Actuaries do offer funding through a charitable trust. Also, the Staple Inn Actuarial Society (SIAS) offers funding at university level.

What recommendations do you give mature entrants?

There is no age limit for joining the profession, but securing employment and sponsorship for the professional examinations may prove difficult for mature entrants as they will be competing against recent graduates. We recommend that you study for one or two examinations independently in order to improve you chances of employment and to show that you are committed.

What is the different between working for a consultancy and an insurance company?

Although there are many opportunities available for actuaries, generally actuarial trainees start working for either an insurance company office or a consultancy firm. These opportunities offer different lifestyles and challenges.
Working in an insurance company environment means that there is usually only one client; your employer. A variety of work is available, but tends to come more slowly – often you’ll be asked to work in one area for a period of about one year before moving on to the next challenge, taking the experience you have gained with you.
The day to day work within consultancy firms tends to be more varied, as in any year you are likely to work for a number of different clients (and partners) solving different types of problems. This can become particularly challenging if you have a number of projects running in parallel and you need to ensure that you meet and manage each of your clients’ expectations and deadlines. Some consultancy projects can involve working at the client’s premises, which may not be in the same town as your own office. This can give you an excellent opportunity to work with other people and see the running of an organisation other than your own consultancy.
However, you would need to consider the impact of being away from home. You may also find yourself working on just part of a project rather than seeing it all the way through from start to finish.

How many years does it take to qualify?

In order to become a Fellow of the Profession, students must pass examinations, demonstrate satisfactory completion of modules and acquire a satisfactory level of work-based skills. Average qualification time is currently three to six years.

What exemptions from the professional examinations will I obtain?

This will depend on the scope and standard of the subjects covered by the university examinations you have taken and on the performance you have achieved.
It is possible to gain exemptions from all eight of the core technical subjects on some undergraduate and postgraduate degrees. Some postgraduate degrees offer the opportunity for exemptions from core applications and specialist technical subjects.
Details of the universities and courses we have agreements with are available on the Actuarial Profession website, along with information on how to apply. If you have taken a different university course, you may still be eligible for exemption from some of our exams, but will need to apply to us for confirmation. You must be a member of the Profession before you can gain any of the exemptions.

Where are actuaries based in the UK?

Actuaries work in cities throughout the UK and not just London. Full listings of actuarial employers by location are indicated in the List of Actuarial Employers found at The Actuarial Profession and our Employer Directory.

How do I obtain a work permit to work in the UK?

Work permits are issued by the Borders and Immigration Agency, which are part of the Home Office. Work permit applications can only be made by employers based in the UK who wish to employ people from outside the European economic area. Individuals are not allowed to make applications on their own behalf. To find out more information about the UK Border Agency visit their website.

Do I have to work as an actuary to qualify?

Yes – as well as passing the examinations, Fellowship requires the satisfactory completion of a work-based learning log.

Will I need to continue training once I have qualified?

Members are required to maintain their competence once qualified through continuing professional development. This is mandatory for regulated roles.

I sincerely hope the above will answer some of the questions bothering you especially those wishing to stage a come-back to the actuarial field. In case you still have unanswered questions, feel free to contact me either directly on this blog or via zilmerkarup@gmail.com .

Airmic guide: Disclosure of Material Fact

Dear All,

I feel it is important to share with you on the duty of disclosure when buying an insurance policy. I will also restate some of the points of law regarding disclosure of material fact in insurance.

A fact is material if it will influence a prudent (reasonable) underwriter in deciding whether to accept a business and in what terms. In some instances, the insurer would be able to repudiate liability due to non-disclosure by the insured or avoid the contrac altogether.

Why does the law impose the duty of disclosure in insurance contracts but not in other types of contracts? (I want to believe you still remember). Well, a quick answer to that is while the subject matter of other contracts can be seen & inspected by all parties, the subject matter of insurance is best known by the proposer and should therefore demonstrate uthmost good faith (uberrima fides) in dealing with the insurer. Other contracts (including insurance) can be affected by misrepresentation but only insurance is subject to disclosure requirement.

while other contracts are governed by the legal maxim 'caveat emptor', insurance is based on 'uberrimae fides'.

Below is the full guide.
http://www.insurancehound.co.uk/download/airmic-guide-disclosure-material-information-business-insurance-14585?EDID=QNJ3251-V14HW-KQ9Y8O-ED1ZB-2CH91-v1

NAICOM SUSPENDS TWO INSURANCE COMPANIES & A BROKING FIRM

NAICOM, according to the release signed by Deputy Commissioner (Tecnical), Ibrahim Hassan on August 7, 2012, has suspended Alliance & General Insurance Company Ltd, A&G Life Insurance Plc and Fidelity Bond Insurance Brokers from transacting further insurance business for a period of six (6) months with effect from August 6, 2012.

the reasons given includes:

• failure to comply with relevant provisions of the National Insurance Commission Act 1997 and Insurance Act 2003;
• non-rendition of accounts;
• misrepresentation and non-disclosure of liabilities;
• non-remittance of premiums and commissions, and
• corporate governance abuses.

The Commission also states that the suspension order may further be extended at the end of six (6) months until it is satisfied with the conduct of the companies.

It may interest you to know that the three companies have common ownership.

Please visit http://www.naicom.gov.ng/News.php?new=264 details.

Dana Crash Increases Insurance Premium for Airlines, Articles | THISDAY LIVE

Dana Crash Increases Insurance Premium for Airlines, Articles | THISDAY LIVE

Enterprise Risk Management (ERM) Healthcheck, Free Zurich Financial Services Ltd. Tool

Enterprise Risk Management (ERM) Healthcheck, Free Zurich Financial Services Ltd. Tool

Disconnected Customer Channels: Research Reports

Pitney Bowes Software has undertaken a major piece of research into the current state of customer communications channels. Research consultancy Opinion Matters conducted a survey of 250 CMOs and Marketing Directors in B2C companies with 1000+ employees across the UK, France and Germany; within Financial Services, Telecoms and Utilities. The aim of the survey was to discover how well integrated marketing strategies and market channels are and how relevant and consistent customer communications are across these channels.


Technology has provided a dizzying array of new communication channels that mean that we can receive information continually - "Always On Marketing". This increase in channels is no less pronounced in the corporate world where the research tells us almost all the organisations we surveyed are engaging to some extent with social networks to reach consumers, where more are starting to use Facebook, Twitter or LinkedIn for marketing in conjunction with traditional channels.


With this ever growing number of channels being used, the survey overwhelmingly shows that the corporate preference is to have these channels integrated. However, it also shows that while this is an active goal the majority are still some way short of reaching integration. Barriers to achieving this include a lack of strategy, concern over channel security, inability to be consistent across channels and fear of confusing customers.


As a result customers are being lost though fragmented and inconsistent communications. For example, during on-boarding large numbers of customers are lost for many and varied reasons including fragmented ownership, no pertinent follow-up, and perceived lack of customer understanding.


The survey also looked at the sorts of practices that will drive greater customer engagement. For example the survey found that only a small minority of call centres are using predictive analytics and on screen prompts when talking to their customers, therefore missing the opportunity to engage more relevantly. Furthermore less than a quarter of organisations use location intelligent systems to provide specific location-based offers and services to their customers. Operationally the majority of organisations do not use sophisticated segmentation techniques, such as randomised control groups, to measure campaign effectiveness.


In this information age customers expect to be understood by their suppliers. They have preferences not only in what they want but in how and when they wish to engage. In order to achieve this, companies must ensure co-ordinated and integrated communications to place themselves in a position of advantage in terms of driving customer satisfaction, loyalty and therefore revenue. The research, however, suggests that for the majority of companies this standard of engagement is still some way off.

Get the report here http://www.insurancehound.co.uk/abstract/disconnected-customer-channels-research-report-13663?EDID=KQY98VR-C5XZV-30C8E9-Q3PJH-FDL5H-v1

Private motor insurance: Report on the market study and proposed decision to make a market investigation reference - May 2012

This market study launched following a call for evidence on the UK private motor insurance market. The information gathered gave the OFT reasonable grounds for suspecting that there are features of the UK market for private motor insurance that are preventing, restricting or distorting competition.

You can get the report here http://www.insurancehound.co.uk/abstract/private-motor-insurance-report-market-study-proposed-decision-market-investigation-reference-2012-13633?EDID=KQY98VR-C5XZV-30C8E9-Q3PJH-4VQ8E-v1

Insurers ‘less exposed than banks to Greek euro exit’

Insurance companies are less exposed than banks to the contagion risk that would be triggered by a Greek exit from the eurozone, Fitch Ratings said today.
http://www.theactuary.com/news/2012/06/insurers-less-exposed-than-banks-to-greek-euro-exit/

Work-related cancer linked to 8,000 deaths a year

Around 8,000 British cancer deaths a year are thought to be work-related, in particular where asbestos, diesel engine fumes or night-shift work are involved, a study has found.
http://www.theactuary.com/news/2012/06/work-related-cancer-linked-to-8000-deaths-a-year/

Introduction to Grouplife Insurance

Grouplife Insurance Cover

Grouplife insurance is a policy bought by an employer on behalf of its employees. The aim is to provide death benefit for the dependants of a deceased employee before retirement.

Most employees are bread winners of their families and their untimely death will leave a vacuum in the finances of the family. The children might still be in school, there may be loans or mortgages running and so on. The ideal therefore is to minimise the financial burden the dependants will go through in time of death of a beloved.

Africans also believe in giving a befitting burial for the departed one and the cost of this could be enormous. It may not be a good idea imposing more financial constraints on the bereaved family.

Every employer therefore tries to provide its employees with a death-in-service benefit to encourage them more to work and to allay the above stated fears. The death-in-service benefit will usually apply in addition to other benefits that are related to age or length of service.

The amount of the benefit will usually be a multiple (typically 3 of 5 times) of the annual salary but will not depend on the age, sex, length of service or any other factor.

Why Grouplife Insurance?

Most countries make it mandatory for an employer of labour to have such benefits in place for its employees. There is however the need to ensure that funds will be available to pay such benefits whenever they arise (i.e. upon death of an employee). There have been cases where the employer was not able to pay such death benefit.

The solution appears in transferring the risk of payment to another organisation, typically by insuring such risk. The employer does this by purchasing a grouplife insurance policy from an insurance company. The employer pays the premium on behalf of the employee while the insurance company settles claims that may arise. By so doing, the ability to pay is no longer tied to the financial capability of the employer at the time of the claim.

The Practice in Nigeria

Section 9 (3) of the Pension Reform Act 2004 requires all employer to maintain life insurance policy in favour of the employee for a minimum of three times the annual total emolument of the employee. The act defined total emolument to be the sum of basic salary, housing allowance and transport allowance. The law also stipulates a fine of up to N250,000 and/or an imprisonment of one year for contravening any of its provisions.

Conclusion

Is there a grouplife insurance policy in place in your organisation? Is the minimum threshold of a minimum of three times annual emolument being kept?

It is also important to know that the burden of paying the premiums for the life policy is strictly that of the employer and the employee should not be made to bear any part of the premium in any form.

Is your employer providing for death-in-service benefit by taking out a grouplife policy?

Do you know that the law requires your employer to take out a grouplife policy for the employees?

Stay tuned as I take you through this very soon.

Keys to Success in Managing a Black Swan Event

http://www.insurancehound.co.uk/download/insurance-risk-study-sixth-edition-2011-12143

Actuaries are the 2nd Highest Paid job