Business
Forex Crises: Insurers Struggle To Grow Income From Imports
There are indications that the perennial crises in Nigeria’s foreign exchange market has negatively impacted the projected growth in marine and shipping insurance business.
Latest data has shown that the growth rate is far below what the industry operators expected after many years of the enabling law designed to spur growth went into full force.
However, findings have shown that the highest premium income recorded so far was N18 billion in the first quarter 2023.
This was despite the huge volume of transaction recorded in the import business, which stood at N5.3 trillion in first quarter of 2023.
Expressing disappointment, the insurance industry operators attributed this poor performance to the harsh foreign exchange market that has forced most importers to go for minimal insurance coverage, also known as third party marine insurance.
Managing Director of Nem Insurance Plc, Mr. Tope Smart, said, “Having achieved some level of progress with motor insurance since it took off in June 2012, the scheme is poised to bring down the level of fraud in marine insurance business, which is costing the sector billions of naira”.
Speaking on the situation, Managing Director of Guinea Insurance Plc, Mr. Ademola Abidogun, stated that “The issue of the constant rise in the value of the dollar against the naira is affecting a lot of businesses. It has adversely affected the import secto, and, because of that, some importers are not doing their insurances properly.
“So the high exchange rate and the unavailability of dollars have affected insurance too. Most importers are already paying huge prices for their goods because of the high exchange rate. Consequently, most importers will rather do clause ‘C’ insurance, which is equivalent to third party insurance for motor. Clause ‘C’ is actually the minimal insurance that importers can do.
“Another factor that is affecting maritime insurance premium income is that some importers get foreign exchange facility from the banks to facilitate their business because it is compulsory for them to go through the banks because of their type of imports.
“Unfortunately, due to scarcity of foreign exchange, many of such importers were forced out of business because there is no dollar to even do the importation.
“Insurance is compulsory for imports, so importers that have trade partnerships with banks, cannot do importation without obtaining foreign exchange facility through the banks. Consequently, that affected premium income as there was no import to underwrite in such instance.
“In the past, fake marine insurance thrived because the banks were not involved. But now, that is not the case because if importers have partnership with banks, they must do their insurance through an insurance company. However, the scarcity of foreign exchange has really affected us”.
Abidogun noted that the way forward is for all hands to be on deck with the insurance sector embarking on massive awareness drive.
He said, “Going forward, the insurance sector must not continue to be laid back. We must ensure that the law on marine insurance is enforced to the fullest.
Also, we must embark on awareness creation and build more awareness in the minds of the people especially importers on the importance and the role insurance can play in the foreign trade sector”.
MoniePoint Inc. a digital financial firm in Nigeria, has said it is empowering community pharmacists across the country with innovative payment solutions to improve access to drugs.
The financial firm said it had also provided loans for pharmacists under the aegis of the Association of Community Pharmacists of Nigeria (ACPN) to drive healthcare delivery in the country.
MoniePoint in a release titled, “Inside Nigeria’s community pharmacies: How Moniepoint drives healthcare access with payments and funding”, has reaffirmed its commitment to providing digital payment solutions to improve health outcomes in Nigeria.
The release examined how community pharmacies play a crucial role as vital access points for medical care in Nigeria, especially in areas with limited hospital or clinic access.
According to the release, the ACPN National Chairman, Ambrose Igwekwam, highlighted the critical role played by community pharmacies in Nigeria’s healthcare system over the years.
Igwekwam, however, expressed concerns over the challenges confronting the nation’s pharmaceutical industry which he said was hindering access to affordable medicines.
The pharmacist listed poor infrastructural systems, power, transportation, regulatory bottlenecks, importation dependency, and limited research opportunities as major challenges facing the pharmaceutical sector.
He also stressed the need for robust collaborative efforts with institutions like Moniepoint to strengthen the sector.
“As Nigeria continues to grow, improving local pharma manufacturing to meet the demands of this growth presents a key opportunity for us all.
“There is also the African Continental Free Trade Area Agreement, which is expected to boost our industry, especially when we start producing our drugs locally, which will provide the much needed foreign exchange from exports.
“We are also seeing advancements in digital health and technology which would hopefully deepen the practice of e-prescription in Nigeria”, the ACPN boss said.
Corlins Walter
In order to enhance customer service and streamline operations, the Chartered Insurance Institute of Nigeria (CIIN) has called on stakeholders in the insurance industry to embrace Artificial Intelligence (AI).
The President of the institute, Yetunde Ilori, made this call at the 2024 Office Representatives Committee (ORC) Workshop, organised by the institute, with the theme “AI and the Future of the Insurance Industry”, in Lagos.
Ilori at the event, emphasised the importance of AI adoption, noting that it was not a threat to jobs but rather a tool to improve efficiency across the insurance sector.
“It is not about AI taking over our jobs, but about us using AI to simplify processes and give maximum satisfaction to all the customers we serve whether as underwriters, brokers, loss adjusters, or in educating our members”, she said.
The workshop, which brought players in the insurance sector together, aimed to address how AI could be leveraged to transform business processes and improve customer interactions.
The Chairman of the ORC, Monica Nwachukwu, underscored the role of AI in modernising the industry, adding, “AI can automate customer and claims processes, allowing insurers to provide faster and more efficient services to their customers”.
She explained how AI could help extract data from legacy systems, enhancing decision-making processes.
“By integrating AI with APIs, insurers can feed valuable data into AI solutions to improve operations and customer service”, she added.
In his address, the Managing Partner of A4S and Training Heights, Orlando Odejide, stressed the need for companies to align their strategies with future technologies like AI, especially as they prepare for 2025.
“Any organisation that wants to grow into the future must have its strategic plan in place. If your strategy for 2025 is not ready, it should be done by October”, he advised.
He encouraged participants to think critically about how AI could be integrated into their business models to ensure they remain competitive.
“The idea is for you to use this workshop as a platform to think about your organization and how AI can help streamline your processes and improve growth”, Odejide noted.
In order to gain global respect and recognition, the National Space Research and Development Agency (NASRDA) has reaffirmed its determination to pursue its goal in ensuring that Nigeria’s space capabilities are recognised on the world stage.
The agency also reaffirmed its commitment to positioning Nigeria as a key player in the global space economy.
In a statement by the Director of Media and Corporate Communications, Dr. Felix Ale, NASRDA revealed that the Director-General of the agency, Matthew Adepoju, emphasised this during recent engagements at the 79th United Nations General Assembly and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and Global Alliance Business Association international conference in Michigan, United States.
The statement noted that Adepoju outlined a forward-thinking agenda, stressing the importance of Nigeria’s space programme as a leader in research, exploration, and technological innovation.
“Our goal is to ensure that Nigeria’s space capabilities are recognised on the world stage.
“We must foster collaborations with global space agencies to enhance our satellite capabilities and technological infrastructure”, he stated.
The NASRDA boss said the agency is focusing on enhancing satellite capabilities, expanding international collaborations, and leveraging space science for national development.
He said NASRDA will have no stone unturned in pursuit of excellence, ensuring the agency secures the necessary resources and recognition to propel it forward.
“The relationships we build today will pave the way for tomorrow’s advancements in space science.
“Innovation and progress thrive in an environment built on collaboration and inclusivity”, he stated.
He emphasised that with the support of the government, international partners, and a dedicated team, NASRDA is poised to make significant strides in the evolving global space landscape.
“We are on the brink of a new era for Nigeria’s space agency. Together, we will ensure our nation stands out in the global space economy”, he said.
Corlins Walter