Nnorom: NFIU Has Helped to Checkmate Fraudulent Foreign Activities Within Insurance Industry

In this interview, the Managing Director/Chief Executive Officer of Pinnacle Insurance Brokers Limited, Dr. Dennis Nnorom, revealed how the Nigerian Financial Intelligence Unit has dealt a big blow to fraudulent foreign activities within the insurance industry, impact of the Nigerian Insurance Industry Reform Act 2025 on the sector and the new tax reforms, among other salient issues. Charles Ajunwa brings excerpts 

As founder of Pinnacle Insurance Brokers Limited, can you tell us what the company is all about?

We are basically into risk management, insurance services, and our scope of job includes ensuring that assets of both individuals and the corporate entities are protected on their insurance. For us to remain in the business of insurance, we are licensed by National Insurance Commission (NAICOM) and Nigerian Council of Registered Insurance  Brokers Brokers (NCRIB). We have the Nigerian Insurance Industry Reform Act (NIIRA) 2025 as amended, guiding our principles and what we do.

You have been in the industry for over 30 years, what is the experience like working in the insurance industry in Nigeria?

Well, it has been rewarding. As we know, insurance is an arrangement where unknown risk, for instance, is given to an insurance company with the payment of premium. What that means, is that, in the event of an insured event happening, you can fall back on insurance. Insurance is basically there to reinstate an insured back to the position he or she was supposed to have been before the loss occurred. So that is what we do in the primary aspect of our services. But that dovetails into larger arrangements in oil and gas, in real estate, in transportation, in aviation, and even life insurance. Insurance basically, as I’ve said, is to put back an insured in the position he was before the loss occurred.

What are the challenges in the insurance industry?

Just like every other industry, there are challenges. Challenges of non-professionals, challenges of depths of knowledge, and then accessibility of insurance. Maybe because of a peculiar Nigerian situation where everything is attributed to God. ‘My God will protect me’. Nobody’s care about when the matter eventually happens. Just like we had before Christmas, the Great Nigerian Insurance building on Lagos Island, where most people stocked their goods in Balogun got burnt, and people died because they didn’t protect what they have. If they have had insurance, what they would have done is get the records out and then move up from there for their safety. Because some of them don’t have that, they were relying on God, and when it eventually happened, some of them died in the process. That is what insurance is meant to take care of and that is why we are saying from a professional perspective, that the low acceptability of insurance has been one of the major challenges we have in the insurance industry for now. But that has improved drastically because for the corporate ones, they realised that the only way forward is to get insurance, and people are buying insurance. It has been one of the major challenges in the past, which we are overcoming now, by constant public enlightenment through the National Insurance Commission, through the Nigerian Council of Registered Insurance Brokers (NCRIB), through other sectors, including the Institute of adjusters. Now, to bridge the gap between the inexperienced or quacks, an insurance college has been established by Chartered Insurance Institute of Nigeria (CIIN), the area of insurance industry training professionals. To have a college of insurance, the aim is to train more people into insurance. Then we have the brokering aspect of it, handled by the Nigerian Council of Registered Insurance Brokers, who also are in the business of ensuring that members of the council are trained and retrained. While the National Insurance Commission chunk out the laws and rules governing everybody that does insurance. 

Lack of awareness on the part of those doing business, especially traders affected by the fire incident at Balogun recently. Don’t you think NAICOM and other bodies should be held responsible as they haven’t done enough advocacy and enlightenment programmes? 

I would disagree with you on that because I know advocacy wise, the industry has been working seriously to ensure that people are enlightened about insurance, about the risk they’re exposed to and why they should take insurance. 

But many stakeholders insist NAICOM and others haven’t done much in terms of advocacy.

If they say we haven’t done enough, I can agree with them but are we doing something? Initially, it was a question of tiny prints in insurance policies. We said, no, that has stopped. They said people just go take insurance from the local government. That also has stopped and that’s why from the brokering perspective, we have said, discuss with professionally registered insurance brokers. Just like you cannot go to court and start handling issues in court without going to a lawyer or going to deal in the stock exchange. Yes, I know that there are schemes now where you can trade from your house. But it is still better for you to talk to a professionally licensed consultant in that field. So for those who engage in services of insurance brokers, which is free of charge to the insuring public. They get the benefit of insurance. Somebody asked, how does the broker earn his income? There are laws that set out insurance services. In those laws, there’s what we call a premium. From the fixed premium income, there are components that make up the premium. Premiums to pay for insurance include the insurance risk, administrative services, insurance brokering commission embedded in the premium charged by the insurance company. So if you have a broker, he earns that money, which ordinarily would have gone to the insurance company. And that entitles him to serve you as his client. But if there is no broker, it goes to the insurance company. People have challenges when they go directly to do insurance business with insurance companies. When there are losses, for instance, the level of cooperation you’re going to get when you deal directly with the insurance company and when you deal with a broker, is not going to be the same thing. But the broker has taken you as his client and therefore he will ensure that everything is done in your favour. Unlike when you go to do business directly with an insurance company. I’m not saying it’s not good. It’s good. However, you are likely to get more benefits, more better services, than when you are dealing directly with the broker, than when you are dealing with an insurance company. That’s the difference between people having challenges getting insurance, pay them their claims and all have you. But the broker will insure because from the broker’s perspective, when loss occurs, he will follow up to ensure that the adjuster is appointed, who will assess the loss. When you have submitted your repay estimates or replacement costs, the broker will ensure that the adjuster did not surcharge the clients. He makes sure the client gets what is due to him.

That you’re not likely to get when you do a business directly with the insurance company. The good thing about that, we are licensed by the same license insurance company. Here we’re not carrying risk. We’re only providing services while insurance companies are carrying the risk. That’s why the capital base is different and that’s why if you observe NIIRA Acr 2025, it is part of the reason NIIRA Act is to insure recapitalisation  insurance companies. So they won’t take larger risks and then allow for some of the capital flight to be retained here. That’s what they’re doing in the bank now. 

What necessitated the amendment of NIIRA Act 2025? 

All the insurance Acts from inception were all constituted into NIIRA 2025. So with this now, we have a much more comprehensive law governing the business of insurance in Nigeria. NIIRA has taken into consideration those other shortfalls from other previous insurance Acts and regulations.

So it’s the more comprehensive Acts that governs the business of insurance, setting up insurance companies, job brokerage firms, reporting system, compliances, including the Nigerian Financial Intelligence Unit (NFIU)-related issues.

Why NFIU?

It was meant to checkmate fraudulent foreign activities within the insurance industry, money laundering and other related matters. That’s what that does. So with NFIU in place, people can no longer bring in funds into the insurance industry and pull it out. Unlike what was done in the past where you can get so much volume put in the insurance industry in the name of premiums and after a while you cancel your policy and call for a return premium. So you have to report all those processes now. For every return premium, it must be documented and it must be reported to NAICOM and NFIU. They are all geared toward reducing money laundry and illicit funding into the Nigeria insurance market. 

How has insecurity impacted the insurance industry in the last few years? 

Usually we are supposed to thrive in the midst of insecurity. But because we have challenges of poverty of mind, poverty of knowledge and poverty of fiscal cash, people in the industry are not maximising that apart from a few corporate entities. Yes, it is in the point of fear of the unknown that people are supposed to buy insurance policies. But even where the fear of the unknown is there and you don’t have resources to buy the insurance, it amounts to the same challenge of not maximising what we’re doing. With the new arrangement in place now, people are now keying into it to get themselves protected. Before now, insurance was meant to be an annual thing. You must pay your premium once a year so that you can have a cover for the whole year. But now with the technologies, insurance is now breaking down into quarterly and half yearly. I’m sure with time, we’re likely to go into what we have overseas where you do insurance on a monthly basis. But for now, I know of quarterly payment arrangements and a half yearly payment arrangement. And then to also help the insuring public. Most insurance companies and brokers and even banks are now financing premiums for clients. A way of helping them to pay their premiums and at an interest rate. Just like what banks do when you have done business that is due for payments that are not paid, they charge you interest and roll over. With time, we’re likely going to have a situation where insurance premium payments will now be democratised into monthly. For now, I know of quarterly payment, half yearly payment and yearly payment. 

Where does the government come in to give support?

From the regulatory point of view, which is the core mandate of NAICOM, National Insurance Commission, the government is still the highest buyer of insurance in Nigeria today because of the volume of employees, for those who are involved in life insurance-related things and even in assets. Some of the corporate buildings of the federal government and by new insurance Act which made it compulsory that they must insure every property of public use, and even private. Government also has that volume in terms of payment of premiums on those aspects of risks. One of the challenges we have is that we are yet to get the government to understand why they should even insure the roads and bridges they’re constructing. We have made a couple of proposals to the Federal Ministry of Works, Federal Capital Territory (FCT). In fact, one of the things we’re discussing in FCT now is insurance of buildings because of erection in Abuja, just like we have in Lagos. We are participating in that scheme. Right now, we’re waiting for final approval from Development Control in FCT so that every building that is under construction will be insured. When any of those buildings collapses, the cost of restarting the buildings, the cost of debts and injuries are taken over by insurance companies. So, but in normal climes, where things are done well,  governments are meant to insure the roads, flyovers, the bridges, the street lights and the signages they’re constructing. Where you provide cameras on the road, that’s supposed to be insured. But because we are still battling with getting the government to understand why they should take insurance, those things are left behind. These are sources of income for insurance companies. I’m very convinced by the target of a trillion dollar economy. Very soon, some of these things will be part of what will be done. I know that the insurance industry, through the National Insurance Commission, NCRIB, and the Chartered Insurance Institute are working hard to help the government achieve the one trillion dollar economy. All these things are part of what is supposed to be done.

Talking about insuring the federal roads, last year Anthony Joshua and his friends had a fatal road accident somewhere in Ogun State. Some say the federal government has been lukewarm in terms when it comes to repairing and maintaining the roads. What’s your take?

No. Unfortunately, two of Anthony Joshua’s friends died in the course of the accident. May their souls rest in peace. That happened because of over speeding on the part of the driver. But how does it affect insurance? The vehicles involved, if insured, are meant to be replaced or repaired. Then bodily injuries, you now determine whether the bodily injury was as a result of the vehicle parked, which is a third party liability, which is unlimited, or that it was an accident. I wasn’t there when the accident happened. But I know that the law had made it compulsory that for you to put a vehicle on the road, anywhere in Nigeria, you must have a minimum of third party insurance cover. Third party insurance cover will cover you against your third party liability to non-vehicle owners, to other road users. And I know in third party liability insurance, death is unlimited. While corporate damage is up to a million Naira plus. With this arrangement, you can get a higher cover. What that means, is that, as you are driving your vehicle and you hit somebody, or you hit somebody’s building, damage somebody’s vehicle, the cost of repairing the vehicle is a certain amount of money covered by the policy taken care of by the insurance company. But if somebody dies,  it is the court that will determine the worth of that person’s life and whatever the court says, the insurance company will pay. But note that the insurance company will also be carried along in that suit. They have to defend themselves to make sure they don’t get arbitrary awards against them. Because what they’re going to pay to the occupants of Anthony Joshua’s vehicle cannot be the same thing with a roadside mechanic, or a roadside plastic bottle collector who dies because of that accident. Either way, third party insurance is meant to take care of that. If you have a comprehensive insurance cover, which is part of motor insurance, then to cover your own vehicle and other vehicles you damage up to a certain limit. Then the middle one will have between the third party and the offensive third party fire and theft. Accident is not there, but if your vehicle is stolen, it’s damaged by fire, insurance pays for that. 

Not many Nigerians are captured in the National Health Insurance Scheme. As an expert in this field, what is responsible for the low capturing of Nigerians in the scheme? 

Well, it is still the same challenge of knowledge. 

Could it be education or?

Education is part of it. Accessibility is part of it, and then trust issue because I know that there have been complaints from some of the HMOs where they complain about limited cover with respect to certain levels of illness. Yes, in every insurance, there are categories of cover. So if you take the minimum cover, you get a minimum cover. If you take a high-end cover, you get a high end cover.

What are we looking at in minimum cover? 

We have outpatients, we have cover that will take care of surgeries and other evacuations and foreign medical treatments…Those are the high-end ones. There is medical insurance in dollars, where premiums are paid in dollars. So it all depends on the level of cover you have. But the problem we have now is because of the depth of knowledge, people assume that when they buy a cover, for instance, I just told you now about motor insurance, you have third party, you have comprehensive insurance, you have third party on fire and theft. Third party covers you against a third party liability to road users. While comprehensive covers you, cover your vehicle and that of other people you might cause damages to. So as it is in health insurance, there are HMOs who have categories of cover that will take care of basic treatments for families of four- malaria, minor surgeries. And they’re also high end of that HMOs. Usually, if you see the premiums that are always high, where you get up to some level of surgeries, cancer-related treatments, major medical aids and treatments, which include kidney-related matters and other issues. It all depends on the cover you have. Most people take the least cover, expecting to have treatment of the high-end cover. That’s where the issues are and that has been causing some breach of trust between HMOs and the clients, the general public, who are the major beneficiaries of the policies. 

President Bola Tinubu last year, presented an Appropriation Bill amounting to N58.18 trillion Naira. And he vowed about stronger discipline in budget execution and result-driven governance. What is your take on this? 

I see it as rhetoric. We are used to hearing it. We have had this statement made several times. It is one thing for the Appropriation Bill to be passed. It’s another to implement it. For us in the business world, the challenge is the civil service arrangement. Ours has its own peculiar challenges. Until we reform the civil service system, where issues of government are treated like a business, we will not achieve maximum budget targets. The challenge too, is this top to bottom arrangement of budgeting. Somebody sits in Abuja and determines what happens in my village, Umukabia Okpuala, Umuahia North of Abia State.But if the budget is from the bottom up it’s easier for people to own the budget’s  implementation and the outcome of the budget. So that’s the problem we have. We have had a case of somebody in Abuja, determining what happens in the locality where they are not staying. And the syndrome of ‘is our national cake’. It’s like a goat owned by everybody, but nobody is in charge of our budgetary system. It’s a very positive statement from Mr. President on ensuring that there is zero tolerance to budget setbacks. But the question is, who are the people going to implement the budget? The civil servants who are not looking at budgets from a business perspective. For bigger corporations, they set out a budget for the year, and the current expenditures, and the assets are implemented to the fullest. The outcome is not done in the same system. And in the budget, there are cases where provisions are made in the budget, but funds are not given because of the bureaucratic nature of raising funds from federation  accounts under the TSA system. Yes, people are saying that the FCT Minister, Nyesom Wike, has done well in Abuja because he simply moved to TSA. Incomes are gotten, jobs are looked at, contractors are given, funds are given, and jobs are executed. But that’s not the same thing with federal government agencies. If you observe from every budget cycle, the recurrent expenditures are almost 100 per cent implemented, but it is the other side of it. None of the recurrent expenditures are hanging. The infrastructure, the road, is not being funded. That’s why we have a lot of abandoned projects here and there. So, this is the challenge and that’s going to continue until we change the narratives on how government budgets are handled.

You made mention of treating the budget as a business. What actually is the problem there? 

For evaluation, monitoring and implementation of budgets, a new institute was set up which I’m a council member. The institute name is Chartered Institute of Development Studies and Administration of Nigeria. This is our second year, it’s a chartered institute approved by the law. We just had our last conference in Abuja, in 2025. The institute was put together by distinguished Nigerians. We sat down and asked the same question you asked. Why are we in the same level of poor budget implementations? Why are we not moving forward? We just realised that there are challenges of evaluation, monitoring of what we are doing. The system where a government start Ma a project, because it’s no longer there, the next government abandons it and goes to another one, is what has kept us where we are. So if we have had a continuous arrangement because we are told the government is continuum. Government comes, and government goes. So what we do here, as the government is going, all the projects, good or bad, are abandoned. The new government is taking up new ones, which has drastically reduced the budget’s implementation, and target success. The institute, as I mentioned, is set up to train Nigerians, to be able to evaluate these things. Beyond the evaluation and monitoring, we are also certifying people into migration-related matters. We are trying to set up people who can now become consultants in the area of monitoring, evaluation, and implementation of issues, including budgets.

The newly signed taxation law has continued to generate controversy. What’s your take on the taxation reforms?

No government functions without a tax system. We all know that very well, and we also know that the problems that we’re having in this country is the issue of trust. Trust in the sense that people keep feeling that the ones they paid, they don’t see the benefits of paying taxes. If you compare the tax system we have here, and the ones you have overseas, I know that tax filing rebates overseas, especially in the US, where families look forward to filing yearly tax returns and much money is paid into your accounts from the tax authorities. But that is not the case here. The case here is that, a few who pay taxes are forced to pay more. But the new tax Act, I haven’t read through it fully, I know that provisions were made that certain categories of people with earnings are not meant to be taxed both individuals and corporates. Is only when you exceed the threshold that you’re meant to be taxed. Even at that too, provisions are made that you’re going to be taxed only on the net worth. The Council of Registered Insurance Brokers is organising training for brokers on the tax issues. You tax the rich to take care of the poor. I know that it’s not like before where everybody is taxed. Now, if you don’t have a certain level of income you cannot be taxed. 

Multiple taxation has continued to be an issue? 

Multiple taxation is not good for the economy, it increases the costs on the part of the customer. If the new tax reforms will address this, that will be good. People shouldn’t be bullied to pay taxes, as they are being denied infrastructures they are paying taxes for.