The Commissioner for Insurance, Alhaji Mohammed Kari, has condemned the non-payment of dividends by some insurance firms, saying it is fast eroding the interest of investors and the insuring public towards the sector.
Kari, who stated this at the February edition of the bi- monthly members evening of the Nigerian Council of Registered Insurance Brokers(NCRIB) held in Lagos recently, also accused insurance brokers of abusing the use of their certificates, noting that some brokers sell their certificates to a different persons who use them to operate insurance brokerage business.
He said non -payment of dividend by insurance firms stands as disincentive to investors in insurance sector.
Kari noted that only about six out of 27 publicly quoted insurance companies paid dividend in the last three years.
“Amongst the 27 publicly quoted insurance firm in the stock exchange, only about six to seven insurance firm have paid dividends in the last three years and definitely there are no attraction of investors if you donâ€™t pay dividends, he stated”
Reiterating the conclusions drawn at the retreat recently held at Abeokuta, Kari said: “There is need for consolidation on all insurance firms in their director level, companies have gone so weak, we have companies that cannot pay salaries we also have companies that cannot pay claimsâ€
He assured that when the road map on repositioning of insurance firms is concluded, the Commission would come out with some directives on how underwriting will be consolidated.
Also speaking at the event, NAICOM Director of Supervision, Thompson Barineka, spoke on the role of brokers in enabling sound profitability and optimal capitalisation of the insurance institution, pointing out that the profit after tax and return on asset of the insurance companies over the past four years were agreeably rated by the brokers as not good:
Barineke, while proffering solutions to the poor figures recorded by firms for some consecutive years advised the brokers to consider the risks arising on micro economy environment on the insured, insurers and other stakeholders like exchange rates while insuring assets as it affects the profitability of the industry.
He said: â€œUnderpricing is one of the number one devil of the industry, the insurer must charge adequate premium rate as it affects financial income.
Huge unpaid claim is a huge dent on the image of the industry brokers should compile a list of claims that have overstayed due period. Avoid money laundering, avoid laundering premiums, Avoid laundering our commission.â€