NEM Boss Urges Greater Contribution of Insurance to Economic Growth

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Ebere Nwoji

The Managing Director/Chief Executive officer of NEM Insurance Plc, Mr Tope Smart, recently took a look at ways the insurance industry can promote economic growth and infrastructural development in the country.

According to him, investment in infrastructure will result in the growth of any economy and would also enhance activities of the insurance sector.

Smart spoke at the 10th anniversary lecture and awards organised by Business Journal Magazine in Lagos.
He also added that other factors such as macroeconomic environment, technological development, market size are also very important for the growth of the sector.

On the need for infrastructural development, Smart, said investment in infrastructure could stimulate organisational and management changes.
According to him, public infrastructure, provides the geographic concentration of economic resources, wider and deeper markets for output and employment.

“Public infrastructure is generally seen as a foundation on which to build the economy, e.g the development of infrastructure is one of the most important aspects for sustainable socio-economic growth.
“A research conducted by Aschaer in 1995 confirmed that public infrastructure is the basis of quality of life; for example, good roads reduce the number of accidents and increase public safety; water supply system reduces the level of disease;waste management improves the health of the environment.

“Also, social capital infrastructure has a significant positive impact on earnings”, he observed.
Smart, who delivered the key note address at the lecture which has the theme
“Insurance is the backbone of any economy because of the basic role it plays which is to restore someone, firm, government to the position it was before the occurrence of an insured peril.
“For a consideration (premium) insurance ensures the continuity of an enterprise notwithstanding the occurrence of an unforeseen event,” he added.

He highlighted channels through which the insurance industry can promote economic growth and structural development as offering protection to firms and organisations.
This would enhance their financial stability as insurance companies are compelled to take over any damage or interruption in the production process occurring as a result of the insured event.

He also said insurance promotes entrepreneurial attitude, by encouraging investment innovation and the vitality of the market, offers relieve and by so doing reduces pressure on government, increase financial intermediation through the creation of liquidity and savings through life insurance products.

Highlighting other channels through which insurance promotes economic growth, the NEM Insurance boss said: “Insurance, through life insurance companies provide funds for long-term investment in the real economy.
“In the absence of a risk transfer mechanism like insurance, economic activities would be much lower and hence will result in economic loss. Insurance also helps to smooth out the volatile economic condition”.

Wapic Insurance Posts N1.5bn Profit
Wapic Insurance Plc said it recorded a 161 per cent increase in its profit after tax (PAT) for the financial year ended December 31st 2017.

Addressing shareholders at the 59th Annual General Meeting of the company held in Lagos recently, the company’s Chairman, Aigboje Aig-Imoukhuede, said “Wapic Insurance has continued to maintain path of good financial performance through the growth of its post-tax profit to N1.5 billion, from N586 million recorded in the corresponding period last year.”

According the company’s results for the financial year under review, Wapic Insurance recorded growth across all business lines, leading to a total revenue of N13.6 billion and Gross Written Premium of N9.8 billion.
These represented an increase of 9.9 per cent and 22.5 per cent respectively, over figures recorded the same period in 2016.

Briefing the shareholders on the 2014-2019 corporate strategic plan designed to reposition Wapic Insurance, the chairman said the company recorded impressive feat on a number of projects and initiatives that would help affirm its position in the industry.

“In the areas of governance and strategy implementation, we have successfully concluded most initiatives”, said Aig-Imoukhuede, adding that “our digital transformation is the next game-changer that will sustain our quest to create value for shareholders and deliver excellent services and enjoyable experience to customers”.
According to him, under the strategic digital revolution, Wapic Insurance, acquired a new core operating system called ‘WapX’from Asseco, a leading information technology company in Poland.

He said the highly-customised insurance application was configured to improve interactions with Wapic Insurance and reinforce the company’s status.
Also speaking , the company’s Managing Director , Yinka Adekoya assured shareholders of improved financial performance.
“Clearly, the coming year, with our investments in transformational information technology infrastructure, we will be more prosperous,” she said.

She also said the company was committed to service excellence as evidenced by its 13.3 per cent increase in paid claims, from N2.85 billion in 2015, to N3.2 billion in the previous financial year.
According to her, this attest to the company’s commitment to prompt and consistent payment of valid claims and signals its confidence restoration role in the Nigerian insurance landscape through a new service paradigm hinged on innovation, empathy and operational efficiency.