The Insurance Quadrangle
The business of insurance has some arms that make it to work effectively. These arms are traditional to insurance and they are present in insurance practice all over the world. The arms are four hence insurance quadrangle.
The questions can be safely asked: what are the four arms that made up the business of insurance? The four arms are the underwriting companies, the intermediaries which majorly are the brokers and the insurance agents; the reinsurance companies while the fourth arm is the loss adjusting business. The entire four combine together to make insurance a solid business in the economy.
The underwriting companies are the usually referred to as insurance companies. They are the risk takers. They are the arm of insurance that will pay compensation to the policy holders when the unexpected happens. These companies collect insurance businesses from all walks of life in order to have enough risks which are related and can have enough consideration for the risk to be underwritten at an inexpensive premium. This is the arm of the business that is popular with the public with offices across the length and breadth of the country. It is the major arm of insurance business that is quoted on the floor of The Nigerian Stock Exchange with many companies in the country.
Within these arms, there are types of companies. Usually and especially in this clime, three types of risk underwriting companies, insurance companies, are available. These three types are general insurance companies, life assurance companies and the composite insurance companies.
The general insurance companies underwrite non-life policies. Such policies include motor, general liabilities, special risks like engineering insurance, aviation insurance among others. Examples of such companies in Nigeria include Sovereign Trust Insurance Plc and Standard Trust Insurance Plc.
The life assurance companies underwrite businesses in the area of investment unlike the general insurance business that is focused on business of indemnity. It is under the life assurance covers that businesses like term assurance, endowment policies, insurance policy linked with investments are covered. Companies that underwrite only life insurance business in Nigeria include Capital Express and Metropolitan Life Assurance companies.
The composite insurance companies are insurance or underwriting companies that combine both general insurance business and life assurance business together. Examples include Leadway Assurance Limited, Industrial and General Insurance (IGI), AIICO, Goldlink and others.
The intermediaries are the middlemen and women who canvass for insurance business from the public and place them with the underwriting companies. They are usually the brokers and the agents. The brokers are qualified insurance professionals like the people who work in the underwriting arm. However, the insurance agents may not be a professional but someone who can sell the insurance policies. Examples of insurance broking firms include Boff & Co Insurance Brokers, Hogg Robinson, Femi Johnson, Davisther, Capstone Insurance Brokers, FBN Insurance Brokers among others.
Reinsurance companies are companies that the underwriting companies also insure the risks they carry from the public. This underlines the risk sharing nature of insurance. Insurance simply put is a risk transferring mechanism. While the public transfers the risk to insurance companies, insurance companies also transfer the risk to reinsurance companies. Reinsurance companies also transfer the risk to other reinsurance companies. Example os reinsurance companies include Africa Reinsurance, Nigerian Reinsurance, Continental Reinsurance, Swiss Reinsurance amongst others.
Loss adjusters are independent arbiter that helps to interpret the details of insurance policy when the unexpected happens. They are usually qualified and chartered insurers like the underwriters. Examples include Insurance Technicalities.
The combination of these four arms make up the insurance business market in Nigeria.
Mutual Benefits partners police for development
Group Managing Director/Chief Executive Officer of Mutual Benefits Assurance Plc, Dr. Akin Ogunbiyi, has said that the firm would partner with the Nigerian Police Force in developmental projects as he commissioned an ultra modern indoor badminton complex donated by the company to the police.
Dr. Ogunbiyi noted that by virtue of its role, the Nigerian Police Force is critical to the existence and growth of country. This, he stated, made Mutual Benefits to partner with the police, which he described as an indispensable arm of developmental.
While giving reasons for the gesture, he said that Mutual Benefits was interested in the welfare of the Nigerian Police, adding that it would further encourage and improve the ability of the Nigerian Police and women to excel in competitive sports internationally.
Ogunbiyi said that it would also support the police with performance outcomes that will improve and guarantee security of lives and properties.
Consolidated Hallmark reappoints into Africa aviation pool
Consolidated Hallmark Insurance Plc says it has been re-appointed into the board of the African Aviation Pool.
A statement by the firm said the reappointment was conveyed to the firm during the just concluded 27th annual general assembly of the African Insurance Organisation (AIO) in Kigali, Rwanda.
The firm said the reappointment was with two other Nigerian insurance companies.
Consolidated Hallmark has been a member of the African Aviation Pool since 2010 in recognition of the key role it plays in the underwriting of aviation risks in Nigeria.
The Managing Director and Chief Executive Officer, Mr. Eddie Efekoha, said the reappointment was an affirmation of faith in the company by fellow risk underwriters, not only in Nigeria, but the entire African continent.
African Oil and Energy Pool, where Sovereign Trust Insurance Plc is also appointed and Aviation Insurance Pool were formed by the AIO to boost the capacity of oil and energy and aviation insurance in Africa , in order to deepen African insurance market and take up large risks in the volatile oil, energy and aviation insurance through capacity building.
The Aviation Pool has about 37 insurance and reinsurance companies from 14 African countries and underwrites business from a number of African and international airlines.
AIICO launches multiple payment options
AIICO Plc, has launched its multiple payment channels for payment and renewal of Insurance policies in the country recently.
The introduction of this milestone attests to its quest of delivering variety, convenience and ease of access to all its customers wherever they may be.
Speaking on the additional channels, the managing director/chief executive officer of the company, Mr Edwin Igbiti said this is expected to automatically ensure customer preferences and meet their expectations. “As Insurance becomes an increasingly important aspect of our lives, customers are more conscious about flexible and convenient payment options as they transact”, he added.
The channels include: POS, GTBank branches, Web E-Portal, Quickteller, Third party Scratch card, Direct Debit, Bank Order and Cashier Points.