Regulation on Group Life, Motor Third Party most positive for insurers in 2018 – Cornerstone GMD

Two major reforms that have impacted positively on insurance industry performance and growth in 2018 are regulatory interventions on group life business as well as on Motor Third Party policies, Ganiyu Musa, group managing director/CEO, Cornerstone Insurance Plc has said.

The reforms, which were driven by the National Insurance Commission (NAICOM) he said corrected the pricing of the products and enhanced compliance of operators.

Musa who spoke in Lagos during an interview section with a select journalists said the insurance market had suffered huge losses as a result of uncompetitive pricing of these products due to unhealthy competition by operators, stating that with the intervention of NAICOM which stabilized Motor Third Party at N5, 000.00 and group life at 6 per-mill, companies have garnered resources to meet claims obligation.

“Before this policy on group life, some life businesses were getting to stress level as a result of uncompetitive pricing, while claims kept coming”.

He said today, majority of them can be able to pay their claims because premium is right, “what is the need being in business and you cannot be able to pay claims, Musa asked.

The GMD speaking on the business environment in the outgoing year lamented that the year was very challenging as result of the overall social and political environment, which impacted on investor confidence.

He noted that increasing insecurity in North East; delays in passage of the Petroleum Industry Bill, increased regulatory militancy, across the sectors, which saw telecommunication giant, MTN fined twice heavily were among the issues that affected the business environment in 2018.

“Even in our own industry, we also go a share of the regulatory downside, and all of these are impacting negatively on investor confidence, he said.

Other issues that affected insurance business in 2018, which Musa enumerated includes the declining prices of products and premium war that has continued to affect growth of the industry.

For Cornerstone as a company, Musa said 2018 was not bad in terms of numbers, as approved result up to last September shows that top line growth was over 30 percent.

According to him, the company also recorded profitability having overcome the negative position it went through the previous year.

Again, exciting for him was the firms N8 billion corporate head office, almost at the level of completion, which he said is an investment and would start to impact on her books at the end of 2018 financial year.

Going into 2019, he said he is hoping that the industry will cure itself of the price war that has characterized the business, and compete effectively in other fundamentals rather than price.

This he hops will support industry growth and performance in the coming year.

Modestus Anaesoronye