AIICO Insurance Plc reiterated its commitment to providing a strong annuity service that meets customer expectations, thereby driving the growth of insurance in the country.
The Managing Director/CEO of AIICO Insurance Plc, Mr. Babatunde Fajemirokun, made the revelation during the 3rd Annual AIICO Media Training held for members of the National Association of Insurance Correspondents and (NAIPCO), in Lagos this weekend.
Fajemirokun, who was represented on the occasion by the Head of Strategic Marketing and Communications, Mr. Segun Olalandu, said AIICO Insurance is doing all it can to deepen annuity business to capitalize on its inherent opportunities.
The AIICO Insurance boss, who described the annuity industry as a game-changer for everyone, noted that the insurer is committed to providing a robust and efficient annuity service.
He noted that there is still much to be done to deepen business in Nigeria, adding that “we are not there yet, but step by step we will get there.”
He said AIICO has strategically repositioned the annuity department for greater efficiency and growth.
Speaking on the topic of training, which is “Understanding the Business of Annuities”,
Mr. Victor Owotorose, Senior Manager, Business Development, AIICO Insurance, highlighted the importance and benefits of annuity for customers and the growth of the insurance industry.
Annuities, he pointed out, are insurance contracts that promise to pay you regular income immediately or in the future.
According to him, a deferred annuity has an accumulation phase followed by a disbursement phase (annualisation); while an immediate annuity converts a lump sum into cash flow from day one.
Owotorose said the annuity can be purchased with a lump sum or a series of payments made over time, adding that annuities come in three main varieties – fixed, variable and indexed – each with its own level of risk and its payment potential.
Income received from an annuity, he said, is generally taxed at regular tax rates which are generally lower, unlike those calculated with long-term capital gains rates.
Owotorose defined annuity as a contract between “you and an insurance company in which you make a lump sum payment or series of payments and, in return, receive regular payments, beginning immediately or at some point in the future. The purpose of an annuity is to provide
a steady stream of income, usually during retirement.
”Many aspects of an annuity can be tailored to the specific needs of the buyer. In addition to choosing between a lump sum payment or a series of payments to the insurer, you can choose when you want to make your contributions profitable, that is to say to start receiving payments. An annuity that begins to be paid immediately is called an immediate annuity, while an annuity that begins at a predetermined date in the future is called a deferred annuity.
“Annuities come in three main types: fixed, variable and
indexed. Each type has its own level of risk and payout potential. For each of them, it is often structured as a deferred annuity,” he explained.
Earlier in his opening remarks, NAIPCO President Mr. Chuks Udo Okonta thanked AIICO for the continued sponsorship of the training which he said is the third in its series.
Chuks, who is also the publisher of Inspenonline, said NAIPCO members will maximize the knowledge gained from the training to enrich the content of their reports and articles.