AIICO Insurance Plc has reiterated its commitment to providing a robust annuity service that meets customers’ expectations, thereby, driving the growth of insurance in the country.
The managing director/CEO, AIICO Insurance Plc, Mr. Babatunde Fajemirokun, made the disclosure at the 3rd Edition of AIICO Annual Media Training organised for members of the National Association of Insurance and Pension Correspondents (NAIPCO), in Lagos at the weekend.
Fajemirokun, who was represented at the occasion by the head, Strategic Marketing and Communications, Mr. Segun Olalandu, said AIICO Insurance was doing everything possible to deepen annuity business in order to take advantage of its inherent opportunities.
The AIICO Insurance boss, who described annuity business as a game changer for everybody, noted that, the insurer is committed to a robust and effective annuity service.
He noted that, a lot still need to be done to deepen the 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 effectiveness and growth.
Speaking on the theme of the training, which is, ‘Understanding Annuity Business,’
senior manager, Business Development, AIICO Insurance, Mr. Victor Owotorose, stressed the importance and benefits of annuity to the clients and the growth of insurance industry.
Annuities, he stressed, 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 (annuitisation) phase; while an immediate annuity converts a lump sum into cash flows from day one.
Owotorose said, annuity can be bought with either a lump sum or a series of payments contributed over time, adding that, annuities come in three main varieties—fixed, variable, and indexed—each with its own level of risk and payout potentials.
The income receive from an annuity, he said, is typically taxed at regular income tax rates which are usually lower unlike when 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 disbursements, beginning either immediately or at some point in the future. The goal of an annuity is to provide
a steady stream of income, typically 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 annuitise your contributions—that is, start receiving payments. An annuity that begins paying out immediately is referred to as an immediate annuity, while one that starts at a predetermined date in the future is called a deferred annuity.
‘’Annuities come in three main varieties: Fixed, variable, and
indexed. Each type has its own level of risk and payout potential. For any of these, it is often structured as a deferred annuity,’’ he explained.
Earlier in his opening remarks, NAIPCO Chairman, 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 maximise the knowledge gained at the training to enrich the content of their reports and articles.
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