The Managing Director, AIICO Insurance Plc, Babatunde Fajemirokun, said the company was committed to providing a robust annuity service to drive the growth of the insurance industry in the country.
Fajemirokun said this at an annual training for journalists covering the insurance sector with the theme: ‘Understanding Annuity Business,’ on Friday in Lagos.
Fajemirokun, represented by the Head, Strategic Marketing and Communications, AIICO, Segun Olalandu, said the underwriter was doing everything possible to deepen the annuity business and take advantage of opportunities inherent in it.
He said AIICO had strategically repositioned its annuity department for effectiveness and growth.
The managing director described the annuity business as a game-changer for everybody but noted that a lot still needed to be done to deepen the business in Nigeria.
“We are not there yet in terms of annuity, but we will get there step by step. Our partnership with you as journalists, especially in respect of today’s training on annuity is an indication of our commitment to the growth of this business.
“I thank our media partners for your support and charge you to make good use of the training to enrich your knowledge on annuity and share your experiences so that when you are reporting on the subject matter, you will be able to tell the stories accurately,” he said.
In his lecture, Senior Manager, Business Development, AIICO Insurance, Victor Owotorose, noted that annuity was very important and beneficial to clients and growth of the insurance industry.
According to Owotorose, annuity is an insurance contract that promises to pay regular income immediately or in the future.
He said a deferred annuity had an accumulation phase, followed by a disbursement (annuitisation) phase; while an immediate annuity converted a lump sum into cash flows from day one.
He explained that annuity could be bought with either a lump sum or a series of payments contributed over time.
“Annuities come in three main varieties – fixed, variable, and indexed each with its own level of risk and payout potential.
“The income received from an annuity is typically taxed at regular income tax rates, which are usually lower unlike when calculated with long-term capital gains rates,” he said.
He noted that the goal of an annuity was to provide a steady stream of income, typically during retirement.