- Woo customers with mouth watering incentives
- CBN under pressure to extend January 31 deadline
Apparently excited by the opportunity offered by the Central Bank of Nigeria’s (CBN’s) new Naira notes redesign policy to grow their premiums, insurers in the country have over began aggressive marketing of their products by talking to Nigerians to bring their old notes to them instead of waiting for hours in queues in banking halls to lodge such funds.
The CBN Governor, Godwin Emefiele, had on October 26, 2022, announced that new Naira notes would be introduced to replace the current N200, N500, and N1,000 notes in furtherance of the apex bank’s Financial
System Strategy 2020 (FSS- 2020) implementation drive.
He explained that the redesigned notes would become legal tender from December 15, 2022 while the new and
existing currencies will remain in circulation with the newly redesigned notes until January 31, 2023, when the old notes will cease from being used for transactions. While the announcement has continued to generate controversies, in terms of the timing and the 45-day deadline set by the CBN to mop up all old notes from circulation from key stakeholders in the nation’s economy, particularly manufacturers, traders, lawmakers and investment analysts, artisans and other users, many risk underwriting operators immediately saw opportunities in the policy to improve their incomes and returns on investment to their shareholders.
Investigations by our correspondent showed that following the apex bank’s announcement, some savvy Chief Executive Officers (CEOs) of insurance companies adopt the attitude of “we can benefit from this controversial policy by revving up our marketing drive and persuasively convincing Nigerians that we can protect them from the risks they see in the policy.”
The New National Star can authoritatively report that following the ‘thoughtfulness’ of some of the insurance industry leaders, some beefed up their Marketing team and pushed them out to source for ‘deposits’ from millions of Nigerians with huge old Naira notes to do away with before the January 31,2023 deadline set by the monetary authorities.
How are they doing this business? Our findings indicated that the insurance companies were actually telling people to come for Life, Retirement and Health insurance covers to avoid all forms of ‘inconveniences’ that
may be associated with taking huge sums of the old Naira notes
to their banks.
When contacted, a top management staff of one of the leading insurance companies with major presence in Abuja, who spoke on the condition of anonymity, confirmed to our correspondent that they were actually doing quick business from the opportunities opened by the CBN policy.
He said: “Yes, we strongly believe that since the policy will make people to move huge sums of money around in order to beat the deadline, we can also adopt serious strategies in our marketing to let some of this money be used for insurance covers, particularly for the uninsured, who have never been interested in insurance over the
years.
“So, what we did was to mobilize our marketing team, recruit some casual marketers and ask them to go all out to sell policy covers, especially on Life and Retirement Savings, for the benefits of the aged and those at the verge of ending their careers in either the public or private
sectors.
“I can confirm to you that the initiative is paying off as what we have gotten in the past few weeks in terms of premiums far surpasses what we made in the previous four months. It is legal and reasonable for us to think out of the box to boost our operations and return on investment for our shareholders”, he added. Another Lagos-based industry top player, who also pleaded that his name should not be in print, confirmed to our correspondent that his company was “leveraging the monetary policy regime by sending our staff all out to convince the people that using their old Naira notes for insurance cover will benefit them than taking them
to the banks.”
Reacting to the term used that they were ‘accepting deposits’, the risk underwriting expert quipped: “I don’t think what we are doing to grow our premium is accepting deposits but it may be right to say that we are pushing insurance cover drive to next level and this is legitimate for us to do if we want to grow our businesses and the industry’s contributions to the country’s Gross Domestic Product (GDP).”
An Abuja-based marketer, whose company has its headquarters in the Central Business District (CBN), Margaret approached our correspondent for quick insurance business as the deadline set for the legality of the old Naira notes beckons, saying “we can take all you have now that is out of the bank vaults and turn it into good insurance covers for you and your children and the hassle about how to safe in bank will be over.
“We have been asked to leave our desks for now and go for Nigerians searching for where to keep their old Naira notes. Our management has approved commissions for those of us who can really attract customers for insurance covers. So, that is why I am here for you. Insurance is the better option for Nigerians searching for where to keep their idle money”, she assured.
With just few days to the January 31 deadline set by the apex bank for lodgment of the old Naira notes in banks and paucity of the newly redesigned new notes in circulation, analysts believe that the monetary authorities may extend the deadline by 90 days to address some of the logistics associated with getting the new notes in circulation.
Investigations by our correspondent in the FCT revealed that over 80% of Point of Sale (PoS) operators don’t pay with the new Naira notes almost one month after the CBN formally authorized the circulation. An operator located at Gudaba junction in Kuje, Tunde, confirmed the paucity of the new currency, saying “we don’t have it at all in large quantities.
For instance, in the past week, I have not gotten up to N20,000 of the new notes and even if I get N50,000 from my bank, it will not even meet the demand of my customers for one day.” Analysts believe that it is against this background that the Senate had on December 28, urged the CBN to extend its deadline for the phasing out of
the old Naira notes from January 31st to June 30th, 2023.
The Red Chamber’s recommendation was sequel to a motion by Senator Ali Ndume, which raised serious concern
over the seeming non-feasibility of the January 31st deadline. According to him, the notice given by the apex bank is too short considering the “few” banks in Borno and Yobe states and the “inability” of bank customers in the states and many others to deposit the old notes as stipulated by the apex bank.
A few days before the National Assembly’s advice to the monetary authorities, the World Bank Group also expressed concern over the economic impact of the Naira redesign policy on Nigerian households and businesses. The Washington D.Cbased multilateral institution cautioned: “At present, households and firms already face elevated financial pressures from prolonged high inflation, recently compounded by external food and fuel price shocks, and the severe floods, and phasing out existing Naira notes over a short time period may add to their challenges.