The President, Chartered Insurance Institute of Nigeria (CIIN), Eddie Efekoha, has been elected as the President, West African Insurance Companies Association (WAICA).
With his election, Efekoha’s is set to add more value to insurance practice beyond the country.
Efekoha, who is the Managing Director/CEO of Consolidated Insurance Plc (CHI), is expected to promote global best practices and critical reform initiatives among the insurance sector in the sub region, making the sector reach its fullest potential.
Efekoha is the former Chairman, Nigeria Insurers Association (NIA). He hails from Ughelli South Local Government Area of Delta State.
He will be sworn in at the 43rd Annual General Meeting (AGM) and Education Conference of WAICA slated for May 7 to 9, this year in Lagos.
Category: Insurance
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Efekoha is WAICA President
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AM Best affirms Credit Ratings of AXA Mansard Insurance
AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of AXA Mansard Insurance Plc.
The outlook of these Credit Ratings is stable, according to the United States-based global credit rating agency, news publisher and data analytics provider for the insurance industry.
According to the agency, the ratings reflect AXA Mansard’s balance sheet strength, which it assesses as strong.
AM Best said: “The ratings also reflect rating enhancement, in the form of lift, from AXA Mansard’s ultimate parent, AXA S.A”, the agency statement said.
AXA Mansard’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Capital consumption is primarily driven by asset risk, which incorporates the company’s substantial real estate investments.
“AM Best expects prospective operating performance to be supported by corrective underwriting measures in the health portfolio, as well as positive contributions from the company’s life book.
“AXA Mansard has a solid foothold in its domestic market where it ranks among the largest non-life companies, and it enjoys a leading market position in the health segment.
“With good long-term growth prospects, AXA Mansard is expected to further strengthen its competitive market position over the coming years,” the statement explained.
The Chief Financial Officer, Ngozi Ola-Israel, said: “The affirmation of our ratings by an agency like AM Best lends credence to the significant improvement in our internal capital generation abilities with strong focus on continuously improving our underwriting performance through technical excellence.”
Also, Chief Executive Officer, AXA Mansard, Kunle Ahmed, said the company was pleased that its effort to build a world-class insurance company was yielding positive results.
“The affirmation of our ratings as stable and the retention of our FSR and ICR ratings despite the exposure to the high levels of economic, political and financial system risks further testify to our strong leading position and capacity to provide security for our stakeholders and ability to protect what truly matters to them,” he said.
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Insurers get N615b annuity premium from contributory pensions
No fewer than 105,047 life annuitants have paid N615.78 billion to insurers since the inception of the Contributory Pension Scheme (CPS), The Nation has learnt.
PenCom stated this in its Fourth Quarter 2022 report, stressing that a total of N201.43 billion lumpsum had also be paid to the retirees.
Retiree Life Annuity (RLA) is a product administered by life insurance companies and regulated by the National Insurance Commission (NAICOM). It is a stream of income purchased from a life insurance company by a retiree with the available Retirement Savings Account (RSA) balance under the CPS as a premium.
The retiree named Retiree Life Annuitants who chose the RLA product receive monthly or quarterly payments from his or her Pension Fund Administrator (PFA).
The regulator noted that sectoral approval of the annuitants showed that 58,448 were from Federal Government; 12,524 states and 33,675 from the private sector.
PenCom submitted that the monthly annuity payout by life insurers was N6.24 billion, adding that a total of 2,750 retirees chose annuity mode of pension payment during the fourth quarter 2022.
A lump sum of N8.11 million was approved for payment to the retirees, while N20.57 million was approved for payment to Retiree Life Annuity Providers as premium in return for the monthly annuity of N296.52 million, it said.
On the other hand, NAICOM said annuity business contributed gross premium income of N83.67 billion, which is 26.9 per cent of N309.9 billion generated from life underwriting in 2022
According to NAICOM, of the total gross premium for the industry, N726.2 billion was generated by insurers’ fourth quarter of last year, life business N309.9 billion while non-life provided N416.3 billion.
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AFREXInsure secures first transaction
Afreximbank Insurance Management Company (AfrexInsure) – subsidiary of African Export-Import Bank (Afreximbank) – has completed its first insurance policy, facilitating the issuance of construction insurance cover to Oman Shapoorji Company, a Shapoorji Pallonji Group company, in relation to the construction of the Afreximbank Africa Trade Centre in Harare, Zimbabwe.
AfrexInsure, an insurance management services company forming part of Afreximbank Group, was established in late 2021 to facilitate access to specialty insurance solutions for trade and trade-related investments across Africa.
The completion of this first transaction signals a successful start of its commercial operations and is a launching pad for the company’s business growth.
President and Chairman, Afreximbank, Prof. Benedict Oramah, observed that it is a clear demonstration that the business model of Afreximbank Group’s second subsidiary works.
He said: “Afreximbank created AfrexInsure to facilitate the insurance of specialty risks to support businesses in our member countries. This transaction not only primes the pump, but also gives AfrexInsure momentum, while sending a strong signal of its commitment to support African businesses with their insurance needs and requirements. It also demonstrates to the community of Afreximbank insurance industry shareholders that Afreximbank will work with them in a mutually beneficial manner.
“It is well known that insurance penetration is relatively low in Africa compared to other regions. AfrexInsure will intensify efforts to address this need in Africa and its partner states in the Caribbean. We are therefore delighted to have successfully issued the first insurance policy; proud to have taken these first steps and look forward to the growth of this business as we provide essential support to Afreximbank member countries in their trade and trade-related investments.’’
Building on Afreximbank’s Africa-wide presence, its network of shareholders from the insurance industry, and deep understanding of the African market, AfrexInsure offers specialty insurance solutions tailored for trade and trade-related investments in Africa, covering, among others, cargo, construction, operations and energy risks.
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Why insurance remains penny stock
•Shareholders say only NEM, AXA Mansard, Custodian pay dividends regularly
Insurers need to grow their bottom line and perform better for their stocks to appreciate from being penny stocks which has been the case for decades, shareholders have said.
Lamenting that many of them do not pay dividends to shareholders, they listed only NEM Insurance Plc, Custodian Insurance PLc and AXA Mansard Insurance Plc as the companies that have consistently paid dividends.
While they noted that the dividend may be small, they commended the companies for being consistent.
The shareholders under the auspices of Independent Shareholders Association of Nigeria (ISAN) further listed high management expenses, low insurance awareness and lack of claims payment by some companies as problems mitigating against real growth of insurance companies and the industry as a whole.
ISAN National Coordinator, Moses Igbrude said though the capital market is undervalued because of the way the economy is dainted with insecurity and other issues, notwithstanding, the performance of any stock depends on the performance of a company.
He noted that NEM, Custodian and AXA Mansard have been paying dividends but that they have been consistent and this has made their shares to be relatively high.
Igbrude pointed out that their shares have hovered around N1 to N3 compared to the companies that are less than 50kobo.
He stressed that performance was needed for companies to move from penny stock to high-yielding stock.
He insisted that there is no other way around it, noting that some companies have tried to manipulate the system by reconstructing shares and increasing the share price high.
He said despite the manipulation, the shares still fell at the end.
He further stressed that high management expenses of insurance companies as a problem.
He said: “Management expenses of insurance companies are too high. Some of them live flamboyant lifestyles that they have not worked for. There is also the issue of low insurance awareness and lack of claims payment. As it is today, very few insurance companies in Nigeria are performing to expectations. These few companies are well-structured and focused on insurance business. We believe that the companies that are not performing should understudy those that are performing and work on their challenges.
“As a shareholder group, we are not benefiting enough because the dividends the companies pay are kobo dividend and that is why their share prices are also very low at 50kobo par value. Yet, they have volume of shares in circulation. When we engage the management, they tell us insurance business is different from other business.They said in insurance business, there are some certain things they have to write off and provide for to make provisions. The bottom line is what is left for the investors to fall back on.
“There are different ways in which a company can manage the balance sheet. It is okay to pay salary and other overheads but you cannot make much profit by living a flamboyant lifestyle. At the end, they tag it as a cost of running the business.The managers of the insurance industry need to know that managing businesses like insurance companies should be all-inclusive in the sense that while you satisfy yourselves, you should satisfy the customers, workers and investors,’’ he added.
The National Secretary, ISAN, Chibuzor Eke, called on the National Insurance Commission (NAICOM) to provide an enabling environment for insurance business to thrive.
He challenged insurance firms to wake up and focus on their core business to attract investment.
He noted that insurance business is quite challenging given that operators were bent on playing with funds instead of focusing on their core business.
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Sanlam Pan Africa inducts Ojumah into Council of Elders
Sanlam Pan Africa (SPA) has inducted Valentine Ojumah into its Council of Elders.
In a statement, the Senior Marketing Services Coordinator Sanlam Life Insurance Nigeria Limited, Bankole Banjo, said SPA is the business cluster for Sanlam Group’s operations in Africa, including Sanlam Nigeria.
Ojumah, who is one of two first-ever inductees into the council, is the pioneer Managing Director/Chief Executive Officer of the Sanlam Life Nigeria until he retired last year.
With over 35 years’ experience in risk management, insurance broking, consultancy and training within the industry, academics and research, Ojumah served Sanlam Nigeria for 12 years.
Sanlam Pan Africa Life Chief Executive, Robert Dommisse said: “On behalf the SPA Life team, I am delighted to acknowledge Val as an inductee of the council.
“He is a visionary and exemplary leader, who has led the business with verve and conviction since inception. True to his innovative leadership, Val has been awarded some top awards during his career at Sanlam. Most recently, these included: SPA Life CEO Award (2021), AfricaRe, CEO of the year in Africa (2020), Sanlam Group Chief Executive Officer award (2016).
“As Val moves to enjoy the next chapter in his life, we are thrilled that he has accepted to serve on the SPA Life Council of Elders. We look forward to having the benefit of learning from his extensive leadership experience and fountain of knowledge to tackle challenges and opportunities for our business in the future.”
The Managing Director/Chief Executive Officer, Sanlam Life Insurance Nigeria Limited,Tunde Mimiko, congratulated Ojumah and commended his multi-disciplinary experience in building Sanlam Nigeria from inception into a successful business.
The Managing Director/Chief Executive Officer, Sanlam General Insurance, a subsidiary of Sanlam Life Insurance, Bode Opadokun, also lauded the industry legend, saying: “We are proud of you and look forward to many more years of contribution to the organisation as a member of the Council of Elders.”
Ojumah urged for the growth and development of the organisation.
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Insurance industry needs to commit to phasing out fossil fuels
Large insurers continue to insure and invest in projects related to the extraction and burning of fossil fuels, contributing to the main cause of global warming.
Senior Energy Finance Campaigner with Rainforest Action Network (RAN), Elana Sulakshana, explained: “There’s a massive gap between words and action – and the Net Zero Insurance Alliance does not appear to be stepping into bold leadership to close that gap.
“This is why we need insurance industry regulators to step in and safeguard the public good.”
Although 32 insurers have made commitments to achieve net zero greenhouse gas emissions as members of the Net Zero Insurance Alliance (NZIA), none have committed to phasing out fossil fuel underwriting in line with plans to prevent a global temperature rise of more than 1.5C.
As our briefing highlighted, we cannot rely on insurers’ voluntary initiatives. Now is the time to include crucial sustainability measures in the Solvency II Directive.
“The latest UN climate report delivers a ‘final warning’ to humanity about the impact of climate change, but the insurance industry is still funding and underwriting fossil fuel companies. Policymakers need to step in.’’
” Better regulation of the insurance industry is needed to protect our planet and its people and to safeguard the industry itself.A s losses related to climate change are expected to increase we need stronger insurance companies – and that means safer levels of capital requirements.
“Higher capital requirements for fossil fuel investments would also make these investments more expensive, pushing insurers to divert and divest from these sector – with a positive environmental effect for us all.N o matter how technical the topic of ‘capital requirements’ sounds, it boils down to a clear political question – do we want more, or less, burning of fossil fuels?
“The European parliament is in the middle of heated negotiations to review the EU insurance legislation Solvency II. The EU supervisor for insurers and pension funds has been consulting stakeholders, in view of recommending changes to insurers’ capital requirements to take climate risk into account.
• Culled from ShareAction
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AIICO, Leadway, others among Top 100 insurance companies in Africa
AIICO Insurance Plc, Leadway Assurance Limited, Custodian and Allied Insurance are the top three indigenous insurance companies that made it to the Top 100 insurance companies in Africa in 2021, a report has shown.
The report released by Atlas Magazine and obtained by The Nation shows that Axa Mansard Insurance Plc and Mutual Benefit Assurance as among the Top Five companies in Nigeria that made it to the Top 100 in Africa.
This was followed by NEM Insurance Plc, which made it as top five companies in the category under review.
AN analysis of the report showed that AIICO made it into the top 50 insurance companies in Africa as it stood at number 46 on the list.
Similarly, Leadway emerges as number 48, Custodian and Allied 49, Axa Mansard 52, Mutual Benefit 91 and NEM 96.
It is worthy of note that the Top Five insurance companies in Africa are from South Africa with Sanlam as number one; Old Mutual Life as number two; Liberty as number three; Santam as number four and MML Group Limited as number five.
Meanwhile, the top category, Wafa Assurance of Morocco emerge as number six; Guardrisk Insurance of South Africa as number seven; RMA of Morocco as number eight; The Hollard Insurance of South Africa as number nine; and Old Mutual Insure of South Africa as number 10.
The companies ranking was evaluated based on 2020 and 2021 turnover in local currency.
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Shareholders praise NAICOM for restoring IEI Insurance
- Frown at liquidation of firms
Shareholders have commended the National Insurance Commission (NAICOM) for reviving International Energy Insurance (IEI) Plc.
The National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Moses Igbrude, spoke with some reporters in Lagos.
He said they were excited that IEI was back and stronger.
He said for restoring the company, the commission has saved the jobs of the firm’s employees; save investors’ investments, protect policyholders and also impacts the economy, as it would continue to pay taxes.
He noted that shareholders were grateful to NAICOM for bringing back the underwriting firm, stressing that with the restoration, NAICOM has proved that it is not interested in the dearth of any company.
He commended NAICOM for appointing a board to manage the firm during the crisis and for allowing a genuine investor to take over the firm.
Igbrude noted that shareholders were against regulators for liquidating enterprises, adding that liquidation rob the economy of taxes, jobs, good investments and policyholders, their finances.
He implored NAICOM to apply the same efforts used in reviving IEI to save other firms that are not doing well.
He submitted that shareholders would continue to support NAICOM to ensure insurance firms live up to their responsibilities.
Igbrude went further to described as pathetic the foreign acquisition of insurance companies.
He expressed worry over the development, stating that most foreigners only take advantage of the nation’s bad economy, undervalued stocks and the poor exchange rate.
He said: “Our economy is so bad that most of our stocks are undervalued, our exchange rate is so poor, only a million dollar will translate to N700 million, then if you have N700 million, in this industry, you can buy and have a stake in insurance companies.
“The commission should know that not all Direct Foreign Investment (DFI) is good for the economy. Some of the portfolio investors come to take advantage of the weak laws and economy. What they do is buy into firms and delist them from Nigeria Exchange and they become private business and, then, hid them from the eyes of the government and the next thing, you wouldn’t hear about the companies again,” he said.
Acknowledging that there were still good investors, he appealed to the NAICOM to allow only genuine investors into the industry. He urged the commission to put in place a process to check the fake ones.
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Insurance agents generate N141.39b
AGENTS are gradually taking over the underwriting space through retail practice which has placed them top in life business premium drive
This is despite the challenges confronting them.
According to data obtained from the latest edition of the Nigeria Insurance Digest 2020, published by the Nigerian Insurers Association (NIA), agents controlled life business with N141.39 billion premium generated in 2020.
National President, Association of Registered Insurance Agents of Nigeria (ARIAN) Odewunmi Olakunle told reporters that the feat was achieved through personal sales of insurance, adding that the agents were working to also take control of the non-life business.
For their efforts, insurance brokers, agents and others earned N97.07 billion commission from underwriters and reinsurers in 2020.
Available data revealed that non-life insurers, paid N37.97 billion commission, life operators, N52.97 billion, takaful providers, N239 billion and reinsurers, N5.85 billion.
Insurance agents generated N164.08 billion, of the industries N508. 4 billion 2020 gross premium written, representing 32 per cent; brokers, N281.08 billion, which is 55 per cent; direct sales yielded N42.95 billion indicating nine per cent; banassurance N4.69 billion, one per cent; e-channel, N3.77 billion, one per cent and others, N11.86 billion, two per cent.
According to the NIA, out of the industry’s N508.44 billion GPW, N388.03 billion was generated from Lagos State.
NIA noted that while Lagos provided the highest premium for the sector, Yobe State gave the lowest amount of N17.78 million.
The Federal Capital Territory (FCT) came second with N48.08 billion followed by Rivers State with N21.98 billion.
Oyo State provided N7.83 billion, Delta State, N5.23 billion, Kaduna State, N5.17 billion and Edo State N4.16 billion.
In terms of claims, Lagos got, N177.54 billion, FCT, N17.36 billion and Rivers, N6.52 billion.
An analysis of GPW contributions by region showed that Southwest provided N402.32 billion; Northcentral N52.57 billion; Southsouth, N33.49 billion; Northwest N9.71 billion, Southeast N9.62 billion and Northeast N721.72 million.
On claims, Southwest got N182.94 billion, Northcentral N18.78 billion; Southsouth N10.21 billion; Southeast N4.10 billion; Northwest N3.17 billion and Northeast N374.79 million.
The Chairman, NIA, Mr Ganiyu Musa, said despite the huge challenges in 2020, the industry witnessed growth in its premium written as figures rose marginally by 3.6 per cent from N490.8 billion to N508.4 billion.