The Nation Newspaper

Category: Insurance

  • NAICOM to insurers: provide financial status before recapitalisation

    NAICOM to insurers: provide financial status before recapitalisation

    The National Insurance Commission (NAICOM) has asked the 59 insurance firms in the country to report the capital needs of their businesses in a financial condition report in preparation for recapitalisation.

    The commission said it was necessary to determine regulatory capital that would be appropriate for the firms, which comprises Life, Non-Life and Composite, to hold sufficient capital to cover their risk and liabilities when they arise.

    Commissioner for Insurance, Mohammed Kari, in an interaction with reporters in Lagos said the commission expects the report from the firms while it prepares a guideline that would be released in due course.

    Kari said since the Minister of Finance, Mrs. Kemi Adeosun, made a statement at the last Insurance Industry Consultative Conference ( IICC), the Commission has been inundated with requests to clarify what she meant by her statement which read “would need to recapitalise.”

    He said: “But I ask, what is there to clarify? However, there is nothing to panic about. It is the expectation of any business to have adequate capital to meet its liabilities.

    “This is more so in insurance business that has a time frame for companies to settle their claims. We have quite a number of companies that have either eroded capital base or have miss-matched their assets or liabilities cover, mostly arising from wrong investment decisions. Our concern is for the firms to hold sufficient capital to cover their risks and liabilities when they arise at all times. This is very crucial in turbulent times like the ones we are currently going through.

    “While we are going to develop a full risk based capital framework, we will be expecting companies to initiate the appropriate capital adequacy reviews and have their actuary report the capital needs of their business in a financial condition report.

    “A guideline would be released in due course. It is important for all insurers and reinsurers to get used to voluntarily holding capital that would protect policy holders against adverse outcomes that could negatively affect their ability to meet their obligations. Those in the annuity business can easily relate to this statement because of their experience in 2015.”

  • Africa Re makes insurance, reinsurance awareness as part of CSR

    African reinsurance Corporation (Africa Re) has set for itself the development of the insurance and reinsurance industry in Africa as one of its Corporate Social Responsibility (CSR) initiative, the deputy Managing Director, Ken Aghoghovbia has said.

    He made this known at a briefing  in Lagos. He said the CSR initiative has been branded “The Insurance Awareness Campaign.”

    He said they decided to adopt the campaign, following many uninsured lives, properties and businesses.

    Aghoghovbia said: “We have witnessed many children unable to complete their education following the death of their uninsured breadwinners. The Nigerian Insurance Association (NIA) reported that only 4.3 million vehicles have genuine motor insurance out of 12 million vehicles on the Nigerian road and this is validated by the number of fights between drivers in events of vehicle accidents. All this could have been avoided if the individuals were aware of the benefits of insurance. The extremely low insurance penetration rate of 0.3 per cent is not healthy for the growth of the Nigerian economy.

    “The corporation is well positioned to guarantee that insurers will fulfill their roles in African markets. This campaign aims at developing an integrated behavioural change to enhance the effort made by the National Insurance Commission (NAICOM) and the NIA to bridge the knowledge, experience and perception gaps in the Nigerian insurance market.

    “The campaign is set to correct the negative and prevalent perceptions plaguing the industry; drive penetration and density as well as grow insurance culture across the country, enlighten the public on credible insurance partners on how to get and enjoy the benefits of insurance in Nigeria. Africa Re has decided to invest in creating awareness about the insurance because we realise that there is a dearth of knowledge among then general populace.”

    He said that this is in spite of the fact that as a reinsurance company, they only deal with insurers/ reinsurers and not with the individual beneficiaries of insurance policies.

  • Staco Insurance grosses N6b premium

    The Staco Insurance Plc has recorded a gross premium income of N6.19 billion in its financial year 2015.

    Former Chairman of the company, Dere Otubu, made this known at the firm’s Annual General Meeting (AGM) in Lagos.

    He said the company has appointed Turoti Samuel as the new chairman.

    He said the company’s net premium stood at N4.68 billion while profit before tax was N168.61 million.

    He noted that 2015 had challenges, which led to a decrease in revenue of 3.9 per cent from N5.96 billion in 2014 to N5.73 billion in the year under review.

    On Board changes, he said: “During the first quarter of this year, many non-executive directors left in line with the 2009 NAICOM Code of Corporate Governance.

    “During the first quarter of 2016, a significant number of non- executive directors resigned their appointments in line with the 2009 NAICOM Code of Corporate Governance. The director’s who resigned were Dere Otubu; Pius Plarewaju; Idaere Ogan; Babatunde Okoturo; Emmanusel Chiejina and Love Ojakovo while the new directors are Talabi Omotola; Alimson Olusegun; Turoti Samuel; Emore Helen Ese and Muhammad Sidi-Aliyu,” he said.

  • Prestige records N2b premium

    Prestige records N2b premium

    Prestige Assurance Plc has recorded a gross premium income of N2.4 billion in its financial year end 2015. Chairman, Prestige Assurance Plc, Hassan Usman made this known during the company’s 2015 Annual General Meeting (AGM) in Lagos.

    According to him, the company’s profit before tax stood at N20.3 million while loss incurred after tax stood at N145.3 million during the year under review due to the peculiarity of the tax laws guiding insurance companies where  tax is levied against premium earned and not profit made.

    He disclosed that underwriting expenses stood at N1.7 billion just as result from operating activities was N39.6 million. He noted that the company was well poised to tap into areas of opportunity to go forward.

    He said: “Our unmatched depth of knowledge of the market and very strong international links, gave us cause to believe that we were well poised to tap into areas of opportunity in the market with our market-winning products and services.

    “As part of our strategy to achieve our intention to be one of the top three insurance companies in Nigeria, the strategic business unit, e-business and Ikeja branch office were opened and made operational. There are plans to open more branches with the intention of acquiring more market share of the insurance industry.

    “We are also working tirelessly to adapt technology to our business and we have been able to integrate our software, Global Insurance Business Solution, to our operations’ lines and services while introducing a number of value-added products and services that would considerably enrich the company’s customer experience.”

  • Insurers to cut overheads

    • Commence industry rebranding Oct.1

    The insurance industry is working out measures to reduce its cost burden, Chairman, Sub-committee Publicity and Communications, Insurers Committee, Hassan Oye-Odukale, has said.

    He made this known during a press parley after the committee’s meeting at NEM Insurance Plc headquarters in Lagos.

    The industry, he said, hopes to achieve the feat through the use of Information Technology, adding that the industry is working with the Nigeria Interbank Settlement System (NIBSS) on the project.

    Oye-Odukale maintained that officers of NIBSS had made a presentation to the committee, which the committee was happy about. He said the committee had mandated its information subcommittee to examine the initiative and advise the general body.

    Vice Chairman, Sub Committee Publicity, Eberechukwu Nwanchukwu, said the committee was also working on improving customers’ relations, stressing that the committee believed the rebranding initiative being worked on by the industry could only be successful when customers are treated with high esteem.

    Meanwhile, insurers have said they are prepared to start the rebranding of the insurance industry from October 1, this year.

    According to Nwanchuku, insurers multi-million rebranding campaign, which will soon takeoff, will be driven through radio and social media channels.

    She said getting the youth to embrace insurance would be the core mandate of the campaign, adding that operators hope to take the campaign to schools to enable them educate pupils on the need for insurance.

    She also noted that the operators are eying the highly mobile individuals who need insurance to secure their future.

  • LASACO pays N142m claims to dead workers’ families

    LASACO pays N142m claims to dead workers’ families

    LASACO Assurance Plc has paid N142 million to families of dead workers of the Lagos State Government as insurance claims, the Deputy Managing Director, Rilwan Oshinusi has said.

    In a statement in Lagos, he said no fewer than 71 families benefited from the Lagos State Group Life/Group Personal Accident Insurance Scheme insured by LASACO Assurance Plc last month.

    He said the beneficiaries were families of the deceased in all the local government areas in Lagos State and the State Universal Basic Education Board (SUBEB)

    He said: “Lagos State is the first state in the country to come up with life insurance package for its workers and the company was committed to best insurance practices, adding that the benefits of government’s employees would not be compromised.

    “LASACO, which was founded in 1979, strives to deliver exceptional value to its teeming stakeholders by offering first class innovative products and services. In achieving this, the Company seeks to remain proactive and flexible in meeting the constantly changing factors in the business environment,” he added.

  • WAICA Re makes $33.5m

    WAICA Re makes $33.5m

    WAICA Reinsurance Corporation Plc’s gross premium income grew from $24.2 million in 2014 to $33.5 million in its financial year ended December 2015, representing a 39 per cent growth.

    The Corporation made this known during its Annual General Meeting (AGM) for the year ended 31st December, 2015.

    It has five member-countries, including Nigeria and Ghana, as its key markets. Others are Sierra Leone, Gambia and Liberia.

    However, the Corporation was unable to hold the 2014 AGM as a result of the constraints the Ebola virus epidemic placed on its economies and operations.

    At the AGM, the Chairman Mr. Kofi Duffuor, said while 2015 was challenging due to the deadly Ebola virus epidemic, it was also a year of further progress for WAICA Re in terms of strategy, operations and a robust financial performance.

    He said the retrocession premium equally increased to $2 million from $1.6 million in 2014, stating that after adjusting for unearned premium reserve, net earned premium increased by 46 per cent from $19 million in 2014 to $27.7 million in 2015.

    He said: “Interest rates remained stable during the first three quarters of the year in the countries in which we hold investments, but in the fourth quarter, rates on fixed deposits in Nigeria took a downward trend, falling from 10 per cent in September 2015 to six per cent in December, 2015.

    “We also have to disinvest some term deposits to acquire investment properties. As a result, investment and other income saw a marginal increase from $2.1 million in 2014 to $2.3 million in 2015.

    “The growth in premium income came with a corresponding increase in claims and commission expenses. Of particular significance to our claims expenditure was the flooding that took place in Ghana in June 2015. Underwriting expenses, therefore, grew by 47 per cent to 17.1 million from the 2014 figure of $11.6 million. Management expenses increased from $5.8 million in 2014 to $7.1 million in 2015.”

    He noted that as recorded in 2014, the United States dollar once again proved stronger against most currencies on the back of a robust growth of the US economy, adding that there was, therefore, a further depreciation of currencies across the WAICA member countries as well as most of the countries in which they generate premium income.

    The effect, he stated, was an exchange loss of $1 million.

    “For the fourth year, your Corporation continues to improve on its bottom line. Net profit saw a 53 per cent increase to $5.8 million from $3.8 million in 2014. As at 31st December, 2015 WAICA Re’s total assets stood at $61.4 million, representing a 17 per cent growth over the 2014 figure of $52.6 million while shareholders’ funds increased by 14 per cent from $33.6 million in 2014 to $38.4 million in 2015.

    ”Our Life Reassurance unit commenced operations in June, 2015. The Unit was responsible for all Life reassurance business across Africa. The Unit generated a premium income of $83,447 during the period. After accounting for commission expenses of $22,131 and management expenses of $76,745, a loss of $15,429 was made. We hope to grow this line of business to boost the income of the Corporation.”

    On dividend, the chairman said the Board  recommended for shareholder’s approval, a dividend of $1.500 million for the year ended 31st December, 2014.

    Since they could not hold the intended AGM, he said, they decided to pay an interim dividend of $1million.

    ‘’For the financial year, we are recommending a cash dividend of $1,000,000 and a bonus share of $1,215,580.  WAICA Re is a much stronger reinsurer today than we were a year ago. We have set the platform for a greater future, established strong financial, technical and operational paths that will spur us on to be the preferred reinsurer for our cedants and brokers, providing cover with speed and efficiency to delight business partners and build shareholder value,’’ he said.

  • ASCSN to govt: Protect pension funds

    ASCSN to govt: Protect pension funds

    The Association of Senior Civil Servants of Nigeria (ASCSN) has urged the Federal Government to offer ‘adequate protection’ to the N5.3 trillion workers contributory pension funds.

    Its President, Comrade Bobboi Bala Kaigama said the fund is  workers’ money meant to offset their terminal benefits when they retire.

    He said: “We are worried and disturbed that government functionaries are now making persistent efforts to lay their hands on the contributory pension funds in the name of funding infrastructure.

    “We say capital ‘NO’ to this retrogressive move. Our officials need to understand that the pension funds are not idle funds, but are funds invested mainly in safe instruments like money and bonds markets. We make bold to say that our country is not yet ripe for utilising pension funds for building infrastructure.

    “Our federal, states and local governments are corrupt and incompetent in recovering public funds. We, therefore, strongly advise government to look elsewhere to raise funds for their projects. Contributory pension fund is a no go area and workers and their unions are more than prepared to fight with everything they have to resist pressures to touch and toy with workers future.”

    He called for stiffer sanctions for those who looted pension funds, saying that this would act as deterrent to others.

    He appealed to the federal and state governments to ensure that pensioners were paid their gratuities and monthly stipends promptly.

  • Law Union and rock woos foreign investors for capital

    Law Union and rock woos foreign investors for capital

    Law Union and Rock Insurance Plc is wooing foreign investors to inject capital into the firm to make it be among the top five in the country, the new Chairman of the company, Remi Babalola has said.

    He made this known to reporters in Lagos.

    Babalola said the company decided to woo foreign strategic investors to improve product distribution, upgrade processes and platforms, and deepen participation in oil and gas, power and transportation segments.

    He said the outlook for the industry is positive while the company it is very bright.

    The truth is the stage at which Law Union is now, the capital is small compared to the brand value that the company has, as well as the opportunities.

    He said: “The Law Union used to be among the best five in the industry even when we had over 110 insurance companies. Now we have fewer than 50. We need to take the company to where it used to be and probably better than that and the only way we can do that is to inject capital.

    “It is to bring in skills, capacity, and technology, enhance description platform. We also want to ensure that our staffs are well trained such that they will be attracted to outsiders but we will motivate them so much that they will remain inside. The only way we can do that is by partnering with foreign strategic investors. And they are coming with non-life, reinsurance agency, and collaborations with technology companies, among others. By the time they come in, they will be significant shareholders in the company and the face of the industry will change.”

    On the Minister of Finance, Mrs Kemi Adeosun’s call for recapitalisation, he stressed that change was inevitable in the industry and the time was right for insurance operators to grow the industry.

    “If we do not take the positioning in-house and recapitalise, external forces will take the positions for us. So shareholders are taking the right decision to recapitalise now. We must not wait until we are being forced to take the decision. We have an industry that is less than 0.4 per cent contribution to the GDP and this is not good. Even Nollywood contributes much more than that. So it’s something that the operators and regulators need to sit down and talk about the fundamental problems. Why would the insurance penetration in Benin Republic be higher than that of Nigeria? Our economy is stronger.

    “It is not because we are more religious then them, or our culture doesn’t favour sharing risk and if we say that there is recession, I think that is when people need insurance more. When there is no recession, if they steal your car you can buy another one because you have too much money to play around with, you will simply buy another one.

  • Law Union and Rock posts N280m

    Chairman resigns

    Law Union and Rock Insurance Plc has posted a profit after tax of N280 million for the year ended December 31, 2015, compared to the N125 million it recorded in 2014.

    This was made known by Princess Adenike Adeniran, who resigned as the Chairman of the company at its 47th Annual General Meeting (AGM).

    According to her, the underwriting profit for the financial year stood at N1.144 billion from N1.034 billion in 2014, representing an increase of 10.6 per cent.

    She stated that gross premium written for 2015 decreased by seven per cent from N4.161 billion achieved in 2014 to N3.858 billion, but net premium recorded an increase by 7 per cent to N2.692 billion in 2015 from N2.512 billion in 2014. The increase in net premium was due to better earned premium ratio in both brought forward and the period under review.

    She added that the investment income moved from N366 million to N489 million, “reflecting our ability to generate both free float and high underwriting margins’.

    She said: “Despite the economic headwinds, the bottom line improved, the investment income was enhanced, while solvency and liquidity were higher than the prior year. This was as a result of improvement in the investible fund of the company despite the unstable investment climate and depressed interest rate in 2015.

    “The profit before tax rose by 27 per cent from N259.8 million in 2014 to N328.5mn in 2015. The increase came as a result of improvement in earned premium in the reporting period and 34 per cent increase in investment income despite seven per cent drop in gross premium written for the period under review.

    “Profit after tax reported for 2015 was N280 million compared to N125 million in 2014. The company said notwithstanding, shareholder funds increased by N276m from N4.182bn in 2014 to N4.458bn in 2015. The balance sheet remains robust, growing and more liquid. The total Assets grew by 13.4 per cent from N7.29b in 2014 to N8.27b in 2015. The cash equivalent also grew by 19.2 per cent  from N2.58b in 2014 to 3.08b in 2015. Our cash and cash equivalents account for more than 60 per cent of our investment portfolios which are superior to the industry average.”

    Speaking on the future outlook of the company, Princess Adeniran said the outlook for the industry is very positive and that of Law Union and Rock. In order to deepen the transformation of our company, the Board is in search of foreign strategic investors for growth capital to improve product distribution, upgrade processes and platforms, and deepen our participation in oil and gas, power and transportation segments.

    Managing Director, Jide Orimolade said great progress was made in 2015, as Law Union and Rock received a BBB+(NG) rating on Claims Paying Ability (CPA) by Global Credit Rating Co, a South African based credit rating bureau, confirming the company as one of the top insurance companies in the country on the ability to pay claims.

    He noted that the Insurance sector in Nigeria currently contributes about 0.65 per cent to GDP.

    “In other to increase its contribution to  GDP the  industry is tending towards developing alternative channels through innovation, building closer interaction with the informal sector operators, with intensive capacity building and nurturing of a greater expertise in micro insurance operations.

    “The regulator has introduced new guidelines to restore sanity to insurance practice in the country and deter unprofessional behaviours among operators in the industry. Also, the Federal Government has concluded plans to review the Insurance Consolidated-Bill in order to make it conform to the ideals of contemporary insurance practice and ensure an efficient insurance industry in the country. Few mergers and acquisitions were recorded in 2015 with most of the acquisition done by foreign companies,” he said.