The Nation Newspaper

Category: Insurance

  • Consultation begins on Higher Loss Absorbency (HLA) requirement

    The International Association of Insurance Supervisors (IAIS) has begun a public consultation to help finalise development of the Higher Loss Absorbency (HLA) requirement for global systemically important insurers (G-SIIs).

    The IAIS is seeking feedback through several options to further support and inform the design, development and calibration of the HLA. In July 2013, the IAIS published its assessment methodology and policy measures for G-SIIs. These policy measures include a HLA requirement, the primary purpose of which is to help reduce the probability and impact on the financial system of the distress or failure of a G-SII.

    The HLA is to be delivered to the G20 for endorsement in November 2015 and will apply to G-SIIs from 2019.

    As a foundation for HLA requirements, the IAIS developed last October, the Basic Capital Requirements (BCR) to apply to all group activities, including non-insurance activities, of G-SIIs. When the HLA is implemented, G-SIIs will be expected to hold qualifying regulatory capital that is not less than the sum of the required capital amounts from the BCR and HLA.

    The consultation does not focus on specific formulas, but rather seeks feedback on a structure designed to address the key objectives of risk sensitivity, robustness and simplicity.

    The IAIS has also released additional information regarding the development of its risk-based, global insurance capital standard (ICS), which will apply to internationally active insurance groups (IAIGs) as part of the IAIS’ common framework for the supervision of IAIGs, or ComFrame.

    Specifically, the IAIS has recently agreed on detailed goals for its previously announced milestones of a Version 1.0 (for confidential reporting) and Version 2.0 (for adoption within ComFrame) of the ICS. Two of the principles for ICS development have also been updated in response to comments received during the recent public consultation.

    Further, in order to allow field testing volunteers sufficient time to complete the on-going data requests and more time for the subsequent analyses, the IAIS has adjusted the ComFrame and ICS delivery schedule. A document setting forth the ICS’ ultimate goal, interim goals, principles for development and delivery process is available on the Common Framework section of the IAIS website.

     

  • ‘Our award is for Pension’

    The Award for Mass Mobilisation of Pension Asset conferred on Premium Pension Limited at the Lagos Chamber of Commerce and Industry Commerce and Industry (LCCI) Awards is an imprimatur of the Chamber on the strides made by the  pension industry, in translating the Contributory Pension Scheme (CPS) into a huge success, Managing Director, Premium Pension, Wilson Ideva, has said.

    Ideva, who made this known after the presentation of the awards in Lagos, said the N4.9 trillion secured as pension assets in the new pension scheme, represents the tremendous success that is possible when interpretation and translation of government policies is private- sector-driven under strict regulatory guidelines and supervision.

    He said: “It is the collective effort of the entire industry stakeholders that has resulted in the humongous amassment of pension assets in the country through the new Contributory Pension Scheme,’’ shortly after the presentation of the awards at the MUSON Centre, Onikan, Lagos.

    “The N4.9 trillion  secured as pension assets in the new pension scheme represents the tremendous success that is possible when interpretation and translation of government policies is private sector-driven under strict regulatory guidelines and supervision.

    Ideva praised the National Pension Commission (PenCom) for their high sense of commitment and professionalism demonstrated from inception in the regulation and supervision of the pension industry.

    “By my own estimation, PenCom is the most effective regulatory body on the continent of Africa. The result of their manifest professionalism and high sense of commitment is what we are celebrating today.

    “ Premium Pension Limited is one of the Pension Fund Administrators (PFAs) operating the Contributory Pension Scheme and currently manages over 600,000 Retirement Savings Accounts (RSAs). Managing pension asset put at over N370 billion, the company has paid out more that 87.3 billion Naira to 33,785 retirees or their next-of-kins since 2007. “Pension enrollees under the company’s management are spread over 1000 organisations across the country while the company has consistently posted impressive returns.

    “According to the Lagos Chamber of Commerce and Industry, the Annual Commerce and Industry Award is to recognise, promote and celebrate public and private institutions operating in Nigeria for best business practices, growth through innovation, business sustainability and positive impact on people.

    “The metrics for selecting awardees included but not limited to corporate governance, level of disclosure, wealth creation, levcompliance with set standards and positive impact on society.

    Ideva also seized the opportunity to commend the National Pension Commission (PenCom) for their high sense of commitment and professionalism demonstrated from inception in the regulation and supervision of the pension industry.

    “By my own estimation, PenCom is the most effective regulatory body on the continent of Africa,” he said.

    “The result of their manifest professionalism and high sense of commitment is what we are celebrating today,”  he added.

    Premium Pension Limited is one of the Pension Fund Administrators (PFAs) operating the Contributory Pension Scheme and currently manages over 600,000 Retirement Savings Accounts (RSAs). Managing pension asset put at over N370 billion, the company has paid out more that N87.3 billion to 33,785 retirees or their Next-of-Kins since 2007. Pension enrollees under the company’s management are spread over 1000 organisations across the country while while the Company has consistently posted impressive returns.

    According to the Lagos Chamber of Commerce and Industry, the Annual Commerce and Industry Award is to recognise, promote and celebrate public and private institutions operating in Nigeria for best business practices, growth through innovation, business sustainability and positive impact on people.

    The metrics for selecting awardees included but not limited to corporate governance, level of disclosure, wealth creation, level of compliance with set standards and generally positive impact on society, Paddy Ezeala Head, Corporate Communications, said.

    The company’s Executive Director, Operations and Services, Mr. Kayode Akande, said driving the CPS requires exemplary synergy among operators and cooperation among stakeholders, especially in generating public awareness on how the scheme runs.

    “There is practically nothing anybody can do alone in ensuring the success of the CPS” he said. “We all have to work together and we are already doing that.” It is the collective effort of the entire industry stakeholders that has resulted in the humongous amassment of pension assets in the country through the new Contributory Pension Scheme” said Mr. Wilson Ideva, the Managing Director of the company shortly Kayode Akande stated that driving the CPS requires exemplary synergy among operators and cooperation among all stakeholders, especially in the area of generating public awareness on how the scheme runs. “ He said that there is practically nothing anybody can do alone in ensuring the success of the CPS. He said: “We all have to work together and we are already doing that.

     

  • LASACO Assurance posts N5.63b gross premium

    LASACO Assurance posted N5.63billion in  gross premium in the year ended December 31, 2014, as against the N4.96 billion recorded in 2013, Group Managing Director, Olusola Ladipo-Ajayi has said.

    Lado-Ajayi, who made this known in Lagos, said the company’s profit before tax grew to N525. 85 million as against N412.8 million made in 2013.

    According to him, earning per share also increased from N00.4 in 2013 to N00.6 in the year under review. He said: “The company’s revenue base and performance increased thus affirming its leading role in the insurance sector of the economy.

    “The performance is a product of team work and strategic deployment of resources and the restructuring is paying up. We have deployed both human and physical resources to chart a new direction for the organisation to remain the toast of investors.’’

    He said the company is living up to its mission to enhance profitability and deliver dividends to its stakeholders. He added that they have embarked on several restructuring programmes aimed at focusing on its core competence areas to deliver positive results that engender corporate growth.

    He underscored the commitment of the company to sustaining its customer centric posture in order to remain a dynamic and vibrant player in the nation’s financial services sector. This has manifested in several strategies being deployed to develop innovative products and services to align with the aspirations of the customers.

     

     

  • Wapic Insurance MD resigns

    Wapic Insurance Plc has announced the resignation of Ashish Desai as Managing Director (MD).

    This was made known in a notice by the underwriting firm to the Nigerian Stock Exchange.

    The resignation took effect from July 28, this year.

    According to the firm, the resignation is in line with its succession planning policy its board of directors, intends to conclude the process of recruiting a successor before the end of the year.

    The notice read that in the interim, Bode Ojeniyi, the Deputy Managing Director (DMD), whose appointment was approved by the National Insurance Commission on March 23, this year, take over the company until a new helmsman is appointed.

     

  • Operators lauds Kari’s appointment

    Operators lauds Kari’s appointment

    Operators have lauded the appointment  of Commissioner for Insurance, Mohammed Kari by President Muhammadu Buhari.

    The operator’s expectation are high. They are hopeful that the new commissioner will provide regulations that will further drive the growth of the insurance industry.

    Buhari appointed Kari on July 31, this year on the same day former Commissioner, Fola Daniel’s tenure in office ended.

    Daniel held the position for eight years. Director-General, Chartered Insurance Institute of Nigeria (CIIN), Kola Ahmed, thanked the president for his quick response in appointing someone as the commissioner.

    For him, it shows that President Buhari’s administration has focused on the industry. He describe Kari’s appointment as the right speg in the round hole and in the right direction.

    He said: “I also see his appointment as a vote of confidence by the government on NAICOM programs. This is why they chose somebody from the Commission.

    “He does not have to reinvent the wheel because he has been part of the existing policies. It is good for the industry too because we don’t have to start understanding the commission all over again. We will cooperate and support him.”

    The CIIN DG further noted that Kari is a strict person and that is the kind of person the industry need. He said that while the former commissioner on his part enforced the Insurance Act 2003 on operators, he believes the new commissioner will continue with a lot of force.

    “He is somebody that will not bend the rules for anybody. He knows the pranks that any underwriter, broker, loss adjuster, agent and any other stakeholder in the industry may want to play. Everybody will just have to do the right thing”, he said.

    Chairman, Nigeria Insurers Association (NIA), Godwin Wiggle said the association was willing to work with the new commissioner to make the industry better.

    He said they expect more regulatory reforms to place the industry at par with global best practice. He said the commissioner is a critic and focus person whom they believe will make an impact.

    Managing Director, AIICO Insurance Plc, Edwin Igbiti, said the commissioner’s appointment is a welcome development.

    “Kari is a practitioner who knows the pains of the operators. The fact that the president appointed him shows succession plan in the industry.

    “One thing we have to give to the former commissioner is that he has set the stage on a high level and Kari cannot afford to let down the level at this moment. I believe he will help us obscure the level in terms of the control the industry needs presently,” he added.

  • Cyber risk, others threaten CEOs, says PwC

    The findings of two reports by PwC that chart the top risks in the global insurance sector and the growth concerns of insurance  chief executive officers shows that cyber risk, interest rates and growing tax burden are now among the top risks for insurers.

    This is indicative of how high a concern these issues have become for the industry when looked at in conjunction with regulatory developments and the broader macro-economy.

    One of the reports, Insurance Banana Skins 2015, a global study by Centre for the Study of Financial Innovation (CSFI) in conjunction with PwC polled over 800 insurance practitioners and industry observers in 54 countries, including Nigeria, to find out where they saw the greatest risks over the next two-three years.

    Regulatory risk emerged as the overall top risk for participants in the survey for the third successive time, underlining the deep impact regulatory change is having. The report says that new rules governing solvency and market conduct could swamp the industry with costs and compliance problems. It could also distract management from the task of running healthy businesses at a time when the industry faces radical structural change. Similarly, the second report ‘Insurance 2020: Equipping your business for the global tax revolution noted that the reputation and well-being of companies, including insurance groups, is not just being impacted by governments, taxpayers and other stakeholders but also by external perceptions of how they manage their tax affairs.

    PwC Nigeria Financial Services Leader, Patrick Obianwa, said: “The insurance industry faces enormous challenges in the growth of regulation, a difficult operating environment, increased taxation and the looming threat of structural change. This is reflected in the negative sentiment behind these survey results. Given the current speed of regulatory, technological and social change, the challenge for the insurance industry globally is less about what is already happening, and more about how to anticipate what further changes could happen between now and 2020.

    Very few tax teams appear to have evaluated the likely future alternative scenarios, let alone made plans or put them into implementation.” Tax is firmly under the spotlight and in the global insurance industry, the ramifications for finance and tax teams will be felt in both a new set of business demands and an overhaul of how these functions interact and operate.

    PwC’s report says that globally, this industry will find it difficult to cope due to the accelerating shift in market expectations, and challenges to existing business models, in a sector where operational processes are already stretched.

    Head, Tax & Regulatory Services at PwC Nigeria, Taiwo Oyedele, also said: “Tax has always been one of an insurer’s most significant expenses, comparable to payroll and claims. CFOs and CEOs have looked to their tax professionals to find ways to manage their tax liabilities, and as transactions and legislation become more complex and sophisticated, so do tax arrangements.

    ‘’As companies focus on maximising return on equity and managing capital under new solvency regimes, the value that can be created by tax professionals is becoming increasingly recognised and highly prized.”

    “The certainties and demands that have shaped tax management over the past 30 years are being swept aside. What tax teams are required to do, how they do it, who does it and where they do it will all change as a result. The challenges of managing risk and tax costs are heightened by a raft of new tax compliance demands.

    Key developments in place or on the near horizon include the EU’s Common Reporting Standard (CRS), the OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan and US Foreign Account Tax Compliance Act (FATCA). Tax teams also face a host of local reforms – the UK’s Diverted Profits Tax, new anti-avoidance rules in Australia and new controls on related party payments in Mexico are just some of the many examples.

    “While some of these developments have been on the radar for some time, the operational impact of so much disruptive change in so short a period is now becoming increasingly evident. Insurance CEOs globally are clearly concerned as evidenced in PwC’s global CEO survey in which 64 per cent said they see the increasing tax burden as a threat to their growth, compared to 57 per cent two years ago.

    Obianwa adds: “The long-term prospects for insurers are positive as people around the world live longer and have more wealth to protect. Yet they also face the disruptive impact of new technology, changing customer expectations, more exacting regulation and enduring economic uncertainty. Insurers’ ability to identify and manage emerging as well as familiar risks will be one of the key differentiators for success in this volatile competitive environment.

    ‘’It is vital that the insurance industry responds in a clear and thoughtful way to a much wider base of stakeholders than before, including not only tax authorities and governments, but also regulators, investors, non-governmental organisations (NGOs), the media and the public.’’

     

  • CIIN holds investiture tomorrow

    The Chartered Insurance Institute of Nigeria (CIIN) will tomorrow install Lady Isioma Chukwuma, the Managing Director of Nigeria Re insurance Plc, as its  47th President.

    The investiture will hold at the Federal Palace Hotel, Victoria Island, Lagos at 1 pm.

    It will be chaired by Chief Ade Ojo, Chairman, Elizade Motors and Custodian and Allied Insurance Plc.

    The theme of Lady Chukwuma’s presidency is: Consolidating the gains of the industry for national economic growth.

    Lady Chukwuma, a reinsurer succeed Bola Temowo, a loss adjuster. Chairman of the Presidential Investiture Committee, Fatai Lawal, said the theme is borne out of the need to consolidate on the gains the institute has made during the tenures of  former presidents.

    He said Lady Chukwuma aims to achieve the objectives of her theme by situating the CIIN on the global stage, upscaling collaboration with CII, United Kingdom, promoting insurance awareness by increasing the visibility of insurance through publications in the print medium and pay courtesy visits to the newspaper houses.

    According to him, she also intend to follow-up on the recognition to CIIN Certificate by the Head of Service (HOS) of the Federation, renew pursuit of training of insurance teachers,  achieve wider coverage in the presentation and distribution of the institute’s sponsored insurance textbook for senior secondary schools, completion of institute’s Exams Syllabus Review.

    Other ways she intend to achieve her aim is to commence of work in the institute’s Victoria Island property, pursue extending the institute’s professionals to countries in West and East and Central African sub-regions, including Ghana, Sierra Leone, Liberia, Kenya, Uganda, and Zimbabwe and promote members’ benefits.

    Lady Chukwuma is Deputy President of the institute. She has served the institute in various capacities over the years and has remained committed to the institute’s cause since her election into the institute’s Governing Council in 1999.

    Born in her home town of Asaba in Oshimili South Local Government Area of Delta State and qualified as Associate of Chartered Insurance Institute, London in 1990, Lady Chukwuma joined Nigerian Reinsurance Corporation in 1980. She rose through the ranks till she was appointed helmsman in 2009.

     

     

  • Shareholders blame regulators for imposing fines on firms

    Shareholders blame regulators for imposing fines on firms

    Shareholders in the insurance industry have expressed displeasure over the huge sum deposited at the Central Bank of Nigeria (CBN) as statutory deposit by firms.

    The shareholders are also not happy with the National Insurance Commission (NAICOM) over fines imposed on operating firms in the industry for various offences especially failure to meet deadline for submission of  annual accounts and financial reports.

    The shareholders made this known at the 23rd Annual General Meeting (AGM) of Cornerstone Insurance Plc in Lagos.

    The Cornerstone shareholders said it was painful to them to see record of N128million fine paid by the company to NAICOM and other related regulators because of various offences recorded against them.

    One of the shareholders, Akinsonya Solomon,  said the incessant fines heaped on operating firms by the regulators are becoming unbearable observing that virtually all insurance firms in Nigeria have been fined for one offence or the other this year.

    Mr Robert Igwe another shareholder of the company wants the NIA as the umbrella body of insurance underwriters to take up the issue of statutory deposit of the industry lying idle with little or no interest with the CBN to the law makers.

    He posited that the huge amount could yield good interest to the various firms if used in business adding that on the alternative, the CBN should pay interest commensurate to the quantum of money deposited by the various companies.

     

  • STI partners Yudala as official insurer

    Sovereign Trust Insurance (STI) Plc has partnered  Yudala, the largest online and offline retail chain in Africa as the insurer to the organisation, Managing Director of the company, Wale Onaolapo has said.

    He made this known in a statement to reporters in Lagos.

    He said the partnership, like many emerging in the  industry, is seen as a welcome development that will help engender the growth of retail business.

    He explained that as the official Insurer to Yudala in Nigeria for all online transactions and offline purchases in the different outlets spread across the country, the underwriting firm is expected to provide All Risks Insurance Cover to indemnify customers of Yudala in respect of any product purchased from either the online or offline retail platforms.

    He also said that the scope of cover is expected to include damage to and/or Electronic Breakdown of any item so purchased. It is an open-cover policy, which means customers of  Yudala can have their purchased items insured for one year on an on-going basis.

    He said: “After the signing ceremony of the Memorandum of Understanding, both parties acknowledged that the partnership would help engender a great deal of trust and confidence on the part of customers as they will be guaranteed of getting genuine products from the retail chain as well as adequate cover for their assets from a reputable insurance company in the country.

    “STI is particularly delighted to be associated with the Yudala Brand and is also very optimistic that the relationship will be an enduring and rewarding venture for both parties.

    “STI is poised to provide top-notch underwriting services driven by technology to Nigerians both home and abroad. This is a union of two great brands with shared value of an indigenous enterprise operating globally both in outlook and reach.”

    The Chairman of Zinox Technologies and the Brain behind Yudala, Chief Leo Stan Ekeh, has assured prospective shoppers of Yudala that they will be getting real value for their money for whatever product is purchased from any of the Yudala platform.

    “I will like to see a lot of this business partnership as STI and Yudala emanate from our shores from time to time which would help keep alive the entrepreneurship flame in driving the Nigerian economy and beyond.

    “It is indeed a union that I am so much pleased, is seeing the light of day”, he concludes”, he added.

    Aetna Inc. reached a $37-billion deal for Humana Inc. this month. And Woodland Hills insurer Health Net Inc. agreed to be acquired by Medicaid insurer Centene Corp. for $6.8 billion.

    The melding of Anthem and Cigna would create a company with about $115 billion in annual revenue and 53 million members. That would make it the largest U.S. health insurer in terms of membership, ahead of industry leader UnitedHealth Group Inc., which has 46 million members.

    The Aetna-Humana combination would have about 33 million members, rounding out a dominant big three in the health insurance business.

    Antitrust authorities are expected to closely scrutinize this new industry landscape.

    Some health policy experts and consumer advocates have expressed concerns about this increasing consolidation and the prospect of higher premiums.

     

  • Niger Insurance posts N11b gross premium

    Niger Insurance Plc has achieved a 5.95 per cent growth in its gross premium written of N11.06 billion in 2014 as against N10.44 billion recorded in 2013.

    In the same vein, the group profit after tax rose to N690.96 million in 2014 from N627.42 million in 2013 in spite of the challenges in the operating environment.

    A dividend payment of 3.5 kobo per 50 kobo share amounting to N270.88 million has however been approved by the shareholders.

    The company’s Chairman, Bala Zakariyau made this known during the 45th Annual General Meeting (AGM) of the organisation in Sokoto.

    He stated that the management’s ability to cut costs also helped to increase the profit as management expenses reduced by 29.27 percent from N4.68 billion in 2013 to N3.31 billion in 2014.

    He added that the company’s net premium income increased by about 1.45 percent to N9.79 billion in 2014 from N9.65 billion in 2013.

    He said the underwriting firm is increasing equity in business and also improving on its insurance fund as investment income grew by 46 percent to N1.15 billion in 2014 from N790.54 million in 2013.

    He said: “A dividend payment of 3.5 kobo per 50 kobo share amounting to N270.88 million was approved by the shareholders at the yearly meeting.

    “Growth in investment income was due to strict implementation of NAICOM directives on “No Premium No Cover Policy” from January 1, 2014.

    The policy aims to stimulate liquidity within the system by reducing the huge receivables being carried on the statement of financial position of insurance companies.

    “Niger Insurance has been intensifying payment of claims to clients as its claims ratio increased to 37.88 percent in 2014 from 35.72 percent in 2013.Claims expenses in 2014 was N4.19 billion, representing an increase of 12.33 percent compared to N3.72 billion recorded in 2014.”

    Zakariyau added that the company is determined to give more attention to the retail segment of the insurance industry going forward noting that it is less volatile and diversify its investments portfolio, review and revamp product offerings.

    He assured that the organisation would hasten formation of new local and international alliances to further consolidate its position in the industry.