The Nation Newspaper

Category: Insurance

  • Capital Express records N2.8b premium

    Capital Express records N2.8b premium

    Capital Express Assurance Limited recorded about N2.8 billion premium in the 2012 financial year, its Chairman, Otunba Babatunde Adenuga, has said

    Adenuga, who stated this during the firm’s 12th Annual General Meeting held in Lagos over the weekend, said the firm achieved 79 per cent growth in investment income in the financial period under review despite the harsh economic environment.

    He assured that the 2013 financial year would be better in terms of premium drive and increased performance.

    He said: “Capital Express has been strategically positioned to face the challenges of the new year and respond to the ever changing economic environment.

    “A series of deliberate actions necessary to turn around the fortunes of its foreign subsidiaries and reposition them for better performance will be a key part of its strategic thrust in the coming year. We will continue to focus on optimal resource deployment, empowerment of our employees, utmost professionalism, high values and ethical standards, and sound governance and risk management practices.”

    The chairman also said the former group managing director and chief executive officer of the firm, Mr. Anthony Aletor retired in 2012 but remained on the board as a non-executive director.

    He said to ensure the firm continues to benefit from his wealth of experience, the board resolved and created the position of vice chairman and appointed Aletor to this role.

    He noted that he was to assist the board in its oversight functions and support the managementin in this capacity.

  • Onaolapo is Insurance Man of the Year

    • Stanbic IBTC bags PFA of the Year

    Managing Director, Sovereign Trust Insurance Plc (STI) Mr. Wale Onaolapo has been named the Insurance Man of the Year for 2013 at the second edition of InspenOnline Media Award.

    His firm also bagged the CSR Company of the Year.

    Mansad, however, bagged the Insurance Company of the Year Award, while IBTC Pension was named the Pension Fund Administrator of the Year.

    Also, Consolidated Hallmark Insurance Plc bagged the Award of the CSR Company of the year, Chartered Insurance Institute of Nigeria bagged Best Professional Institute Award, the Managing Director, RiskGuard Africa Limited,Yemi Soladoye bagged the Professional Excellence Award, while Leadway Assurance Limited, won the Corporate Board of the Year Award.

    The Editor, InspenOnline Media, Chuks Udo Okonta, said the awards were given in recognition of the contributions of the chief executives of underwriting firms, brokerage firms and other allied institutions in the insurance industry towards the growth and advancement of the industry.

    He said the Corporate Social Responsibility Award is given in appreciation of the various contributions of underwriting companies, pension organisations and other financial institutions in providing intervention geared at enhancing and improving the quality of life and infrastructure in the various operating environments in the country.

    He explained that members of the public voted for the awardees via the social media.

    While appreciating the honour bestowed on him, Onaolapo thanked the organisers of the Nigerian Insurance and Pension Awards for finding him worthy.

    He promised to continue in his stride to ensure Insurance business in the country earns its rightful place of pride in the comity of financial institutions in the country and beyond.

    He said the company will not rest on its oars in upholding professionalism and strict adherence to corporate governance while maintaining the position of a responsible corporate entity to further project the industry.

    The Award ceremony was attended by a crop of professionals in the industry in the country. Chief Sunny Nwosu, President of the Independent Shareholders Association of Nigeria, ISAN, was the Chairman of the Occasion.

    Others in attendance included the President of the Nigerian Council of Registered Insurance Brokers, NCRIB, Mr. Ayodapo Shoderu, the past President of the Council and Winner of the 2012 edition, Barrister (Lady) Olaide Osijo and the Managing Director of Riskguard Africa, Chief Yemi Soladoye, who delivered the keynote address at the occasion. Representatives of the Chartered Insurance Institute of Nigeria, CIIN, and the Nigerian Insurers Association, NIA also graced the event.

  • Life annuitants rise by 22% in Q3

    Life annuitants rise by 22% in Q3

    There has been an increased awareness on Life Annuity plan as an option for pension payments, the National Pension commission (PenCom) has said.

    This is evidenced by 22 per cent increase in the number of retirees on this plan from 4,688 in the 2013 second quarter to 5,717 in the third quarter.

    This Commission made this known in its 2013 third quarter report.

    It showed that premium worth N5,381 million was approved for payment to insurance firms for 1,029 retirees in return for an average monthly pensions amounting to N17.78 million.

    Meanwhile, the Commission recorded a growth in its second quarter.

    A total of 4,688 retirees and received a total of 1,081 requests for annuity retirement plan.

    According to the Commission, all the requests were approved, which brought the total number of retirees to 4,688.

    Also, a total premium of N4,885 million was approved for payment to insurance firms for 1,081 retirees in return for monthly payments amounting to N48.07 million.

  • ‘Life annuity best option for retirees, pensioners’

    The Head, LASACO Life Assurance Limited Annuity Unit, Mrs. Fawatade Toyin has appealed to retirees and pensioners in the country to embrace Life Annuity as their retirement income option.

    Fawatade who spoke with The Nation Newspaper on the challenges of life annuity business during a retiree forum held in Lagos believes inadequate awareness on life annuity product and apathy to insurance in the past are reasons for setback in selling the product.

    She highlighted the need for an active campaign and rigorous marketing strategy by insurance operators in the insurance industry to create awareness in the minds of the public.

    She said: “It now depends on our marketing strategy and the way we are able to convince the retirees and pensioners. The performance of the company is also vital in convincing them to buy into it. But the awareness is ongoing compared to what we have in the past.

    “We are making them to understand how the product works. We tell them that under the Pension Reform Act 2004, annuity is being guaranteed for 10 years and if they outlive the 10 years, they will continue to enjoy your money until death.”

    “If paraventure death occurs within 10 years, the remain of the proceed will be paid to the main beneficiary, the beneficiary will be given the balance of their money unlike program withdrawal where their payment stops at death”

    She further said that part of their challenge as insurers is the Pension Fund Administrators (PFAs)’s who sell the alternative option, ‘Program Withdrawal’.

    “They have stood as a stumbling block in actualising the annuity option. They don’t  want the money to leave their company because they too are using the money for investment purpose. So they have to be using their own marketing strategy to retain the money the retiree are suppose to get to buy annuity.

  • Costs of natural disasters surge to $69b in China

    BEIJING (Reuters) – Natural disasters including droughts, floods and earthquakes cost China 421 billion yuan ($69 billion) in 2013, official data showed on Monday, nearly double the total in the previous year.

    China has always been prone to natural disasters but a changing climate is causing more extreme weather, which hits food production, threatens scarce water resources and damages energy security, according to the government.

    Data released by the National Statistics Bureau showed flooding and mudslides cost China 188 billion yuan in 2013, 20 billion more than in the previous year.

    Damage from droughts rose nearly fourfold to 90 billion yuan, while snowfall, freezes and ocean-related costs totalled more than 42 billion yuan.

    Earthquakes, primarily one in Sichuan province in April that killed 186 people, added nearly 100 billion yuan to the costs.

     

     

    “In recent years, China has seen a combination of floods and droughts simultaneously, with the rain belt moving north past the Yangtze River,” Zhu Congwen, a researcher with the China Academy of Meteorological Sciences told Reuters, speaking in a personal capacity.

    Northern China is seeing more droughts while typhoons are arriving earlier, wetlands drying up and sea levels rising, the government said in a report last year.

    Some regions in China, such as the southern province of Yunnan, are in their third year of crippling droughts.

    In August last year, an extended heatwave across six provinces in central China meant crops from 900,000 hectares (2.2 million acres) of farmland failed and 13 million people had no easy access to drinking water.

    In the same month, record rain – in some areas the most heavy in more than 100 years – and storms killed more than 100 people and caused huge floods in the northeast and northwest.

    Last year’s disasters were not as bad as 2010, when record flooding killed more than 1,000 people and led to 15 million being forced from their homes.

    But the trend is for an increasing impact from wild weather.

    In December, the government said it was poorly prepared to tackle the impact of climate change and released a plan identifying main areas for improvement in a bid to limit damage.

    Infrastructure, agriculture, water resources, coastal zones, forests and human health were listed as priorities.

    China is the world’s biggest emitter of greenhouse gases, which scientists say cause climate change, but has pledged to cut its emissions to 40-45 per cent per unit of gross domestic product by 2020 compared with 2005 levels.

  • Kenya: Reinsurers increase rates for terrorism cover

    Reinsurers have increased their rates for terrorism cover by 10per cent to 40per cent, The Standard Digital News reported.

    Joseph Kyungu, executive director of Heritage Insurance Co. Ltd., said the frequent terror attacks in Kenya, and in particular the attack on the Westgate mall in Nairobi prompted the rise in the rates.

    Mr. Kyungu said that last year the premium levels written were more than 120 billion Kenyan shillings ($1.38 billion).

  • Lagos Fire Service kicks over non-payment of 0.25% revenue

    Lagos Fire Service kicks over non-payment of 0.25% revenue

    • Insurers fault law

    The Lagos State Fire Service has accused underwriters of not paying the mandatory 0.25 per cent revenue to the Nigeria Fire Service by way of Fire Service Maintenance Fund (FSMF) as required by the Insurance Act.

    The state’s Fire Service Director, Rasaq Fadipe, who spoke at the just concluded member’s evening of the Nigerian Council of Registered Insurance Brokers in Lagos, said the money which is meant to be paid quarterly by insurers, is meant to motivate firemen to be effective in firefighting.

    Section 65 (4) specifies that 0.25 per cent of the premium collected is to be paid into a Fire Services Maintenance Fund to be administered and disbursed by NAICOM for the purpose of providing grants or procurement of equipment to institutions engaged in firefighting services in the country.

    This section emanated from Section 64, which makes mandatory the insurance of buildings under construction where more than two floors are envisaged. The insurance must cover the liability of the owner of the building in respect of the negligence of his servants, agents or consultant.

    It is also followed by Section 65 which makes the insurance of public building mandatory. Public buildings are defined in Section 65(2) of the Act.

    Fadipe urge insurers to comply with the law adding that their members need to be encouraged.

    Managing Director, Niger Insurance Plc, Mr. Kola Adedeji who delivered a paper on public buildings, said insurers have too many commission and levies to pay to different organisations and this has been affecting their businesses.

    Adedeji stressed that while the fire service business is not something that should be toiled with, insurance business has to be profitable for them to be able to pay.

    He said: “Insurance business profits on law of large number. But with the way the business is now, if we pay .25 per cent to fire service, one per cent to our regulator, NAICOM, and 15 per cent to intermediaries like brokers, loss adjusters among others, then the premium we generate from the insuring public will be finished”.

    A broker and member of the NCRIB, Barrister Rotimi Edu added that the law on how to remit the .25 per cent due to the fire service is very big because it did not specifically state if the fund is for the fire service.

  • NAICOM urged to reduce N350m microinsurance minimum capital

    NAICOM urged to reduce N350m microinsurance minimum capital

    Insurance expert and Managing Director, RiskGuard Africa Nigeria Limited, Mr Yemi Soladoye has urged the National Insurance Commission (NAICOM) to reduce the N350 million, N200 million and N150 million minimum paid-up share capital for intending composite, General and life microinsurance operators.

    Soladoye, who is also a consultant to NAICOM on Market Development Restructuring Initiative (MDRI), said this will ensure that the objective of microinsurance initiative in the country is achieved.

    He spoke while presenting a paper at the 2013 Nigerian Insurance and Pension Award organised by Inspenonline Media in Lagos.

    He disclosed that as at February 2014, about seven commercial underwriters are providing Microinsurance products in Nigeria while some six new applications are said to have been received by NAICOM from intending standalone operators.

    He said the challenge of the microinsurance initiative is how it will be run in a manner that it does go the way that conventional insurance.

    He said: “Microinsurance is already un-locked in Nigeria through the commendable efforts of NAICOM and German Development Corporation (GIZ) and the next stage is to keep the door ajar. The challenge now is how to leave it unlocked. The Nigerian Council of Registered Insurance Brokers (NCRIB) and the Nigeria Insurers Association (NIA) are very crucial in unlocking the business.

    “Also, the N350 million required capital is on the high side. This is a major challenge and if we do not approach it in the right manner, microinsurance business will go the way of conventional insurance”.

    He also said that existing weak brokers and microinsurance bankers should be encouraged to take up the business.

    “In any case, the minimum number of Microinsurance providers required in Nigeria by 2020 is 774 i.e. one Per Local Government area. At the current rate, the regulators will have to recognize the following non-tradition operators at least as distribution channels if it truly wants to provide access to Microinsurance in Nigeria.

    “The Minimum Capital Requirement (MCR) to operate an insurance company in Nigeria is the highest in Africa. This capital increase has however not translated into geometrical premium growth since 1961 when the first MCR was stipulated as £25,000 (N3.875 million). Whereas, the industry MCR had increased by 6,250 per cent between 1976 and 2011, the Gross Premium Income had only increased by 1,230 per cent. The net result is always the death of old players and birth of new players who will later become old players. This is what puts a question mark on the huge amount of N350 million specified as the MCR for Micro insurance. A National Microinsurance Goals and Strategy Statement together with National Business Plan and Regulatory Framework should immediately be put in place by the regulator.

    “How many offices does the regulator expect an operator to open with N350 million? Are we expecting AjoseAdeogunMicroinsurance Companies? Prado Jeep and Ipad MDs, Is Microinsurance going to be the landing pad, for weak commercial underwriters. We suggest use of 5-tier operational model based on Capital Requirement to secure widest coverage of Microinsurance in Nigeria. For instance, National to remain at N350m going by Insurance Act 2003, Regional to be N90million going by 1997 Ins Act, State to be 40million going by 1997 Ins Act, LG to be N10million going by 1991 Ins Act and Unit to be N5million going by 1991 Ins Act. The unit and regional approach will reduce cost of doing business. Lean structure, modest office, appropriate location must all be specified per unit of office outlet by the regulator”, he said.

    He however noted that he believes NAICOM is a listening regulator and they will look into the challenge.

    Guideline on microinsurance earlier released by NAICOM states that any Microinsurerintending to commence a specialized Microinsurance business shall have aminimum paid-up share capital of N150 million to operate LifeMicroinsurance Business, N200 million for GeneralMicroinsuranceBusiness and N350 million to operate the Composite Microinsurance Business.

    It read: “The Commission may increase from time to time the amount of minimum paid up share capital as stated above. A specialized Microinsurershall maintain with the Central Bank of Nigeria a statutory deposit of 10 per cent of the minimum capital requirement and shall maintain adequate and valid reinsurance arrangements.

    “Micro-insurance products are specially designed for the low income earners. It requires them to pay a little premium, which in return, offers them cover in times of losses or other unforeseen occurrences.

    “The regulatory horizon was broadened and, therefore, geared towa

    In November last year, NAICOM opened up the microinsurance business to non-conventional insurers like multi-purpose Cooperative Societies, Microfinance Banks, Faith-Based Organization (FBOs), Mutual and Community Based Organization (MCBOs), Non-Governmental Organizations (NGOs), Governments and MDAs, The NHIS, Civil Society Organizations (CSO), Telcos, Utilities, Brokers and Agents. The Commission has since then began issuing of licenses to intending operators.

  • Guinea Insurance restrategises

    •Makes N50m profit

    Guinea Insurance Plc is restrategising to tap from from the enormous opportunities in the energy sector, its Chairman, Sir Emeka Offor has said.

    He spoke at the firm’s Annual General Meeting (AGM) in Lagos.

    He announced that the firm’s gross premium income hit N1.2 billion in its 2012 financial year, from N889 million the previous year.

    The underwriting firm, however, posted a profit after tax of N50 million while its net operating income grew by 191 per cent from a loss of N192 million to N176 million profit.

    Claims settlement increased by 53 per cent while impairment of outstanding premiums decreased by 81 per cent.

    He said: “Guinea is refocusing itself to ensure that it fully taps into the opportunities that are prevalent in the power and energy sector that will present itself in 2014 in line with the forecasts.’’

    He said the year was tough given the persistent global meltdown and its attendant consequences on purchasing power and businesses, especially given that insurance income is directly correlated to the level of economic activity.

    He added that the adoption of the International Financial Reporting Standards (IFRS) by the industry brought new challenges in the reporting format of financials.

    He said: “The new reporting format necessitated the use of actuaries for a fair valuation of the company’s assets and liabilities. There was a great challenge in engaging the services of actuary’s good refute as they are not many in this field of technical expertise. All these compliance changes, resulted in the long delay in the preparation, review and submission of the final financial report to seek the national Insurance Commission (NAICOM) approval before holding the AGM.

    “Also, while I expect the country’s operating environment to remain tough, opportunities abound with the relative peace in the Niger-Delta region. This will attract Foreign Direct Investment into the economy thus boosting insurance premiums.’’

  • ‘Why public buildings insurance policy is failing’

    • NCRIB warns underwriters against unethical practices

    Despite efforts by the National Insurance Commission (NAICOM) to implement the insurance on public buildings under the Insurance Act of 2003, not much has been achieved in the implementation or enforcement of this provision, Managing Director, Niger Insurance Plc, Mr Kola Adedeji has said.

    Adedeji made this known while delivering a paper at the Nigerian Council of Registered Insurance Brokers (NCRIB) Members Evening hosted by Niger Insurance in Lagos.

    He stated that the launching of the Market Development and Restructuring Initiative (MDRI), which covers insurance of public building, did not yield the desired result.

    To this end, the Niger chief said a multi-dimensional approach would be necessary to tackle the challenges.

    He said that the regulator’s strategy was not working, confirmed the opinion of experts on compulsory insurance that it should be restricted to areas it is needed.

    He stressed that problems associated with the insurance of public buildings cannot be divorced from that of the industry.

    He recalled that NAICOM in one of its documents listed poor compliance culture, inadequate legislative and legal framework, poor public perception of NAICOM as a regulator and public resistance to insurance as threats to the industry.

    He said: “The Insurance Act of 2003 made provisions for a number of compulsory insurances among which is the insurance of public buildings.

    “Section 65 of the said Act states every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood. The Act defines public buildings as tenement house, hostel and building occupied by a tenant, lodger or licensee. It also includes eateries, restaurants, internet cafes, shopping malls etc”.

    He added that sanction for non-compliance with this provision is stated as a fine of N100, 000 and/or imprisonment of one year.

    He said insurance of public buildings is meant to provide an avenue for compensation to third parties and users of damaged properties, adding that all compulsory insurances, it provides a socio-economic function in the society.

    He further said: “Rather than have new compulsory insurances, such as for buildings under construction, occupier’s liability, and insurances of public buildings lumped under the Insurance Act, it would have been more pragmatic to have a separate Act of parliament for each and every one of them.

    “Each of these Acts would then provide relevant enforcement agencies though the benefits on the long run accrue to the insurance industry in form of increasing   patronage and growth. In the case of the insurance of public buildings, all states physical planning authorities should be empowered to enforce the provisions of the Act.”

    Meanwhile, the President, Nigerian Council of Registered Insurance Brokers (NCRIB) Ayodapo Shoderu,  has criticised underwriters for unethical practices.

    He said the sub-sector is endangered by the activities of some underwriters who subvert brokers on their accounts.

    He noted that what such unethical underwriters do is to go back to woo clients brought in contact with them by brokers, even when the account being covered by the company was still running.

    Shoderu said this practice is not only unwholesome, but capable of snuffing life out of brokers, with its grave implications on the national economy.

    He said the council has taken the issue up with the National Insurance Commission (NAICOM) and the Nigerian Insurers Association (NIA).

    Shoderu called on brokers to disassociate themselves from those who have been soliciting membership for a parallel broking body, stressing that the NCRIB is the only body saddled with the registration of insurance brokers.