Category: Insurance

Newly licensed reinsurance company, FBS Reinsurance has hit the ground running with a premium income of N7.906 billion or $19million in its first year of operation.

The company also made a profit before tax of N505.47 million (or $1.2million).

This Chairman, Alhaji Bala Zakariyau, at the company’s first Annual General Meeting (AGM) for its financial year end 2021.

Zakariyau said the company has just completed first year of operation with a good performance despite the harsh economic realities caused by the pandemic.

The Chief Executive Officer, Mr. Fola Daniel, added that the company closed with assets in excess of N15.805 billion from about N10 billion at commencement.

He explained that the company was licensed on November 25, 2020 by the National insurance Commission (NAICOM) and commenced operations on January 1, last year.

Daniel, a former Commissioner for Insurance, stated that the company services align with customer needs in the oil and gas space, agriculture life and non-life and retakaful business.

He said: “The company is poised through its service offerings to lead growth in the local content development of reinsurance business through treaty and facultative arrangement that will expand the frontiers of the insurance spend retention in Nigeria and lead to reduction in insurance premium exports in the near future.

“The cumulative experience of the company’s promoters and its executive management spanned over 100 years. Their expertise and network are expected to leverage the company to a pan Alican reinsurance platform in the next  years.”

Speaking on their strategy, Daniel stated that the reinsurance market is a brown field with growth drivers embedded in the market weakness arising from low level of treaty and facultative capacity, sparse reinsurance market capacity low insurance penetration measured as the ratio of gross written premium to Gross Domestic Product (GDP) and low insurance density. Key factors affecting the growth level of gross written premium have been identified to include the low level of awareness trust and apathy for insurance products by a large segment of the populace low level of actuarial expertise and poor technology drive.

“These factors have left the industry struggling to premium income from the commercial sector insurances. Our company sets to ride on the market opportunities that will deliver superior return and shareholders value. Reinsurance capacity offerings will continue to be environmental sensitive in the oil and gas value chain agriculture and other emerging risks, such as cyber-crime and terrorism.”

On operating efficiency, he said the retail insurance sector has remained intensely competitive, resulting in significant downward pricing pressure and high operating cost sequent to dependence on intermediaries like brokers as source of business limited use of direct distribution channel like online or mobile platforms. The consequences have continued to show in the industry wide weighted average combined ratio from about 96 per cent in 2012 108 per cent in 2018 while out-liners posted 161 per cent in some very high challenging cases, according to AM Best Rating report 2019.

“The effect of the price pressure on primary insurers impacts negatively on reinsurance premium earnings against liabilities. The above reality has combined to shape drive for optimality in operating efficiency as FBSRe in its deal structure and cost of doing business.”

The Minister of Finance, Budget and Planning, Mrs.  Zainab Shamsuna Ahmed, has described the contribution of insurance to the Gross Domestic Product (GDP) of 0.88 per cent for last year as very low.

She spoke during the inauguration of the National Insurance Commission (NAICOM) portal at the weekend in Abuja.

She said this meant a low insurance sector development contribution to the economy and an indication that there were opportunities for growth in the market.

She congratulated the commission on achieving the feat of leveraging technology and data for the transformation of its processes; drive its regulatory and supervisory functions, increase operational efficiency and improve its corporate outcomes.

The minister charged NAICOM and the operators to develop new innovative products based on data and customer preferences and introduction of new channels of distribution beyond the traditional channels to reach new segments of the market.

She said: “I understand that the portal will serve as a platform for interconnecting industry stakeholders to support real-time aggregation of data, automate its business processes and provide access to statistical data of the sector. The inauguration of the portal should serve as a springboard for industry wide adoption of technology and innovation for efficient and effective service delivery, ease of transacting business and customer experience and satisfaction.

“The industry should provide quick turnaround time on their services, grant access to information when required without any inhibitions and maintain effective real-time communication with its customers. Dwindling government revenue profile demands that the Commission must look into ways of increasing its revenue through the use of technology and the portal in particular.

“I urge the Commission to ensure the portal is connected to other government databases like the National Identity Management Commission (NIMC) NIN Database, Nigeria Immigration Service (NIS) Passport Database, Nigeria Integrated Customs Information system, FRSC’s National Vehicle Identification System, the National Vehicle Registry, State Licensing Databases, among others, to provide value-added services to  insurance industry stakeholders and enhance revenue generation. In addition, the NAICOM portal must also serve as the central database and sole repository of Insurance Data connected to government databases in the country.”

She pointed out the poor public perception and lack of trust and confidence in the industry.

“Meanwhile, you will agree with me that the unsatisfactory response to settlement of claims by underwriters had greatly contributed to the prevailing poor public perception and lack of trust and confidence in the insurance Industry. Indeed, prompt claims payment is the best advertisement for the industry, therefore all genuine claims that have been duly verified and due process followed, should be paid promptly,” she said.

She added that there was also the need for cooperation with other agencies of government to enforce compulsory insurances in the country.

“Stakeholders in the industry must consciously and intentionally spread the reach of insurance from the major cities and few states to other regions of the country especially the rural areas. Low penetration in the retail end of the market must also be addressed through vigorous drive of inclusive Insurance like micro insurance and takaful. In addition, deliberate attention must be given to the low insurance literacy and education in the country.

“I want to encourage the industry to adopt new and disruptive technologies like mobile technology, cloud computing, Artificial intelligence, Blockchain, Data Analytics and Internet of things in driving and supporting its business. On this premise, I commend the Commission for being in the forefront of this and for incepting initiatives in this direction, including Guidelines for Web Aggregators and Regulatory Sandbox, introduction of BIMA Lab Insurtech Accelerator Programme.

“However, I believe there is a need for regulatory framework for Insurtech companies to guide and supervise their operation without inhibiting their innovation. The Commission should look into this. I believe with the inauguration of the NAICOM portal, the long overdue digital transformation of the insurance industry has begun with the attendant effect of increased penetration, reduction in the numbers of fake insurances, efficient service delivery and improving public trust in insurance,” she noted.

The Commissioner for Insurance, NAICOM, Sunday Thomas, said the portal is one of the initiatives of the commission being pursued to deepen the insurance market and increase the penetration to the level that is consistent with the nation’s economy.

He recalled that the commission in July 2009, embarked on a comprehensive computerisation tagged Project e-regulation that was meant to transform its procedures and the conduct of its regulatory responsibilities by providing a robust, world-class ICT Infrastructure to help implement an automated business processes internally and for industry wide supervision via an integrated platform.

“Prior to this development, the processing of applications required that applicants physically drop off their applications at the Commission with the attendant challenges of delays in processing times, wasted manpower hours due to back-and-forth in application processing as well as ineffective application tracking system. With the completion of the portal there will be process efficiency and faster processing time as applications and supporting documents are submitted online, applicant’s account is updated with the status of the application as it progresses and there is effective Real-time communication between NAICOM and the applicant

“The portal is made up of four systems, which include Policy, Licensing, Complaints Management and Regulatory Returns and Financial Analysis. The project is funded by Africa-Re Foundation would improve efficiency and effectiveness in supervisory and regulatory oversight of the insurance industry.

“It is expected that the challenges of poor insurance penetration, public trust and confidence in insurance, and inadequate real-time statistical data of the insurance industry will be resolved through the efficient deployment of the portal. Also, the direct interface with the industry provided by the portal will ensure greater accountability and transparency. The digital platform will provide a single point of contact between NAICOM and the industry’” he added.

The Nigeria Maritime Administration and Safety Agency (NIMASA) has invested over N150billion to end the War Risk Insurance on Nigeria-bound cargoes, it was learnt.

The cost of the contract awarded by NIMASA for Deep Blue Project,  according to the agency, was $195 million with 10 per cent management fee and other auxillary experiences made by the agency.

War risk insurance, covers damage due to acts of war, including invasion, insurrection, rebellion and hijacking. Some policies also cover damage due to weapons of mass destruction. It is used in the shipping and aviation industries.

It has two components: War Risk Liability, which covers people and items inside the craft and is calculated based on the indemnity amount; and War Risk Hull, which covers the craft itself and is calculated based on the value of the craft.

The premium varies based on the expected stability of the countries to which the vessel will travel, the war risk phenomenon, which was only known to countries with high rate of piracy such as Somalia, also found its way into Nigeria following massive involvement of youths in militancy in the Niger Delta.

According to the Oceans Beyond Piracy’s 2020 report, the total cost of war risk area premiums incurred by Nigeria-bound ships transiting the Gulf was $55.5 million in 2020 alone, and 35 per cent of ships transiting the area also carried additional kidnap and ransom insurance totalling $100.7 million.

The measure taken by the apex maritime agency, findings have shown, has led to the drastic fall in  piracy incidence in the waters and the Gulf of Guinea in the last two-quarters  which operators said, calls for celebration.

NIMASA, it was gathered, was able to achieve the fleet, based on its deployment of the Integrated National Security and Waterways Protection Infrastructure, popularly known as the Deep Blue Project by the Director-General of the apex maritime regulatory agency, Dr Bashir Jamoh.

Speaking with reporters on the sidelines of the just-concluded fifth plenary of the Gulf of Guinea (GoG) Maritime Collaboration Forum(MCF) in Abuja, an elated Jamoh expressed happiness over the removal of the War Risk Insurance on the cargoes, calling on Nigerians and the international community to continue to support the agency in its drive to make the nation’s territorial waters and the Gulf of Guinea save for shipping and maritime business.

Jamoh said the achievements recorded in maritime safety were based on the on the huge amount invested by the Federal Government through the agency on maritime architecture and the partnership between NIMASA, the Nigerian Navy and other regional bodies.

His words: “No one can easily forget the frequent reports of attacks on ships and the kidnapping of seafarers in the Gulf of Guinea in 2019 and 2020 when they reached their peak and the attendant negative economic effects on the sea-borne trade in the region.

“But today, the IMB has not only affirmed that piracy is at a 28-year all-time lowest in the region, Nigeria, which once seemed the worst culprit has been taken off its Red List even as we celebrate almost two-quarters of zero attacks in 2022.

“While it is important to recognise success so far made, the future must however be the focus,” Jamoh added

Before NIMASA invested the huge amount, a senior official of the Federal Ministry of Transportation  (FMoT), who craved anonymity, said: “Insecurity got so bad in the region before the deployment of the deep blue project that global insurance firm Beazley offered “Gulf of Guinea Piracy Plus,” a bespoke insurance plan for maritime crew travelling through the area. NIMASA would have invested over N150billion before we can celebrate almost two-quarters of zero attacks on vessels this year (in 2022).

The plan, according to the senior official of the ministry, “provides compensation for illegal vessel seizures and crew kidnappings even in the absence of ransom demands. It tracks insured vessels on a 24-hour basis, but because the risks are so high, it limits claims to $25 million’’.

A spokesman for Beazley had said the premiums for this coverage were decided on a case-by-case; however, because the risks are so great, Nigerians paid a lot then.

The Nigeria Police Force (NPF) is seeking a licence to establish a police insurance company, the Nigeria Police Insurance Company (NPIC) from the National Insurance Commission (NAICOM), The Nation has learnt.

It believes this would help to  manage police insurance policies.

Deputy Director/Head of Corporate Affairs of NAICOM, Rasaq Salami, confirmed this in a telephone conversation.

He said the Commission  was  looking into the proposal and that the outcome would inform its decision.

He stated that what the Force needs is a business plan which they have presented to the commission.

He said: “There are requirements and if the police meet it, they will get the license. They have the right to seek for license.”

The Inspector-General of Police, (IGP) Usman Alkali Baba, while kicking off a three-day workshop for Police Insurance Desk Officers drawn from the 36 State Commands, and the Federal Capital Territory, said he approved the establishment of the insurance firm.

Baba restated the commitment of the Force to enhanced welfare of police officers through robust insurance policies geared towards efficiency, dedication, and improved conditions of service.

He stated that the Nigeria Police Force Insurance Unit, established in May 1992, cater to the welfare of police personnel who are either retired or have sustained injuries in the line of duty, and relatives of deceased police personnel.

He said the workshop is one of the major steps towards repositioning the unit for the attainment of its welfare mandate.

The IGP commended the Force Insurance Officer, ACP Uzairu Abdullahi, for his foresight which has been instrumental in the repositioning of the unit.

He presented cheques to families of 40 deceased police officers, who lost their lives in the line of duty, amounting to N183.29 million.

The IGP, however, assured  members of the Force that with  efforts were being made to reposition the Force Insurance Section, there were days ahead for his men.

Linkage Assurance Plc has recorded 16 per cent year-on-year (YoY) growth in Gross Written Premium (GWP) for the first quarter ended on December 31, 2022 to N4.61 billion, from N3.98 billion in the same period last year, the Managing Director/Chief Executive Officer, Mr. Daniel Braie has said.

Braie, in a statement from the company, noted that its audited result for period showed an underwriting profit of N193 million, a turnaround performance compared to N480 million loss as at Q1 2021.

He attributed the result to improvement in core business on the backdrop of healthy business underwriting decisions, reinsurance optimisation and efficient claims management process

Profit Before Tax, according to him, stood at N157 million in the period under review, compared to N950 million loss before tax in Q1 2021.

He stated that the company’s total Asset rose to N42.0 billion in Q1 2022 from N38.7 billion in full year 2021, representing nine per cent YoY growth, just as total equity stood at N25.3 billion, a one per cent YoY growth, compared to N 25.1 billion in FY 2021.

He said: “The business witnessed a tremendous growth in investment income through efficient and effective allocation of cash flows and investment portfolios, which served as a boost to the bottom line. The company is well positioned to provide sustainable insurance solutions to the varying needs of the market through its strong capital base, innovative products, and digital platforms.

“Our strategy is to consistently grow our revenue and deliver strong returns and excellent customer experience, while leveraging on technology, strategic alliances, and capabilities to provide world-class insurance and risk management solutions.”

Two key insurance policies used in more developed nations have been introduced to Ghana’s market.

They are Bankers Blanket Bonds and Cyber Insurance. The former is a risk insurance policy aimed at protecting banks against losses, while the latter protects policy-takers against  cybercrimes and other Information Technology (IT)-related losses.

The new products were introduced  at a training in Accra.

The training was organised by FBS Reinsurance Limited, an Abuja-based reinsurance firm that has part-Ghanaian shareholding and is active in the Ghana’s insurance market.

The training was organised to stimulate the Ghana’s insurance market and redirect risks toward FBS for risk-sharing through reinsurance cover.

Resource persons from FBS Re and by MNK Re of London, a member of Lloyds Insurance, anchored the event.

The organisers were led by Shola Ajibade and Gbolahan Taru, director, Operations/Senior Manager, FBS Re; as well as Victor Akinsanya, director Africa, MNK Re; Steve Kyeremanten, the Accra-based Chief Operating Officer, FBS Re; and Oluwatayo Morebise, manager, FBS Re.

Presentations on BBBs and electronic crime were delivered by the Managing Director, MNK, Manaj Kumar and Underwriter, MNK Re, Ekaansh Verma.

There were also presentations on cyber insurance by Luke Hamlin of MNK Re’s Business Development department.

Kyeremanten recalled that during the Ghana’s banking industry reforms, the government paid out billions of cedis in borrowed funds to depositors in 11 banks which had to be liquidated  for severe illiquidity challenges.

“Part of the losses which had to be funded by the government through external loans could have been absorbed by the insurance market through the payment of BBB claims to insured banks in Ghana,” Kyeremanten said, urging the Bank of Ghana to enforce the purchase of BBBs by banks which it regulates.

The programme was attended by 35  executives. Ten virtual participants also joined  the training.

Besides, there also senior executives from Fidelity Bank and Consolidated Bank Ghana.

Rhe President, Nigerian Council of Registered Insurance Brokers (NCRIB) Rotimi Edu, has implored practitioners to participate in the forthcoming election.

Edu spoke at the April edition of the NCRIB Members’ Evening. He said staying aloof would amount to leaving their destiny for others to decide on.

He said there was no doubt that  Nigeria is predominated by political activities ahead of next general election.

He said: “The nation is in its pre-election era, a season where each political party elects its candidates for next year general election. It is not unlikely that this year would be intense with political activities, with its adverse effect on governing and governance.

“It is apposite to place on record that the political terrain would once again elect leaders who would determine the common destiny of our nation for another period of four years, either good or bad.

“I need not belabour you with details of my insinuation, but I am persuaded beyond reasonable doubt that you understand that when we stay aloof, we leave our common destiny to be decided by others,” he said.

He enjoined Nigerians that are qualified to vote and voted for to participate in the electoral process that determines those who will govern us in the coming dispensation.

FBN Insurance Ltd has recorded N38.6billion gross premium between 2013 and 2021 financial year, the Managing Director, Mr. Val Ojumah has said.

He spoke during the send off of the company’s Chairperson, Mrs. Adenrele Kehinde after joining the board since 2013.

Ojumah said the company, considered as a fringe player at inception in 2010 has risen to become one of the top two life insurers in the country.

He said: “Mrs. Kehinde has contributed tremendously to the positive growth of the company since her appointment as Chairperson in 2013. Under her watch, the company recorded a strong and sustainable financial performance with an increase in gross premium over the years summarised as an increase from N3.9 billion in 2013 when she joined the Board to N38.6billion as of December 2021.

“The profit before tax also grew by 35 per cent from N0.52billion as of 2013 to N7.5 billion recorded in year-end 2021. This positive growth saw the company evolve from a bottom-ranked life insurer/fringe player at Inception to a significant-top two life insurer by gross premium written as of 2020 and has fulfilled and continues to fulfill its strategic aspiration of becoming the most profitable life insurer.

“We are keen to attain uncontested leadership status in the life insurance subsector while we aggressively ramp up the growth of our general insurance business. Our role in this industry is not to follow the competition, but to exceed our expectations. To break our records; to ensure that our positive impact on our customers and shareholders is greater this year than the last,” he noted.

Leadway Assurance has recorded 31 per cent premium income growth from N53.65 billion in 2020 to N70.1 billion last year, leading to a 27 per cent rise in underwriting income.

The increase is hinged on the improvement in the annuity market following the lifting of lockdown and improvement in the economy post-COVID19 pandemic.

The Managing Director/Chief Executive Officer, Mr. Tunde Hassan-Odukale, made this known at company’s 50th Annual General Meeting (AGM).

He stated that the company’s claims expenses for 2021 showed a 10 per cent increase from N43.5 billion in 2020 to N48 billion relative to the previous year.

Shareholder’s fund, according to him, also recorded 18.8 per cent increase from N67.8 billion in 2020 to N80.6 billion last year, while total asset stood at N500.2 billion.