The Nation Newspaper

Category: Insurance

  • Leadway unveils 50th Anniversary logo

    Leadway unveils 50th Anniversary logo

     Omobola Tolu-Kusimo

     

     

    LEADWAY Assurance Company Limited has unveiled the anniversary logo commemorating its 50 years of providing  service to Nigerians.

    The ceremony, toned down to align with social distancing conditions, kicked off a series of commemorative events to acknowledge stakeholders who have contributed to its success.

    The event at the company’s Corporate Office in Iponri, Surulere, Lagos was led by the Managing Director, Mr. Tunde Hassan-Odukale; Executive Director, General Insurance, Ms. Adetola Adegbayi; former Managing Director, Mr. Oye Hassan-Odukale and other company executives.

    In a message to stakeholders entitled, ’50 and Fluid, A time for gratitude’, Mr. Tunde Hassan-Odukale said the occasion of our 50th Anniversary is a time for reflection and gratitude. Reflection on the strides, successes, and challenges past; gratitude for the journey so far and the opportunities of the future.

    Read Also: Leadway Assurance pays N33.8b claims

    “Ours started with the dream of a man who wanted to serve. He knew that to give life to this vision, he would need to work with other people of like minds. ..Ever the community man and humanist, our founder, my father, Sir Hassan Olusola Odukale, believed and firmly practiced the saying …”if you want to go fast, go it alone; but, if you want to go far, go with others.

    “The story today will therefore not be complete without the mention of those who took hold of his dream, started the journey with him, kept the faith and sowed their sweat to create the company we see today. Acknowledging them first, I use this opportunity to appreciate every stakeholder that has helped to make Leadway a household name and a respected brand,” he said.

    “We appreciate the support over the years and look forward to more in the years to come. You make what we do outstanding and we acknowledge your immense support over the years. As excited as we are to celebrate our accomplishment in the last 50 years, we do recognize that there is more work to be done to achieve our ambitious goals for Leadway.  I have no doubt that with the relentless pursuit of customer-centricity, leveraging innovation and digital technology, the next 50 years will be better than the past,” he added.

  • ‘Micro, Takaful Insurance contribute one per cent to industry’

    ‘Micro, Takaful Insurance contribute one per cent to industry’

     Omobola Tolu-Kusimo

     

     

    MICRO and Takaful Insurance contribute less than one per cent of the premium generated in the industry, the Head, Takaful Insurance, National Insurance Commission (NAICOM), Mr Zubairu Darazo, has said.

    Darazo, who made this known at a lecture entitled: “Insurance development in Nigeria: The financial inclusion option’, said  takaful and micro insurance would take care of the insurance needs of low-income earners.

    He stated that lack of understanding of the model of the insurance among insurance firms was a bane for the low penetration.

    He said the commission is making progress, as it has registered about four takaful and micro insurance firms each and would register more when necessary.

    He said: “The registration was to achieve the 40 per cent financial inclusion target in the insurance industry. As at December 2019, the premium paid for takaful insurance stood at just N2 billion while the micro insurance was N350 million. Claims paid under the takaful insurance stood at for the N540 million while that of micro insurance was N75 million. However, the commission has planned programmes to promote these categories of insurance.

    Read Also: Micro pension contributors hit 53,827

    “If you compare the market share of takaful and micro insurance and the premium generation for the industry, it is still less than one per cent. We have a lot of potentials in these insurance,’’ he added.

    He listed the registered takaful insurance firms to include Cornerstone, Salam Takaful Insurance Limited, Noor Takaful Nigeria and Jaiz Takaful Plc.

    Takaful entails members of a group based on mutual agreement, contributing money into a pool of funds to be utilised in  guaranteeing members against loss or damage.

     

  • Market ranks 72nd worldwide

    Market ranks 72nd worldwide

     Omobola Tolu-Kusimo

     

    THE industry market ranks 72nd in the world based on the industry’s gross premium income for 2017, up two points from 74th  the previous year, it has shown.

    The National Insurance Commission (NAICOM) said the report was based on a United Kingdom (U.K.)-based AXCO Market Ranking.

    According to the report on NAICOM’s Statistical Market, 2018, this is remarkable considering that the economy had just come out of recession.

    The report stated that the market in 2018 grew at about 14.46 percent, recording a gross premium income of about N426 billion as against the production of N372 billion made in 2017.

    The report further read: “Non-life sector accounted for about 57.58 per cent, while the Life sector in its steady upward trajectory, accounted for 42.42 per cent of the gross premium of the period. The re growth of the life sector is largely driven by the surge in premiums from the annuity business which, though not entirely novel, has newfound momentum in recent times due to increasing demand for it by newly-retired persons, and the attraction of new regulations.

    “The percentage contribution of the Life sector gross premium grew from a 38.20 percent in 2016, to the present position in 2018. The claims experience of the sector was similarly robust, growing 35.26 per cent from N186 billion recorded in 2017 to N252 billion in 2018. This positive development can be attributed to a growing awareness among policyholders and industry confidence with regards claims settlement. Non-Life claims constituted about 47.77 percent of the gross claims recorded during the period, a 13point drop from the 61.11 percent recorded in 2017.

    “The Life segment on the other hand improved by about 12 points to peak at N 252 billion, making up about 52.23 per cent of the gross claims reported in the same period. A similar experience was reported in the case of paid or actual claims settlement during the year. This is a direct reflection of the consistent regulatory measures of the Commission to raise public and consumer awareness on matters of claims and claims settlement, a major determinant to industry confidence.”

    It further stated that industry asset size continued its steady growth since 2014 (from about N828billion) to peak at aboutN1.3 trillion in 2018, a 54 per cent growth. The industry total assets grew at 13 per cent to N1.3 trillion in 2018 from a N1.1 trillion in 2017.

    “This growth rate is commendable despite its still relatively small size to other financial sub sectors in the economy. It is expected that recapitalisation and other regulatory measures will spur further, much needed growth of the industry in coming years. The Commission, in exercise of its regulatory powers, intervened in some ailing insurance companies to ensure financial stability of the institutions.’’

    Read Also: NAICOM: MDRI panacea for sector’s growth

    Meanwhile, the Nigeria Insurers Association (NIA) said the industry grew at a faster pace than the economy in 2019, even though penetration remain very Low.

    NIA Director-General, Mrs Yetunde Ilori said the stakeholders continued to intensify effort at improving penetration and creating the needed awareness toward achieving financial inclusion of those that are at the bottom of the pyramid.

    She noted that National Insurance Commission (NAICOM), in its efforts to ensure soundness and profitability of insurance business, also continued to release circulars; guidelines and market conduct to support the nature, scale and complexity of the businesses conducted by underwriters.

    “To build the capacity of insurance companies, the industry regulator introduced the new risk-based capitalisation template known as the Tier Based Minimum Solvency CapitaL (TBMSC), which was later suspended as its requirements might affect growth in the sector since it permits fragmentation.

    “The State Insurance Provider (SIP) policy was also introduced to serve as agency of the State Government to be licensed by NAICOM as a means of diversifying insurance distribution in the country.  This policy was later cancelled due to its attendant controversy. Notwithstanding the moderate performance of the sector, the industry is yet to convert the huge opportunities that abounds. We do hope that in the coming years, the industry will strive to improve capital in order to increase its retention,” she added.

  • Law Union & Rock introduces product for high networth clients

    Law Union and Rock Insurance has designed a combined insurance product for wealthy members of society.

    The product, named HNI (High Net-Worth Individual), branded as LUR Hynet, takes into consideration the needs of these clients, such as exclusivity, confidentiality, and flexibility.

    According to the company, this category of people who have more than one house, usually don’t remember to insure the one they do not live in.

    Read Also: ‘Insurance market offers potential despite headwinds’

     

    Speaking on the product, Executive Director of Law Union and Rock Mr Supo Sogelola said: “What makes the product unique is that it is comprehensive and helps protect you from risks you previously were not covering or aware of. For example, many HNIs have more than one house, but they usually insure the one they live in. Should there be a fire in the other house they own and that house is uninsured, the client would suffer greatly from this event.

    “The product covers all forms of general insurance risk a client may encounter or may be exposed to. This includes Motor, Home, Personal Accident and Travel insurance.

    ‘’The product is designed to cater for not just the needs of the insured, but that of the family, domestic staff and physical assets. This means that the insured can cover his insurance needs and that of his family, his driver, cook, gateman, as well as cover other buildings he owns.”

  • ‘Insurance market offers potential despite headwinds’

    Our Reporter

     

    Nigeria’s oil and gas reserves, the country’s young and growing population as well as being  Africa’s largest economy are potential for the insurance sector, AM Best has said.

    In a Best’s Market Segment Report: “Nigeria’s Insurance Market Offers Significant Potential Despite Headwinds”, AM Best noted that due to COVID-19, National Insurance Commission had agreed to delay plans to strengthen capitalisation and limit the premium flowing out of the country.

    It said insurance penetration – market gross written premium (GWP) as a percentage of gross domestic product (GDP) – is extremely low, highlighting the market’s long-term growth opportunities.

    The international credit rating agency said Nigeria’s failure to deliver on that potential historically had been due in part to the volatility of real GDP growth in the country, coupled with the sporadic enforcement of mandatory retail insurance lines.

    It noted that robust and timely statistics to support insurers’ knowledge and understanding of trends, are scarce. While the official statistics published by the insurance market regulator covers financial information up to December 2018, for this report, AM Best also made use of year-end financial information from the 15 largest insurers (which account for approximately four fifths of the market’s GWP).

    AM Best expects that one of the immediate effects of the lockdown will likely be a positive impact on claims frequency for motor writers.

    Read Also: ‘How to boost diversity, inclusion in insurance’

     

    However, any positive impact is expected to be offset by the effect of the projected economic contraction on other lines of business, as well as increased volatility in financial markets. This may adversely impact the insurance sector’s profitability and solvency.

     

    On recapitalisation and changing regulatory requirements, AM Best said in 2007, NAICOM raised its minimum capital requirements by over 1,000 per cent and while this led to a widespread recapitalisation, a steady increase in insurers’ underwriting leverage had been observed.

    Regulatory data shows that GWP growth has outpaced capital generation since 2014. This trend continued for 2019, according to AM Best’s analysis, with a projected ratio of GWP to capital and surplus of approximately 115 per cent, up from 75 per cent in 2014.

    To strengthen capitalisation of the market and to limit premium flowing out of the country, NAICOM’s 2018 circular outlined plans to increase capital for (re)insurers. The proposed changes were met with opposition, culminating in a ruling that the proposed regulation was not compliant with the Insurance Act of 2003. Therefore, no changes were made, the agency said.

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  • Royal announces N14.21b Gross Written Premium

    Royal announces N14.21b Gross Written Premium

    By Omobola Tolu-Kusimo

     

    Royal Exchange Company has generated a Gross Written Premium of N14.21 billion as at December 31, 2019.

    Its net premium income is N8.72 billion, while net underwriting income is N9.19 billion, after addition of fees and commission income, which is N479.6 million.

    The result further showed that its total assets was N32.10 billion, with net claims paid to policyholders amounting to N3.17 billion,

    Chairman of Board of Directors Mr. Kenny Odogwu briefed shareholders at the company’s 51st Annual General Meeting (AGM), held virtually in Lagos.

    The company, with interest in general insurance, life, finance, health care and micro finance, is taking advantage of synergies as a financial conglomerate in its drive for growth.

    Alhaji Rufai Mohammed, a director at Royal Exchange, who stood in for the chairman, said the the management had grown and stabilised its  operations.

    “Royal Exchange will continue to stay abreast with many of the initiatives it has put in place to grow its market share and attain market leadership position.”

    He said the group was streamlining major components of its business, service delivery, processes and operations to deliver superior returns to shareholders.

    Speaking on recapitalisation for the two subsidiaries, the director noted that the efforts for the general company, REGIC, are almost concluded, with another investor and plans to ensure recapitalisation is completed before end of this quarter.

    ‘’For the Life Company, we are on course to secure the requisite financing required to make the company meet the required deadline as stated by the National Insurance Commission (NAICOM),’’ he said.

     

     

     

  • NAICOM to digitalise for improved service delivery, others

    NAICOM to digitalise for improved service delivery, others

    The insurance regulator, National Insurance Commission (NAICOM), is reforming into an an end-to-end automation of its processes. OMOBOLA TOLU-KUSIMO writes on how the initiative will impact the industry.

     

    National Insurance Commission (NAICOM) has, for the last 10 years, been trying to digitalise its operations and connect all  operators to its portal. But this has not been easy.

    Operators and observers have complained the commission is over burdened with monitoring and supervising an industry with 59 insurance companies, 500 brokers,  10,000 agents, 34 loss adjusters, 2,000 policyholders and others.

    But last week, the commission announced it had completed a real-time digital platform for better efficiency and effectiveness in its regulatory services to become a globally compliant entity.

    NAICOM said this enhancement will lead to increased revenue, cost reduction, improved productivity efficient delivery, and others.

    It said data collection and analysis will get a boost, with improved resource management as well as enhanced stakeholder experience and satisfaction.

    Deputy Director of Information Technology at NAICOM Abiodun Aribike, in a paper: ‘’Digital Transformation of NAICOM’s Processes and Procedures” at the 2020 NAICOM Seminar for Insurance Journalists, at Uyo in Akwa Ibom State, noted that the drivers of digital transformation in the commission include management’s vision for regulatory effectiveness and transformation of work processes.

    Read Also: NAICOM: MDRI panacea for sector’s growth

     

    He listed others as impact of volatility, uncertainty, complexity, ambiguity (VUCA) on insurance; need to change, innovate, improve and adapt to present realities; changing stakeholders needs and preferences, rapid advances in information technology and emerging technologies; increasing data volumes and need to aggregate data spread across different desktops, laptops and files to a central location; market development and growth opportunities; changing demographics of the commission’s workforce; need for accurate statistics; and eliminating incidences of fake insurance.

    Aribike said: “In line with NAICOM’s commitment to use information technology to drive the supervision, regulation and governance of insurance business, it has developed the NAICOM portal to provide a direct interface with the industry to ensure greater accountability and transparency.

    “The NAICOM portal is a digital platform that is designed to drive the core business processes of insurance industry with the benefits of service efficiency with quick turnaround time; eradication of fake insurance policies; improved public trust and confidence in insurance; deepen insurance penetration; provide access to statistical data; streamlined approval processes for registration and renewal of licences, etc.

    Continuing, he noted: “The digital platform will provide a single point of contact between NAICOM and the industry. The portal comprises the insurance policy system, the licensing system and the regulatory and financial returns system. The insurance policy system captures policies issued in Nigeria and the licensing system automates the core business processes of registration/renewal of licences, new product, Approval In Principle (AIP) & attestation approvals. The regulatory and financial returns system is still at the conception phase”.

  • ‘50% of insurance on digital platforms

    By Omobola Tolu-Kusimo

     

    FIFTY per cent of insurance are done on digital platforms,the Managing Director/Chief Executive Officer, Anchor Insurance Company Limited, Mr. Ebose Augustine, has said.

    Augustine, who spoke with reporters in Lagos, said he hoped more businesses would be generated by the industry through e-platforms in the next three years.

    He said the pandemic has forced operators to reinvent its processes and customer experience as well as how to meet public expectations.

    He maintained that the industry is leveraging social media platforms to drive sales, adding that the impact of the pandemic has made them regain human capital, Information Communication Telecommunication (ICT) and our processes.

    On the reduction of insurance contribution to the nation’s Gross Domestic Product (GDP) by 29 per cent, he said: “Before the pandemic, insurance awareness in Nigeria has been very low compared to other advanced economy and that is why the Nigerian Insurers Association (NIA) is sensitising the public, creating awareness to deepen insurance penetration. The pandemic affected every business, so, we expect that insurance will also be affected.

    “Part of the initiative is what our regulator is doing, to upscale the compulsory insurance so that the members of the public that are not buying insurance will buy at all levels.This will impact positively on the GDP. All stakeholders in the industry are also putting measures in place to deepen penetration, sensitise the public and create awareness.’’

  • ‘How to boost diversity, inclusion in insurance’

    ‘How to boost diversity, inclusion in insurance’

    By Omobola Tolu-Kusimo

     

    Equal opportunities,  pay, empowerment, advocacy and commitment by firms’ leadership to nurture females in the insurance sector are panaceas to growth, experts have said.

    The experts spoke at the Dive in festival in Nigeria virtual event themed “Promoting Inclusion & Diversity in the insurance industry for a quantum leap”.

    They examine some challenges faced by young female professionals in the sector and new possibilities that will spur participants to break boundaries in risk management and insurance.

    Speakers included the Executive Director, General Insurance Business Division, Leadway Assurance Company Limited, Adetola Adegbayi; and co-founder African Family Firms, Nike Anani and Esther Awoniyi.

    Ms Adegbayi said: “We need to look at not just women but also men who are disadvantaged, physically challenged people when addressing diversity and inclusion.

    “It doesn’t matter whether you are formally educated or not, as people what matters is how we make use of our abilities to deliver. There is the need to celebrate the difference in togetherness and balancing equality with equity.’’

    Anani said: “Women stand to lose out the most when businesses fail to move to the next generation. Insurance has however turned out to be a risk management tool to protect women’s interest and other threatening issues that might ensue from lack of trans-generational wealth transfer.”

    Executive Director, Tangerine Life Insurance, Ibitunde Balogun said insurance firms should adopt strategies that will encourage more youths to be interested in applying for insurance jobs.

    “The sector  falls into the least paying jobs in the financial service sector and this itself discourages youths from pursuing a career in this line. Insurance leaders need to make insurance more attractive to the new age. The new generation wants good renumeration for work done, work life balance and flexibility in their jobs,” he added.

    Esther Awoniyi spoke on  on the diversity and inclusion in trans-generational wealth and family business.

     

  • Firms hurry to meet recapitalisation deadline

    Firms hurry to meet recapitalisation deadline

    Companies are mopping to recapitalise, Omobola Tolu-Kusimo report

     

    THE National Insurance Commission (NAICOM) on May 20, last year gave the 58 insurance firms a 13-month ultimatum to recapitalise or lose their licences by last June 30.

    It raised the minimum paid-up share capital of a life insurance company from N2 billion to N8 billion; non-life insurance from N3 billion to N10 billion and composite insurance from N5 billion to N18 billion and re-insurance companies were asked to raise their capital base from N10 billion to N20 billion.

    The deadline for compliance was initially extended to December 31, following appeals by operators. But the  COVID-19 pandemic compelled the regulator to further segment and extend the deadline to December 31, this year and September 2021.

    Meanwhile, the commission is set to restrict insurance companies that will fail to satisfy the required minimum paid-up capital by the end of December 31 on the scope of businesses they will transact.

    To avoid the sanction, many companies are working to meet up the recapitalisation.

    Findings have, however, shown that majority of the insurance companies are mopping up their activities meet the recapitalisation mandate.

    Chairman, Lasaco Assurance Plc, Mrs Aderinola Disu on said following the approval of shareholders at the Extraordinary General Meeting in 2018, the company engaged the experts to actualise the recapitalisation plans before the deadline.

    She stated that the deadline has been further extended to September 2021 for full compliance and this December for compliance with phase one of the recapitalisation and their goal is to have completed this phase before the end of next month.

    Chairman, Sunu Assurance Plc, Mr Kyari Abba Bukar said the company has obtained the approvals of NAICOM, FRCN, and CAC for the completion of the share reconstruction exercise and conversion of the Bond debt to equity.

    Similarly, the Federal High Court, Lagos Division has sanctioned the company’s application for the confirmation of the reduction of the issued share capital of the company as required by Section 106 of CAMA.

    He noted that by December 31, this year, the company would have satisfied the required minimum paid-up capital of N5 billion.

    In addition, he said efforts would be made to achieve all they needed to do before the deadline.

    The Managing Director/ Chief Executive Officer, Capital Express Assurance, Mrs Adebola Odukale, also affirmed that the company had been working hard to meet the recapitalisation requirements.