The Nation Newspaper

Category: Insurance

  • Linkage raises authorised share capital to N15b

    Underwriting firm, Linkage Assurance Plc, has secured the nod of its shareholders to increase its authorised share capital from N7.5 billion to N15 billion by the creation of additional 30 billion ordinary shares at 50 kobo each.

    This is to enable the general business insurer meet the new minimum capital requirement set for insurance companies in the industry, and position for bigger ticket risks in the market.

    Directors of the company at an Extra Ordinary General Meeting in Lagos also got the approval of the shareholders to raise additional equity capital up to the maximum limit of the authorised share capital, whether by way of way of special placement or public offer, right issue or other methods or combination of any of them, either locally or internationally and upon such terms and conditions as the directors may deem fit in the interest of the company and subject to the approval of the regulatory authorities.

    Addressing shareholders at the meeting, Chairman of the company, Chief Joshua Fumudoh, said: “The new share capital regime provides unique opportunity for the company to strategically position itself as a key market leader within the insurance industry.”

    Chief Fumudoh, therefore, assured the shareholders, that the board and management would utilise the additional equity capital to aggressively expand and grow the business and ensure consistent returns on investment to shareholders.

    The Managing Director/CEO of the company, Daniel Braie, said  the board has a number of options to recapitalise the company, but assured  that any decision that will be taken at the end of the day will be in the overall interest of the shareholders.

    With nearly N200 billion expected into the industry after the ongoing recapitalisation by underwriters, the sector is hopeful to emerge stronger, contribute reasonably to the economy and also offer good returns on investment (RoI) to investors.

  • NSIA Insurance kicks off campaign

    NSIA Insurance Limited has launched a campaign to further deepen insurance penetration.

    Tagged: No Worries, the campaign was unveiled at a briefing  in Lagos.

    Its Managing Director, Mrs. Ebelechukwu Nwachukwu, said the campaign was expected to sensitise customers and other Nigerians on the benefit of insurance.

    She said the company places high value on integrity and professionalism, which is why the prompt payment of claims is a part of their commitment to customers.

    As a proof to their claims settlement ability, she said over N679 million was made in 2017 and N2.4 billion in claims settlement to their clients last year.

    She stated that the prompt claims payment was in keeping with the commitment to render stellar customer service to clients and in line with their  objectives to pay genuine claims within 48 hours, following the receipt of the signed discharge voucher.

    She said: “We are putting ourselves out there to remind our customers of our commitment to serving them well. We bear in mind their needs and provide tailor-made solutions to suit them.

    ‘’We are known as “The true face of Insurance” because we understand and respond to all aspects of the insurance business. In recent times, NSIA Insurance, in a bid to diversify business, partnered Multichoice on the DSTV Thanks Programme, to reward loyal DSTV subscribers with 10 per cent discount on four identified products which include NSIA Comprehensive Motor Insurance, NSIA Motor Insurance – Third Party Fire & Theft, NSIA Householder Insurance and NSIA Personal Accident Cover.’’

    She continued; “NSIA Insurance also recently announced the successful completion of their 2019 ISO Surveillance Audit by the Standards Organisation of Nigeria (SON), after they were awarded the ISO 9001:2015 Quality Management System Certification in May 2018. This certification was achieved due to the successful implementation of the Quality Management System and priority for customer satisfaction. Next was the announcement of their Travel Insurance product with three main legs: the medical services package, which covers medical expenses for sickness and injuries, emergency medical evacuation and repatriation, repatriation of mortal remains to the home country, convalescence expense and dental treatment due to accident.

    “The Travel Assistance package, which covers terrorism, catastrophe, loss of passport, travel documents and luggage as well as trip cancellation and legal fees.

    “The company prides itself as a provider of a unique Health Insurance policy, which is provided in partnership with Hollard, one of South Africa’s largest independent insurance companies, and Cigna, one of the world’s leading providers of health benefits.”

  • Building directors’ capacity for growth

    By Omobola Tolu-Kusimo

    Directors’ interference in the management of insurance firms by engaging in malpractices or misconduct without minding the impact on the company may soon be reversed, Omobola Tolu-Kusimo reports.

    The responsibility of directors of insurance companies in adhering to corporate governance is key to achieving sustainable growth and development of the business.

    Over the years, attempts at entrenching good corporate governance culture in the sector has not yielded the desired result, despite the enatment of the Corporate Governance Code in 2009 and the Market Conduct Guidelines in 2014 by the National Insurance Commission (NAICOM).

    The primary role of the boards, either in a private or public entity, remains the oversight of management to ensure the corporate goals, vision, mission and values of the entity, are strictly upheld.

    The board is also expected to ensure the financial soundness and well-being of the organisation by monitoring the management, to guarantee effective and efficient deployment of human and capital resources in the benefit of stakeholders.

    The observance of this role has been lacking in some of firms, a development, which has contributed to the challenges of these firms.

    Rather than perform their roles without  interfering in management, the boards abuse the system, by engaging in malpractices and or misconduct without minding the impact on the company. Many times, such firms, become insolvent and unable to meet the primary obligation of claims payment.

    To solve the problem, NAICOM brought together chairmen and chairpersons, managing directors, directors, non-executive directors and executive directors to promote better understanding and appreciation of the  industry and their roles and responsibilities  at capacity building conference with the theme, “Corporate governance: The panacea for sustainable growth and development of insurance business in Nigeria”.

    At the event, the directors said they were aware of the importance of repositioning the industry, promising to reverse the trend.

    Acting Commissioner for Insurance, Mr. Olorundare Sunday Thomas said: ‘’It is imperative for me to remind us that your companies are in the business of insurance primarily to settle genuine claims made by policyholders. In all policy formulations of the board, I am appealing that the prompt settlement of claims be given a high priority. The commission will view seriously any case of late or non-payment of genuine claims.

    ‘’The recapitalisation is on and the reports submitted by the companies on their recapitalisation plans have been good, I can only encourage sustained efforts at early completion of the plans.

    ‘’Meanwhile, the Commission is engaging other relevant regulatory bodies and agencies of government for possible palliatives that will reduce the cost of recapitalisation and the response is looking good.

    ‘’I have no doubt that at the end of this programme, we will be going back home with a better understanding of the sector, our roles as directors and the benefits that will result from effective performance of these roles.’’

    Thomas said the low level of effectiveness of corporate governance oversights in the sector remains one of the major regulatory concern to the Commission.

    ‘’This is for the simple fact that the failure of corporate governance in the past has played a prominent role in the death or distress of most corporate organisations the world over, Nigeria inclusive,’’ he said.

    He stated that the desire of the Commission is to work with stakeholders, including directors to reverse this trend.

    He said: “It is imperative to remind you that your companies are in the business of insurance primarily to settle genuine claims made by policyholders.

    “In all policy formulations of the board I am appealing that the prompt settlement of claims be given a high priority. The Commission will view seriously any case of late or non-payment of genuine claims,” he added.

    The Chairman, FBNInsurance Limited, Mrs Aderele Kehinde, said the programme was  informative.

    She said she initially felt it was not necessary, but was happy that she attended because she found value in it.

    She said: “I have seen a lot of value in attending the conference. There are some things many of us didn’t know or put to mind at a point but reemphasising our responsibilities makes us conscious of the importance of our positions and the responsibility expected of you.

    Leadway Assurance Chairman Gen Martin Luther Agwai (rtd), said: “I am glad that I came because I was not into insurance or finance before coming into the industry. I enjoyed the fact that the discussion was brought to those of us who are learning gradually in the field and I have found a very useful day and I am leaving a happy person.

    “The fact that I know that if something goes wrong while I am the chairman, I can be dragged back to the company by law even when I retire from the company is something that I find enlightening. I know that it is another risky business. But I believe what any director or chairman should be doing is to take calculative risk and he or she will not have any problem.”

    KBL Insurance Director, Mr Simpson Eimiakhena, also said he had listened to experiences not just from the regulator but practitioners. It was very well-intended and the knowledge that was given was good.

    “The conference is like a sensitalisation forum, where directors get to know their responsibility and is not just knowing their responsibility, but to appreciate it and to be able to put the right structure and framework in place. In everything that we do, there is element of risk. but we must be able to mitigate those risk. so it is not just that you are liable or responsible for decisions taken or not, but it is about the fact that as a director, you must be responsible to do the right things. And if you do the right thing I don’t think you have anything to fear.

    “We were told in one of the discussions, it was very clear that you must have good fate. In other words, there must be adequate disclosure in anything that you are involved in. It doesn’t stop any transaction but let it be known that you are involved and part of it. Follow the procedure and processing. So for me, I think it was good,” he said.

  • AXA Mansard partners women

    Women have become an important market for the insurance, pension and the financial services sector, the Head of Business Development at AXA Mansard Pensions Limited, Ms Naomi Aduku has said.

    Aduku, in a statement, said this is why AXA Mansard Pensions partnered  the LagosMums to hold its Sixth Parenting Conference and Exhibition  in Lagos.

    The event has become a popular forum for mothers to meet, network, share experiences, talk about parenting, discuss ways to achieve work – life balance and many more activities.

    She stated that the company was proud to be a part of the event, which encourages engagement of women in various works of life.

    She said a woman, whether as entrepreneurs or heads of household,  make financial decisions more than they used to.

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    According to her, women own one-third of the world’s businesses, and their average income in emerging markets continues to increase. As such, the financial decisions that women need to make in their journey as professionals, entrepreneurs or business women are very vital and should be properly managed at the start through to their retirement.

    In emerging economies like Nigeria, the purchasing power of women is increasing, as well as access to education and higher-level employment. The Woman’s role in the economy is growing as gender differences in labour market participation narrows, she added.

  • AIICO increases share capital to N18b

    To meet the new minimum capital requirement for the industry, AIICO Insurance Plc has received shareholders’nod to increase its authorized share capital from N10 billion to N18 billion.

    The shareholders gave the approval at the Extra-Ordinary General Meeting (EGM) in Lagos.

    Read Also: AIICO Insurance to create 16b new shares

    Its Chairman, Mr. Kundan Sainani, disclosed that AIICO has received the National Insurance Commission’s (NAICOM’s) ‘No Objection’  to its recapitalization plan, which includes a combination of private placement, rights issue and bonus issue.

    Its Managing Director, Mr. Babatunde Fajemirokun explained that the private placement is at an advanced stage with investors.

  • Royal Exchange grosses N14.7b premium

    By Victoria Adenekan

    Royal Exchange Plc generated a Gross Written Premium of N14.7 billion as at December 31, 2018.

    This represents an increase of 15 per cent, compared to the N12.8 billion it made in the previous year.

    The company’s Net Premium Income for the period is N9.1 billion, a 29.7 percent growth over the 2018 figure, while net underwriting profit amounted to N9.73 billion in the financial year under review.

    Underwriting profit hit N3.67 billion in the 2018 financial year, up from N1.05 billion in 2017, while Net Income was N4.35 billion, from the corresponding figure of N2.4billion in 2017.

    An analysis of the results showed that the total assets of the group witnessed a growth of 6.74 percent, from N33.2 billion in 2017 to N35.53 billion as at December 31, 2018.

    Net claims amounted to N3.1billion, an eight percent marginal reduction from the 2017 figure of N3.42billon.

    Royal Exchange Chairman, Mr. Kenny E. Odogwu, said during the company’s Annual General Meeting (AGM) in Lagos, that despite the harsh operating environment, the group was able to deliver a better result against the previous years and that this was achieved through cost optimisation initiatives, innovation and extensive retail market expansion as well as by participating in large-ticket financial transactions.

    Odogwu stated the company envisions a situation where the retail insurance market should contribute between 50 and 60 percent of our revenues, as the retail market is the future of insurance.

    He added that with the approval from the National Insurance Commission to undertake agricultural insurance, the company has entered into strategic alliances with some stakeholders to drive insurance and that soon, revenue would start coming in from the subsector.

  • Allianz Nigeria partners Cars45

    Allianz Nigeria has collaborated with a leading tech-powered automotive trading firm, Cars45 to deepen retail insurance and entrepreneurship opportunities for youths on its  Cars45autopreneur.

    The platform aims to empower  Nigerians through paid referrals using the Cars45autopreneur mobile app. Allianz Nigeria, on the other hand, will provide insurance cover for cars bought on the platform.

    An Executive at Allianz Nigeria, Owolabi Salami, noted that with the unemployment rate at 23.1 per cent and underemployment at 16.6 per cent, there was the need for corporate citizens to offer income-earning opportunities that would be suitable alternatives to formal employment for youths.

    “We want to partner you to increase your income-earning capacity by selling insurance for us when you sell cars,” Owolabi said.

    The Chief Marketing and Strategy Officer, Allianz Nigeria, Walter Bossman, noted that the deal with Cars45 is in tandem with Allianz’ long-term strategy to deepen insurance penetration in African markets through strategic partnerships and contemporary distribution channels.

  • Climate Change: WAICA Re urges more agriculture insurance uptake

    The Group Managing Director, WAICA Reinsurance Corporation, Mr. Abiola Ekundayo, has stressed the need  for  an increase in agriculture insurance uptake by players in the agricultural sector value-chain to cover risks that can lead to low farm yield.

    He said this was necessary with climate change negatively affecting farmers’ productivity across the world, especially, in Africa.

    He spoke at the WAICA Re International Agriculture Insurance Seminar held in Harare, Zimbabwe.

    He noted that though Africa has about 17 per cent of the world’s pastures and arable land, the value of premiums for agricultural insurance in Africa represents less than 0.7 per cent of the world’s total.

    This remarkably low figure, he said, is deplorable when one considers that about 60 per cent of the active population in Africa is working in the agricultural sector and that with the advent of climate change, the risks in agricultural activities are becoming even more frequent and severe.

    For smallholder farmers, he said, agriculture insurance offsets risks associated with weather fluctuations, adding that, risk reduction can make it more likely that a farmer will qualify for credit and thus invest in the tools and resources, such as, seed, fertilizer, labour, among others, needed prior to harvest that would potentially increase crop yields.

    Stating that Agric Insurance provides farmers with the peace of mind required to invest savings into businesses, he added that, this also increases their confidence to engage in contracts with buyers and processors.

    On agricultural micro-insurance, he suggested the development of index insurance, an approach he said, pays out benefits on the basis of a predetermined index, such as, rainfall level, livestock mortality rates, and so on, for loss of assets and investments resulting from weather and catastrophic events, without requiring the traditional services of insurance claims assessors to assess individual losses.

    With the development of new technologies for the management of insurance schemes, such as the adoption of mobile payments, he said, costs have the potential to drop even further.

    As the dynamics regulating claim payments are known to both parties at the onset, index insurance also reduces the information asymmetry between clients and insurers on the risks insured, something that continues to be an issue for classic insurance schemes, he pointed out.

  • How digitalisation can boost insurance

    By Omobola Tolu-Kusimo

    Deploying technology tools is gaining attraction. The reasons for this are not far-fectched. Aside ensuring reduction in cost and optimsising productivity, it also destroys fetters erected by distance. It is, therefore, not surprising that the Chartered Institute of Insurance of Nigeria (CIIN) has urged insurers to embrace digitalisation in their businesses, Omobola Tolu-Kusimo reports

    Technological advancement has taken an unprecedented leap to becoming an integral part of human daily existence.

    The digital era started evolving in the 1980s and presented society with information and technologies that are  transforming businesses across industries, serving customers, including the insurance industry.

    In 2015, PricewaterhouseCoopers had said mobile devices, tablets and smartphones would dominate the insurance sector. This implied that consumer experience, locally or globally, would be influenced by digital technology.

    Yet, the Nigerian insurance industry has been lagging in technological advancement. Operators and the regulator have been trying to catch up with their counterparts, especially in the financial services sector, before they lose majority of their businesses.

    The industry has been wobbling with an insurance penetration rate of about 0.3 per cent.

    Worried about the slow growth,  practitioners, who gathered in Abeokuta, Ogun State for the Insurance Professionals’ Forum, organised by Chartered Insurance Institute of Nigeria (CIIN) pondered over the prospects and challenges of digitalisation  to the industry and proffered solutions to it.

    They deliberated on how they would leverage technology to simplify data analytics. This year’s theme was “The digital era: Implications for insurance professionals’’.

    CIIN President, Mr Eddie Efekoha said the digital era was here and that Artificial Intelligence is playing a major role in its evolution. More organisations were embracing the idea of a microchip processing multiple functions, he said.

    The future, which Artificial Intelligence promises for insurance, he said, is a series of touchless processes from premium collection through to the entire claims process.

    He stated that big data is around us, ready to be harnessed.

    He participants to work on how they would leverage on technology to simplify data analytics to make pricing of insurable risks more accurate, enhance self-servicing of customers through interactive websites, tweak sales practices in line with customer needs and wants in order to improve profitability, cost efficiency, and maximise performance.

    He said: “It is a shame that Africa’s biggest economy has an insurance penetration rate of about 0.3 per cent. Much as the ongoing recapitalisation is important, of equal importance is the need for market development. The digital era is here and Artificial Intelligence is playing a major role in its evolution.  More organisations are embracing the idea of a single microchip processing multiple functions.

    “Importantly, Artificial Intelligence has never been less expensive or inaccessible. The question that arises, however, is: what is the role of the modern day insurance professional as this evolution plays out and what will be his when this evolution attains its full cycle? How will he or she stay relevant in an artificial intelligence driven society? As you ponder on these questions, let me restate that any professional who wants to remain relevant must see the opportunities in the threats posed by this digital era.

    “As we embrace digital, we should not overlook the dangers posed by cybercrime around us. Cybercrime isn’t a myth, it is real. The National Information Technology Development Agency (NITDA) stated that in 2017, Nigeria lost $500 million to cyber-attacks, a figure up by $50 million from the year before. Globally, these numbers are even bigger and it is projected that damage related to cyber-crime will hit $6trillion annually by 2021.

    The Acting Commissioner, National Insurance Commission (NAICOM), Mr Sunday Thomas, warned that their failure to key into the 21st century demand for digital business services might spell doom for the industry.

    He pointed out that in the 21st Century, digital technology has integrated the world and its systems into “one global village”, where transactions were on our finger tips. ‘’Our smart phones perform wonderful functions, including almost all financial transactions.

    These, he said, were changes that affect all strata of their personal activities and businesses and bigger than the phase of the advancement are the implications which are already affecting us positively or negatively depending on our answers to the questions raised earlier.

    He noted that insurers must understand that digitalisation has taken precedence in people’s affairs and the implication would be detrimental, if the industry failed to fix that gap that it would create in the business between them and their customers.

    He said the operators must integrate into the robust financial circle, for insurance to take its rightful place in the economy.

    “The industry is indeed in a position to embark on a digital journey that can have real impact on ourselves and customers while exploiting existing assets,” he asid.

    He enjoined the practitioners to understand the task ahead and resolve to make good the gaps that are created by technology in our businesses.

  • LASACO to raise N10b capital

    In line with the recapitalisation requirement of the National Insurance Commission, shareholders of LASACO Insurance Plc have approved a raise of N10 billion capital through special/private placement for the firm.

    This was at its Annual General Meeting (AGM) in Lagos.

    With the nod, the firm hopes to raise more capital through the issuance of up to 9,250,000,000 ordinary shares of N0.50 each at N1.20 per share by way of special/private placement.

    The shareholders also gave the company the permission to reconstruct its existing ordinary shares of 7,334,344 on one new share for every four previously held.

    Other approval granted by the shareholders were that N2,749,279,000 representing the surplus nominal value of the reconstructed shares be transferred into the share reserve account and form part of the shareholders’ funds of the company and that the reconstructed 1,833,586,000 ordinary shares of 50k each, be revalued in accordance with the ratio of reconstruction, subject to appropriate regulatory consent and be listed on the Nigerian Stock Exchange (NSE).

    Read Also: Lasaco seeks N11.1b new equity funds in private placement

    The Managing Director of the firm, Mr. Segun Balogun, said he was optimistic that they would raise N10 billion because the firm has been paying dividend to shareholders.

    He said: “I am very optimistic because LASACO is doing very well by paying good dividend so I am sure investors will be interested in buying the shares. We are returning good dividend, more than 10 per cent dividend payout. We are looking for almost N10 billion and we will to continue as a composite company.

    “The next line of action for us is to ensure that we are fully recapitalised so that we will continue to be in business. We also want to ensure that the premium income generation by LASACO continues to increase in good leaps just like we witness in 2018 and 2017. The growth increased by almost 50 per cent and that is the improvement that we will continue to work on.’’