The Nation Newspaper

Category: Insurance

  • Standard Alliance crisis deepens

    Standard Alliance Insurance Plc is unable to fulfill its obligation of claims payment, The Nation can authoritatively report.

    This is going by the company’s 2017 Financial Auditor’s Report which drew the attention of the public to the shortfall of N1.477 billion in assets cover in the financial statements.

    The auditor’s report indicated that the company was not able to generate adequate liquid assets to cover the policy holders’ funds.

    The  auditors, BDO Professional Services (Chartered Accountants) with offices at ADOL House, Plot 15, CIPM Avenue, Central Business District, Alausa, Ikeja, Lagos, said the implication of the company not being able to generate adequate liquid assets to cover the policy holders’ funds, is that the company will not be able to pay claims to policy holders who are the insured, or the public.

    The Nation gathered that  presently, the company is unable to pay claims to many of its policyholders, neither is it able to payback both principal and interest of matured savings’ polices.

    It was also learnt that the embattled company is still marketing products to unsuspecting Nigerians, despite not being able to pay backlog of claims.

    One of the clients of the company, with policy number (withheld)  said: “I contributed N354,000 with N5900 monthly contribution. I am meant to receive N404,823.93. This means that I have just N50823.94 as interest.

    “After several months that the policy matured and I didn’t hear from them, I went to their headquarters in Lekki and asked them to pay me, but they refused to up till date.”

    Investigation also showed that the company is not able to pay brokers, nor for reinsurance and has been owing its staff many months of salaries.

    The Nation learnt that the company has been struggling with financial losses, huge management expenses, over-bloated share structure and huge fines for infractions, among others.

    The auditor in the 2017 financials said: “Without qualifying our opinion, we draw attention to the shortfall of N1.477 billion in assets cover in note 53 to the financial statements indicating that the company was not able to generate adequate liquid assets to cover the policy holders’ funds.

    “Interpretation: Policy holders are the insured (the public). It means the company has less financial assets to cover the premium received from policy holders”.

    The underwriter has for four years, that is, 2012; 2013; 2014 and 2016 recorded losses, while its management expenses soared. Last year, some staff of the firm who were not comfortable with the management decisions resigned, thereafter, the firm retrenched some more staff.

    The danger signal is the 2017 financials where their assets cover fall short of policy holders funds.

    According to the auditor, the company is also yet to get approval for its 2018 account.

    The crisis of the company which started in 2014 has snowballed into a major dilema leading the regulatory authority, National Insurance Commission (NAICOM) to conduct a forensic audit on the company to determine its status.

    Following the intervention of the NAICOM, the Managing Director was asked to resign. While the commission is yet to disclose its findings, observers have however called on the commission to reveal the forensic result.

    Few days ago, the Nigerian Stock Exchange (NSE) placed cautionary red alert on the company, having failed to comply fully with the comprehensive listing and corporate governance standards at the stock market.

    A regulatory report obtained at the weekend flagged the company with warning codes.

    A review of the report showed that the deficient companies, including Standard Alliance were generally in three broad categories; companies with recurring multiple deficiencies, companies that failed to submit their financial statements within stipulated timeline and companies with unhealthy concentration of shares in the hands of major investors.

    Under the rules of the NSE and global stock market practices, all the infractions are regarded as fundamental infractions as they impede market’s key concepts of full disclosure, liquidity and efficient price discovery. All the infractions could lead to compulsory delisting of the stocks, if not remedied.

    The Exchange said the flagging of the company was in line with the commitment of the Exchange to global best practices and investor’ protection.

    An observer who spoke under the condition of anonymity faulted NAICOM, saying the Commission should not allow companies that are unable to meet their contractual obligations to continue insurance business.

    Some Chief Executive Officers in the industry have also complained that companies that are unable to meet their obligations to pay claims should not be allowed to remain in business.

    They said that such few bad eggs among them are destroying the image of the industry, thereby making it difficult for insurance business to grow in the country.

    The Managing Director, Richard  Ododo did not return The Nation inquisitions on the issues and has not made efforts to pay the aggrieved client.  Efforts to reach NAICOM spokesperson,  Rasaaq Salami as at press time also proved abortive.

  • NAIC advises farmers on new flood alert

    The Management of Nigerian Agricultural Insurance Corporation (NAIC), has drawn the attention of Nigerian farmers to the ‘Red Flood Alert’ issued by the Nigerian Hydrological Services Agency (NHISA) with respect to some states of the Federation.

    In a statement by Mrs. Folashade Joseph, the Managing Director of the Corporation, said she underscored the need for farmers to keep abreast of the impact of the heavy rains which is expected to peak between the months of August and October, 2019.

    She advised all farmers, especially those covered by the NAIC Insurance to strictly adhere to best agricultural practices, as they have already been educated by the Corporation during various farmer’s sensitisation programmes on how to maintain sound house-keeping on their insured projects, thereby closing gaps of risk occurrence.

    Mrs. Joseph reminded the farmers that NAIC was specifically set up to indemnify farmers that insured their farms with the Corporation and that given the nationwide spread of NAIC branches which are located in the 36 states of the Federation including the FCT, it is wise for every investor across the agricultural value chain to take a NAIC cover.  NAIC ploughs farmers back to prosperity.

  • AIICO gets Executive Director

    The Board of Directors of AIICO Insurance Plc has appointed Mr. Olusola Ajayi as Executive Director, its Head, Strategic Marketing & Communications Department, Segun Olalandu, announced in Lagos.

    In a statement, he said it follows the approval of the National Insurance Commission (NAICOM).

    Olusola is an experienced business leader with over fifteen years’ leadership positions in management consulting and insurance in Nigeria and the United Kingdom. He joined AIICO in 2009 as head of the Business Strategy and Transformation teams.

    In 2013, ‘Sola assumed leadership of the retail life insurance business, and has led the transformation of the agency business, by deploying cutting-edge solutions and enabling capabilities which has resulted in significant growth in the company’s annual premiums and asset under management (AUM).

    Prior to joining AIICO, he worked at the prestigious consulting firm Accenture (Lagos) in the Financial Services market unit, before joining Deloitte Consulting (London, UK). As a business consultant in both firms, he supported/led business transformation initiatives in Strategy, Process Optimisation and Technology Deployments.

    In this new position, he will oversee the group retail division, with a mandate to drive growth across the group retail businesses and retaining AIICO as an industry leader.

    Mr. Olusola currently serves as Chairman of the Board of AIICO Multishield Limited, the Group’s Health Maintenance Organisation (HMO). He holds an MBA from INSEAD and obtained his first degree in Chemical Engineering from the University of Lagos. Sola is a certified Project Manager as well as a Senior Member of the Chartered Insurance Institute of Nigeria.

  • Recap: NAICOM seeks palliatives from NSE, others

    Ahead the recapitalisation of the insurance companies, the National Insurance Commission (NAICOM) has started engaging with stakeholders to ensure a hitch-free exercise, reports Omobola Tolu-Kusimo.

    The National Insurance Commission (NAICOM) is engaging other relevant regulatory bodies and agencies of government in the financial services sector for palliatives that will reduce the cost of recapitalisation on companies, the Acting Commissioner for Insurance, Mr. Sunday Thomas, has said.

    Thomas, who spoke with reporters, said the response from the relevant regulatory bodies and agencies, which include the Nigerian Stock Exchange (NSE), was good.

    He said the exercise was going on smoothly and that the Commission would do all that is necessary to make it a success.

    He said insurance firms have submitted their recapitalisation plans and it has been good.

    He urged sustained efforts by the firms at earlier completion of the plans.

    He expressed satisfaction that at the end of the exercise, the industry would have been transformed.

    He reiterated that with a contribution by the industry to the nation’s Gross Domestic Product (GDP) at less than one per cent, it has underperformed its potential, especially when compared with other sectors in the financial services industry.

    He said: “In the last few years, the insurance industry has witnessed series of changes owing to reforms embarked upon by NAICOM. These reforms include financial reporting, No Premium, No Cover, Corporate Governance Code, Risk Based Supervision, Information Communication Technology advancement, Financial Inclusion, Claims Settlement, Market Conduct, Expansion of Distribution Channels, Recapitalisation with all aimed at building confidence, trust and enhancing our market value and profitability.

    “The Commission shall continue to introduce new reforms and initiatives in line with international best practices in our march towards achieving the full potential of the industry. I believe that once we can successfully navigate this corner, we could be on our way to entrenching a financially solid, vibrant, viable and active insurance market that would bring about not only an increase in penetration but a substantial increase in the industry’s contribution to GDP.

    “They will also simulate accumulation of long-term funds for infrastructural financing, job creation, and an improved Return on Investment.

    “It is long overdue that we make changes in the right direction. Successful economies are characterised by a strong investment culture of which the insurance industry plays a vital role. So we literally need to re-energise the insurance industry and commence playing our key roles in boosting and growing the sector.’’

  • NSIA Insurance announces ISO 9001:2015 recertification

    NSIA Insurance has announced the successful completion of its 2019 ISO Surveillance Audit by the Standards Organisation of Nigeria (SON).

    Head of Internal Audit and Quality Coordinator at NSIA Insurance, Udo Okeke in her statement to reporters, said this year’s surveillance audit was conducted in the month of May across five of the 10 NSIA Insurance locations within the country.

    According to her, due to the consistency in compliance to the ISO Standards and the excellent quality of service provided to clients in the locations visited, the company and all its branches were recommended for continued certification.

    She stated that the company was awarded the ISO 9001:2015 Quality Management System Certification in May 2018.

    She said: “This certification was achieved due to the successful implementation of the Quality Management System and priority for customer satisfaction. This has ensured that all processes within the organisation are standardised to meet best practices.

    “It is worthy to note that this certification aligns with NSIA Insurance’s drive for excellence.  This is an exciting milestone for us as it speaks to one of our core values – Professionalism. We are optimistic that this recertification will improve client satisfaction and perception of our business by stakeholders”.

    ISO 9001:2015 is the latest and most advanced International Standard for Quality Management Systems. The prompt adoption of this standard by NSIA Insurance lends credence to their commitment to quality in all of their business processes and products.

    NSIA Insurance is a first class composite insurance company driven by integrity, care, innovation and professionalism with its head office in Lagos, strong regional presence in Abuja and a large network in strategic states across the country. NSIA Insurance offers a wide range of insurance services at competitive rates to meet the changing financial, investment and lifestyle needs of its corporate, commercial and individual customers.

  • Exploring travel, agric insurance opportunities

    Anchor Insurance Company Limited  has unveiled the Anchor Travel Insurance and Anchor Agriculture Insurance for the benefits of the insuring public.

    Managing Director/CEO of the company, Mr. Ebose Augustine who spoke during the unveiling of the products in Lagos, explained that groups, families, individuals travelling abroad can now travel with maximum comfort armed with an insurance cover that is guaranteed and affordable.

    He said the two products have been approved by the National Insurance Commission (NAICOM), adding that the products being offered under a partnership with MAPFRE ASISTENCIA, a Spanish firm, come with different features and benefits.

    He said: “We were particularly glad when we received the approvals as it provides the opportunity for us to extend our well known passionate service difference and finesse to drive the products for the maximum comfort of our potential customers. For about 30 years that Anchor has been in operation, we are remarkable for excellent delivery of services to our teeming customers. It comes with a family plan which ensures that children between three months and 18 years travelling with their parents only pay half of the premium rate being charged. It further comes with premium discount package for group subscriptions.

    “The group is expected to have a minimum of 10 persons. The discounts range from between five per cent and 25 per cent according to the number of persons that make up the group.

    “However, because of perceived risks associated with certain categories of age, the policy comes with variations in the premium charged to persons aged between 66 and 75 years, 76 and 80 years and 81 years old where only the Schengen policy is available. The policy comes with three travel protection plans: Schengen, Worldwide and Worldwide 1”.

    On the benefits, he said there are several unique benefits the product offers. They include medical emergency assistance which includes medical expenses and hospitalisation abroad, emergency medical evacuation, repatriation of family member travelling with the insured, emergency return home following death of close relative, repatriation of mortal remains.

    “It also includes personal assistance benefits which include legal assistance, pre-departure services, abroad information assistance about lost luggage and passport, delivery of medicines; losses and delays benefits which include loss of passport, driving licence, national identity card abroad, compensation for in-flight loss of checked-in baggage, compensation for delay in the arrival of luggage, delayed departure; personal accident benefits which include accidental death, permanent disability and civil liability benefits. The policy offers a maximum of 92 consecutive days abroad per trip. Annual cover for non-consecutive trips is also for a period not exceeding 92 consecutive days.”

    He further stated that they received NAICOM’s approval on four Agriculture Insurance products which include multi-peril crop insurance which covers against the risk of fire, lightening, pest/diseases, drought, flood, windstorm and aircraft. This policy covers damage for all cash and arable crops.

    “It also includes fishery insurance that takes care of risks of death of the fish as a result of diseases and collapse of the pond; poultry insurance which is essentially against the death of birds as a result of accident, diseases, fire, flood and windstorm; livestock insurance which insures against the death of animals due to accident, pest/diseases, fire”.

     

  • Financial Inclusion: NAICOM, PenCom move to capture 36.6m Nigerians

    Following plans to meet its financial inclusion target, the Federal Government has restated the desire to capture over 36.6 million Nigerian adults, representing 36.8 per cent of the working population through the micro segment of insurance and pension sectors.

    The figure includes self-employed Nigerians that are yet to officially embrace any form of financial services product.

    Speaking at the 4th National Insurance and Pension Correspondents (NAIPCO) National Conference in Lagos State, stakeholders in both sectors said majority of Nigerians in the informal sector were yet to be aware of the numerous benefits in embracing financial services products.

    To ensure that every Nigerian have access to financial services, they said the Federal Government came up with micro insurance and micro pension products to penetrate the grassroots and also get to those not currently registered in the Contributory Pension Scheme [CPS] nor covered by any form of insurance.

    To achieve the agenda, the Acting Director General, National Pension Commission (PenCom), Mrs Aisha Dahir-Umar, said the commission planned extending pension coverage to 30 million contributors by 2024, thereby ensuring that 40 per cent adult Nigerians are covered under the CPS.

    Dahir-Umar, who was represented by the Head, Benefit Administration Unit, PenCom, Babatunde Philips, said President Mohammadu Buhari, in March, 2019, launched the micro pension scheme to provide the informal sector with a veritable means of securing old age income.

    She said implementation of the Micro Pension Plan (MPP) would yield positive results for Nigerians and the pension industry, adding that it would assist greatly in reduction of old age poverty in the country.

    According to her, “the commission has put in place requisite infrastructure to facilitate seamless implementation of MPP. The Enhanced Contribution Registration System (ECRS) has been deployed to facilitate seamless operations of the MPP. This system has so far aided the smooth registration of micro pension contributors.”

    She also applauded the media for consistent support, saying it had assisted the commission in recording modest achievements in educating and enlightening the public on the workings of the CPS and the commission’s activities.

    Speaking in the same vein, the Acting Commissioner for Insurance, Mr Sunday Thomas, said the National Insurance Commission (NAICOM) had been doing a lot in terms of financial inclusion in the past eight years.

    The acting commissioner, who was represented by the Director, Governance Enforcement and Compliance, Leo Aka, said it required collective efforts to ensure that Nigerians in the informal sector embrace financial services.

    Looking at the demography of Nigeria, Thomas said one would notice that unemployment rate in Nigeria was quite high, adding that this was a signal that the industry needs to move fast to capture the people in the informal sector.

    He said the insurance commission had issued some guidelines to ensure that those not in the formal sector embrace financial services.

    Thomas added that while establishing the micro insurance guidelines, the commission ensured that the micro insurance products are very simple, easy to understand, affordable, valuable in that it should be able to address needs and remain efficient.

  • AXA Mansard posts N22b shareholders funds in half year

    AXA Mansard Insurance plc, a member of the AXA Group has announced its unaudited financial results for the period ended June 30, 2019.

    The company’s  Group Shareholders’ Funds stood at N22.49 billion, up eight per cent from N20.90 billion as at December 2018.

    The company also recorded Gross Written Premium of N29.36 billon in the period under review, up 25 per cent from N23.54 billion in June 2018.

    It posted a net premium income of N12.08 billion, up 26 per cent from N9.56 billion in June 2018 while its Investment and Other Income stood at N2.84 billion, down 13 per cent from N3.28 billion in June 2018.

    The Operating Expenses which stood at N3.52 billion, remain flat from N3.52 billion in June 2018.

    Meanwhile, profit before tax of N1.57 billion, down 16 per cent from N1.87 billion recorded in June 2018.

    Total Assets grew by 14 per cent to N81.24 bilion from N73.77 billion as at December 2018, Insurance Liabilities up 32 per cent to N29.65 billion from N22.54 billion as at December 2018.

    Commenting on the results, the Chief Financial Officer, Mrs. Ngozi Ola-Israel  said : “At the end of the half year, we grew top line (gross written premium) by 25 per cent and underwriting profits by nine per cent with no growth in operating expenses compared to last year. This positive performance is an indication that our efforts to continually grow the business profitably are on track. However, our profit after tax dipped by eight percent  driven by one off loss on the sale of part of our investment property”.

    Commenting on AXA Mansard’s financials at the end of June 2019, the Chief Executive Officer, AXA Mansard Insurance, Mr. Kunle Ahmed said ‘’prompt claims payment remains critical to the actualisation of insurance companies’ promise to return clients to their pre-loss financial position. The group closed with gross claims payment of N6.8 billion to various clients, attesting to our well tested commitment to meeting our obligations to our customers’’.

    Commenting further on the results, Mr. Ahmed said: “The group closed with shareholders’ fund of N22.5 billion, representing a growth of eight percent from our position as at the end of 2018. Specifically, for our insurance business, we closed half year with shareholders’ fund of N18.2 billion.

  • NAICOM gives wake-up call to directors

    The National Insurance Commission (NAICOM) has given a wake-up call for board directors, saying the low level of corporate governance oversights in the insurance sector remains worrisome.

    The Acting Commissioner for Insurance, National Insurance Commission (NAICOM)  Sunday Thomas, who spoke at the Conference for Directors of Insurance Companies at Oriental Hotel, Lagos, said the failure of corporate governance in the  past, has played a prominent role in the death and distress of most corporate organisations the world over, including Nigeria.

    He said NAICOM would continue to introduce new reforms and initiatives in line with international best practices in its march towards achieving the full potentials of the industry, saying the industry has under performed in Nigeria, given its potential, and the fact that its contribution to the nation’s Gross Domestic Product (GDP) at less than 1 per cent, was abysmally low especially when compared with other sectors in the financial services industry.

    Thomas said he was convinced that once “we can successfully navigate this corner, we could be on our way to entrenching a financially solid, vibrant, viable and active insurance market that would bring about not only an increase in penetration but a substantial increase in the industry’s contribution to GDP,” adding that this will also simulate accumulation of long-term funds for infrastructural financing, job creation and an improved Return on Investment (ROI).

    He said: “It is long overdue that we make changes in the right direction. Successful economies are characterised by a strong investment culture of which the insurance industry plays a vital role. So we literally need to re-energise the insurance industry and commence playing our key roles in boosting and growing the sector.

    “The position of the Board of Directors is key in achieving a high level of efficiency in an institution’s corporate governance structure. Over the years, the Commission has made attempts at entrenching good corporate governance culture in the insurance sector. The development and issuance of Corporate Governance Code in 2009 and the Market conduct guidelines in 2014 are among efforts of the Commission in this direction’’.

    Thomas said there was need to emphasise that the primary role of the board, either in a private or public entity remains “the oversight of management to ensure that corporate goals, vision, mission and values of the entity are strictly upheld at all times. The board is also expected to ensure the financial soundness and general well-being of the organisation by monitoring the management to guarantee effective and efficient deployment of human and capital resources for the overall benefit of all stakeholders. The observance of this role has been lacking in some of our companies and that has contributed in no small measure to the challenges facing  them today.

    “It is our firm belief that members of the board can effectively perform their roles without necessarily interfering in management functions. It is the desire of the Commission to work with all stakeholders, including members of the Board of Directors to reverse this trend. It is imperative for me to remind the directors that their companies are in the business of insurance primarily to settle genuine claims made by policy makers. In all policy formulations of the board, I am appealing that the prompt settlement of claims be given  high priority,” Thomas said.

  • Cornerstone recovers from loss, makes N2b profit

    Cornerstone Insurance Plc has returned to profitability. Its 2018 financial year end. Its Profit before Tax for  2018 stood at N2.66 billion. This is coming after a period of losses.

    The company’s Gross Premium Written (GPW) for the financial year ended December 31, 2018 stood at N11.5 billion, an increase of 25 per cent from the previous year.

    The largest contributor to this result is the Group Life portfolio, which contributed N2.01 billion, representing 17 per cent of GPW.

    The entire life insurance portfolio recorded a growth of 48 per cent from that of previous year.

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    Its Chairman, Mr Segun Adebanji said at 27th Annual General Meeting (AGM) of the company, that the financial performance of Cornerstone Insurance has continued to record growth in revenue, despite challenging market conditions.

    He said: “The growth was driven by regulatory changes to Group Life Insurance pricing limits and the introduction of a new product targeted at retail segments. The Individual Life Insurance portfolio grew by 370 per cent from the previous year, representing N621 million in 2018 from N132 million in 2017. The Engineering, Oil & Gas product segments continued to dominate our General Business portfolio with a combined contribution of 57 per cent of General Business Premiums (N4.13 billion), giving credence to the emergence of Cornerstone Insurance as a leading special risks underwriter.

    “A review of our overly prudent claims reserving methodology during the year saw our Gross Claims incurred for the year drop to N4.53 billion from N7.74 billion in the previous year, aligning more with the Industry average.

    ‘’In accordance with the provisions of IFR S 11, the completion of our Head Office building, which had been represented as a non-earning asset in our accounts, unlocked some value and contributed N2.31 billion to the Group’s profit.

    ‘’Nonetheless, the Board of Directors and Management did not relent on the cost control measures put in place in the previous year and our efforts reduced Operating and Personnel expenses by 13 per cent from N3.09 billion in 2017 to N2.69 billion in 2018.’’