The Nation Newspaper

Category: Insurance

  • NEM posts N15b gross premium

    NEM Insurance Plc has grown its gross premium by 12.2 per cent from N13.4 billion in 2017 to N15 billion in 2018.

    The underwriting firm’s net premium also increased from N9.8 billion to N10.7 billion, an increase of 9.1 per cent in the period under review.

    Its investment income increased by 34 per cent from N709 million in 2017 to N953 million in 2018, just as profit decreased.

    The group’s Profits before Tax (PBT) for the year under review was N2.69 billion and N3.09 billion in 2017, a decrease of 13.2 per cent, while the parent company’s PBT was N2.67 billion for 2018 and N3.08 billion for 2017, a decrease of 13.4 per cent.

    Read Also: ‘Insurance policy as low as N5000’

    The gross claims incurred during the year was N6.01 billion, an increase of 20.0 per cent over that of the preceding period that was N5.01 billion. The Gross Claims ratio for 2018 stood at 40.0 per cent whereas that of 2017 was 37.4 per cent, an increase of 2.6 per cent.

    Addressing shareholders at the firm’s 49th Annual General Meeting, the Chairman, Dr. Fidelis Ayebae explained that the decrease in profit recorded due to the increase in claims paid during the period under review.

    He said the Board during the year under review supervised the management’s efficiency that brought about a reduction in the management expenses from N2.9 billion in 2017 to N2.8 billion in 2018.

    The Group Managing Director/Chief Executive Officer, Mr Tope Smart on his part said the company has increased its market share from about 5 per cent market share to about 7 per cent market share despite the difficult operating environment.

  • Brokers warned against weak insurance companies

    The Nigerian Council of Registered Insurance Brokers (NCRIB) has warned brokers against doing business with weak insurance companies.

    This is coming on the heels of moves by the National Insurance Commission (NAICOM) to strengthen the insurance industry by mandating existing insurance companies to inject capital through a recapitalisation exercise.

    NCRIB President  Mr Shola Tinubu while speaking on the recapitalisation of insurance companies, urged members of the council to be mindful of companies that are weak and would not be able to meet up with the regulator’s recapitalisation requirement.

    He spoke at the June 2019 Edition of NCRIB Members’ Evening hosted by NSIA Insurance Plc in Lagos.

    He said news have been making rounds that some brokers still indulge in placing businesses with companies that are challenged.

    Read Also: Unions reject planned salary deduction for health insurance

    He said: “It is no more news that NAICOM has jerked up the minimum paid-up capital of Insurance Companies in Nigeria. The new capital base requires that companies that want to remain in Life Business should raise their minimum paid up capital base from N2 billion to a minimum of N8 billion; General Insurance Companies from N3 billion to N10 billion, Composite Insurance Companies from N5 billion to N18 billion, while Re-Insurance Companies will require a Paid Up capital base of N20 billion from N10 billion.

    “As insurance brokers, we cannot shy away from the fact that this directive will adversely affect the entire industry. As a proactive Council, we are critically examining the implications and possible solution to the effect the implementation would have on our members.

    He further urged brokers to maximize the benefits of the Council’s relationship with NSIA Insurance Plc which he described as a frontline insurance company.

  • AXA Mansard sponsors brand masters class for entrepreneurs

    AXA Mansard Insurance, a member of the AXA Group has announced its sponsorship of the third edition of the Charles O’tudor’s Brand Master Class event aimed at empowering entrepreneurs with the right skills needed for business growth.

    The master class which took place in Lagos, themed “Spiritual Branding” had in attendance reputable personnel from different fields such as Timi Dakolo, Chioma Akpotha, JJ Omojuwa and a host of other distinguished guests. The class focused on equipping entrepreneurs with the skills required in creating a compelling brand based on the principles of true and honest practices.

    Read Also: MSMEs as alternate revenue source in CBN’s five-year plan

    Speaking about the event, the Chief Strategy and Marketing Officer, at AXA Mansard Insurance plc, Mr Kola Oni said entrepreneurs who are hungry for improvement and growth must be able to go beyond the status quo and implement plans on how to strategically reposition their brand in today’s competitive market.

    He noted that Charles O’tudor has over the years proved that he is committed to equipping entrepreneurs with necessary tools needed to drive their personal and public brands and we are most delighted to be partnering with him

    The event further emphasized the importance of planning, building and implementing a winning brand from brief to creation and implementation.

  • NAIC: our aim is to protect farmers

    The provision of subsidy for agricultural insurance premium is aimed at protecting farmers and complementing the efforts of the Federal Government on financial inclusion, the Managing Director/Chief Executive Officer (CEO), Nigerian Agricultural Insurance Corporation (NAIC), Mrs. Folashade Joseph, has said.

    Joseph, who spoke with reporters in Johannesburg, South Africa said the corporation is making farmers happy and comfortable.

    She said while the Federal Government, through the Central Bank of Nigeria (CBN), is providing soft loans to farmers, NAIC is complementing this effort by insuring farmers, to incorporate them in the financial system.

    She stressed that financial inclusion ensures that more people, especially those in the informal sector, were brought into the financial system, to aid proper economic planning, enhances savings culture and increases funds in the banking sector, which contributes to the healthiness of the entire financial sector value-chain.

    Read Also: NAIC pays N464m claims to farmers

    She said: “Agriculture contributes more to the nation’s Gross Domestic Product (GDP). NAIC is specifically created to cater for the entire agricultural value-chain of which farmers are major. We aim to boost the economy through agriculture. Agriculture has contributed much to the GDP in the last few years.’’

    “On the part of NAIC, 80 per cent of farmers are engaging in small scale farming. And it is very important to take care of these farmers against risks that may arise from farming. The farmers are financially included because they access loans. Though federal government has done a lot through CBN in this regards, it is our role to support this process and make farmers happy and comfortable.

    To increase the number of agricultural insurance policyholders, the corporation had, and is still embarking on sensitisation of farmers across the country on the need to protect their farmlands, and equipments through agric insurance products offered by NAIC.”

    Listing the barriers of insurance penetration which is also affecting adoption of agric insurance products, she said, culture, religious beliefs are challenges as the small hold farmers do believe everything is an act of God.

  • African Oil, Energy Pool capacity hits $90m

    The African Oil and Energy Pool has an underwriting capacity of $90 million as at December 31, 2017, African Insurance Organisation Secretary-General, Ms. Prisca Soares, has said.

    She made this known during the organisation’s conference in South Africa.

    She called for patronage of the pool’s business, noting that this is required from across the continent.

    She stated that while the African Oil and Energy Pool suffered three significant losses in 2016 and 2017 impacting the two financial years, it is anticipated that the destabilising effect should start changing in the short term.

    She further disclosed that the pool provides needed capacity and underwrites businesses in Africa and some international markets.

    Read Also: African oil producers seek production cut

    As at the year ended 2017, the pool had 51 underwriting firms from 14 African countries as members, she added.

    Similarly, Ms Soares revealed that the African Aviation pool in the period under review has an underwriting capacity of $17.5million for each risk and patronage is required from across the continent.

    She said after the drop in income, which was partly due to falling premium rates, there was the growth in 2017 continuing into last year.

    She also said the pool underwrites business from many African and international airlines and has membership of 52 underwriting firms spread across Africa as at December 31, 2017.

    She said: “The general aviation industry was not left out in the recent sophistication in risk exposures and cyber risk exposure for instance became a new area of focus for aviation companies.

    “In Africa, the challenges of infrastructure, operational costs and need for cooperation between airlines are still prevalent, but efforts at having open skies agreement  with stabilisation of the aviation sector in many African countries should lead to future growth.

    “The African Aviation Pool continues to provide much needed capacity to the African aviation industry.’’

    She disclosed that the manager of the Oil and Energy Pool and the Aviation Pool is the African Reinsurance Corporation.

  • National insurance confab holds June 30

    The National Insurance Conference will hold from June 30 to July 2 at Transcorp Hotel, Abuja.

    The Special Guest of Honour is President Muhammadu Buhari.

    The Insurance Industry Consultative Committee (IICC) Chairman, Mr. Eddie Efekoha is the chief host.

    The Managing Director, Access Bank Plc, Mr. Herbert Wigwe would speak on the theme  ‘Disruption, innovation and business growth’.

    According to a statement by the  National Insurance Conference Planning Committee Chairman, Sir Muftau Oyegunle, the business world is witnessing an age of dramatic change characterised by evolving business models and propelled by technological innovation and disruption that is shaping business operations, hence operators must create platforms to address the changing dynamics.

    Read Also: Motor insurance a must, says Insurers Committee

    Oyegunle said papers on sub-themes, such as: ‘Digital disruption; threat and opportunity’ would be delivered by Mr Siegfried Jegels;  “Transforming insurance business through inclusive insurance” by Mrs. Eme Essien Lore and a paper on “Regulations, innovation and business growth would be delivered by Dr Doyin Salami.

    Also, issues on regulations and business growth would be handled by the Commissioner for Insurance, Alhaji Mohammed Kari.

    He said experts, such as Professor Fabian Ajogu, Chief Anthony Idigbe, and Mr. M. K.Ahmad, would be chairmen of sessions.

    He said the conference, which  holds yearly under the auspices of IICC, had become a platform for the exchange of ideas and facilitation of professional knowledge for critical stakeholders in the economy, both within and outside Nigeria.

    He said: “The conference is being organised to further underscore the aim of the industry to upscale the knowledge of insurance operators and other professionals in the financial services sector as well as other stakeholders about contemporary dynamics in the economic development of the country and the globe generally.’’

  • International Airlines Group to buy 200 Boeing 737 MAX aircraft

    International Airlines Group (IAG), one of the world’s largest airline groups, said it plans to build its future fleet with the Boeing 737 MAX with an intention to purchase 200 MAX jet.

    IAG and Boeing said the two companies have been in discussions regarding the opportunity  in a deal that would be valued at more than $24 billion, per list prices.

    IAG is the parent company of Aer Lingus, British Airways, Iberia, Vueling and LEVEL that fly more than 113 million passengers a year combined. The group has been a long-time operator of Boeing twin-aisle airplanes. Earlier this year, IAG group committed to and finalised a major order for Boeing’s newest long-haul model, the 777X, to complement its fleet of current-generation 777s and new 787 Dreamliners.

    In the single-aisle segment, IAG and its affiliates used to operate Classic 737 aircraft. Today, its fleet is almost exclusively Airbus A320 family aircraft. IAG CEO Willie Walsh has said the group would consider the 737 MAX as part of diversifying its future fleet to spur competition.

    Read Also: Boeing 737 skids off runway into Florida river

    “We’re very pleased to sign this letter of intent with Boeing and are certain that these aircraft will be a great addition to IAG’s short-haul fleet,” said Willie Walsh, IAG chief executive. “We have every confidence in Boeing and expect that the aircraft will make a successful return to service in the coming months having received approval from the regulators.”

    In selecting the 737 MAX, IAG says it will fly a combination of the 737 MAX 8, which seats up to 178 passengers in a two-class configuration, and the larger 737 MAX 10 jet, which can accommodate as many as 230 passengers. The airline did not disclose a specific split between the two MAX models, though it anticipates deploying the aircraft at a number of the group’s airlines including Vueling and LEVEL.

    “We are truly honoured and humbled by the leadership at International Airlines Group for placing their trust and confidence in the 737 MAX and, ultimately, in the people of Boeing and our deep commitment to quality and safety above all else,” said Boeing commercial airplanes president & CEO Kevin McAllister.

  • Recapitalisation: Regency shareholders offer dividends

    To recapitalize Regency Alliance Plc, its shareholders have urged the management of the company to retain the N200. 06 million dividends for the 2018 financial year.

    The shareholders made the offer during the company’s 25th Annual General Meeting (AGM) in Lagos.

    Its Chairman Ambassador Baba Gana Kingibe said to appreciate the shareholders, the board recommended the dividend payout, representing 3k per 50k share for shareholders for the financial year under review.

    But the shareholders suggested that the dividends should be ploughed into the business.

    Kingibe, however, disclosed that the gross premium production rose by 1.30 per cent from N3.368 billion in 2017 to N3.408 billion in 2018.

    He said: “The effect of increased premium generation was significantly eroded by the 24.30 per cent increase in net claims, 8.93 per cent increase in underwriting expenses and 3.94 per cent increase in management expenses compared with 2018 and 2017 figures.

    Read Also: Cadbury shareholders get N471m

    “There was an increase of 24.37 per cent in the investment income of the company, which was reflective of the high deposit rates and government yield rates offered during the year. There was also an increase of 6.68 per cent in profit after tax from N196.475million in 2017 to N209.599million in 2018.

    “It is expected that our company, building on the gains of past financial discipline and strategic positioning, will continue to produce better results in the future. Total asset base of the company grew by 6.48 per cent from 7.345billion in 2017 to N7.821billion in 2018. This was due primarily to the effect of the foreign exchange translation loss arising from consolidating Regency Insurance Limited Ghana’s account. Total assets for our group and our company as at December 31, 2018 stood at N9.853billion and N7.821billion,” he said.

    After presenting the 2018 performance of the company, Ambassador Kingible announced his departure from the board. He expressed his gratitude to the company’s Board, management, staff and the shareholders for their support in the last nine years.

  • Motor insurance a must, says Insurers Committee

    Driving without motor insurance policy is an offence, the regulatory body of insurance, the Insurers Committee has said.

    The Committee, which comprises the National Insurance Commission (NAICOM) and insurance operators, said it is a must for vehicle owners and others to have a motor insurance policy.

    Its Sub-Committee on Publicity and Communication Chairman Mr Oye Hassan-Odukale said the committee is educating the public on the need for insurance and its benefits.

    He pointed out that motor insurance protects road users from the unexpected.

    According to him, having motor insurance goes beyond being free from road safety officials.

    He explained that there are two  motor insurance, Third Party Motor Insurance and Comprehensive Motor Insurance.

    Read Also: ‘Insurance policy as low as N5000’

    He called on every Nigerian, who  drives, to buy motor insurance policy, noting that the premium for a Third Party is N5000

    He said: “It protects road users from unexpected occurrences on the highway. Insurance covers when someone bashes your car or breaks into your car, as well as cases of accidental damage to third party property while driving.

    “As the name implies, Third Party Motor Insurance covers for accidental damage, injury to third party property, which refers to other road users while driving. It does not cover accidental damage to the insured vehicle. Comprehensive motor insurance, on the other hand, covers for loss or damage to the vehicle caused by fire or theft, damage to third party as well as personal injury or fatality resulting from accident. It also comes with perks, such as covering the cost of towing your vehicle, as well as a car tracker.

    “It is worthy of note that insurance companies, under the umbrella of Insurers Committee and National Insurance Commission (NAICOM), have made insurance policies affordable to all Nigerians. With N5,000, you can get your third party motor insurance.

  • Nigeria’s financial sector fragmented, says NAICOM

    Nigeria is operating a fragmented financial sector which is working against the accurate record of its growth on the financial inclusion goal of the Federal Government.

    The Commissioner for Insurance, Nigeria, Alhaji Mohammed Kari, made this known at the just-concluded 46th African Insurers Organisation(AIO) held in Johannesburg, South Africa.

    He further disclosed that the fragmentation of the financial sector in Nigeria is hampering the growth of Insurance industry in the country.

    To this end, he said commission is working with other financial sector regulators to see how they can come with a consolidated penetration rate that will reflect the true insurance penetration rate of the country.

    He stressed that the fragmented financial sector has always worked against the insurance sector when government is making financial projection and planning.

    Read also: Wapic raises share capital to N15b ahead NAICOM’s deadline

    He pointed out that unlike in most countries where the financial sector only has one regulator directing  activities of the banks, insurance companies, pension fund operators and Health Management Operators (HMOs), Nigeria has series of regulators, each controlling each sub-sector of the financial sector.

    He said the Central Bank of Nigeria (CBN) controls the banks, the National Pension Commission (PenCom) controls the pension fund operators while the NAICOM regulates the insurance companies, whereas, in some countries, these sectors were considered as one and are regulated by a single regulator, which gives the financial sector of these countries good ratings because the achievements are counted as one.

    He said: “Whereas pension and health insurance are classified as the products of insurance industry in most countries, Nigeria’s case is an exception.

    “Nigeria operates a fragmented financial sector which restricts insurance sector to only the conventional insurance products and services. Pension is seen as a separate industry as well as health insurance when other countries classify pension and health insurance as being under the insurance industry. This is a misnomer, a situation that is affecting the growth of the sector and the country’s rating among other financial sectors in Africa and across the world.

    “Such fragmentation is one of the reasons why insurance penetration is said to be below one per cent, thereby, limiting the contribution of the sector to the nation’s Gross Domestic Product(GDP). If health insurance and pension products are added to the insurance industry, insurance contribution to GDP would rise, as well as the penetration rate which will make Nigerian insurance industry compete with its peers across the world.”

    Although, he believes Nigerian insurers must be responsible in meeting and surpassing customers expectation in the area of product delivery and prompt claims payment, he noted that, the low risk retention capacity of the sector also needs to be addressed.

    He noted that the ongoing recapitalisation exercise will allow local insurers to retain huge risks in the country, thereby, avoiding premium flight, that will, in the long run, increase the profitability of the sector and  its impact on the nation’s economic growth and development.

    He however, added that the recapitalisation is long overdue as foreign exchange rate, asset replacement values as well as claims volume have increased in the last 12 years, and operating with the current capital base is putting insurance firms at risk.

    “Insurance operators are fond of resisting recapitalisation exercise whenever the idea is mooted. Some insurers prefer to continue to write huge risks in aviation and marine sectors, with small capital, a development that is responsible for why some underwriting firms are struggling to pay claims,” he added.