The Nation Newspaper

Category: Insurance

  • AIICO grows gross premium by 17.4%

    AIICO Insurance Plc’s gross premiums for the year ended December 31, 2018 has grown by 17.4 per cent to N37.7 billion from N32.1 billion reported in 2017.

    The growth, according to the company, was predominantly driven by both of its Life and Non-life businesses.

    The company said the deliberate approach to risk selection, superior technical underwriting capabilities and reinsurance arrangements led to over 180 improvement in our underwriting profits from negative N4 billion in 2017 to over N3.2 billion in 2018.

    Profit before tax stood at N3.4 billion over N3.0 billion recorded in the corresponding year ended December 2017.

    Shareholders however got dividend of N415.8 million representing 6k per ordinary share of 50 kobo each.

    Speaking at the company’s 49th Annual General Meeting, AIICO Chairman, Mr. Bukola Oluwadiya stated that indeed 2018 was another better year for the company, adding that the meticulous execution of their transformation plans continued to yield expected results with year-on- year improvements in their performance.

    Oluwadiya disclosed that during the year under review, there was growth in their major business lines and tangible equity {value} increased again this year, compared to 20l7.

    He said: “Net Asset Value(NAV) increased by 39.4 per cent from N10.9 billion in 2017 to N1S.2 billion in 2018. Increase in NAV was driven by profit for 2018. The total assets of the company increased by 19 per cent to NI09 billion compared to N92 billion in December 2017. We continue to strengthen our balance sheet and build a strong financial base needed to propel our company to the next phase of growth.

    “We are increasing the total dividend payment this year by 20 percent and as we move forward, the Board has decided to move to a progressive dividend policy to deliver superior returns to our shareholders. Our plan is to maintain or grow the ordinary dividend per share over time depending on business performance, growth prospects and regulatory solvency requirements.”

    The Managing Director, AIICO, Edwin Igbiti, said across the g       roup, gross written premiums increased 17.4 per cent from N32.l billion to N37.7 billion driven by growth in our life and non-life businesses.

  • Leadway Assurance pays N33.8b claims

    Leadway Assurance Company Limited has recorded an increase in claims payment from N27.4 billion in 2017 financial year end to N33.8 billion in 2018.

    The company also recorded a 15 per cent growth in its assets base with N312.7 billion recorded in 2018 as against N271.9 billion in 2017 in addition to a four per cent increase in Gross Written Premium (GWP) from N84.1 billion in 2017 to N87.5 billion in 2018.

    Speaking during the company’s 47th Annual General Meeting (AGM) held in Lagos, the Managing Director, Mr. Oye Hassan Odukale, stated that Leadway has continued to lead other industry players in the area of claims payment.

    He restated the company’s commitment to prompt claims payment as the cornerstone of its business principle, revealing that the company has paid claims in excess of N110 billion over the last five years.

    He said: “The value we have created over the years is embedded in the loyalty and commitment of the greatest number to keep Leadway as a legacy for several generations. We are grateful to our treasured customers, brokers, agents and other stakeholders who have objectively trusted in the liquidity advantage and unmatched conservative risk reserves we hold as a yardstick for placing certain risks with us. We are equally grateful to them for the testimonial campaign which attests to us as the insurer to beat in claims payment.”

    On the future outlook of the company, the Chairman, General Martin Luther Agwai (CFR), said the company’s operation in 2019 and beyond would be driven by the strategy of using digitisation and creativity to harness unexploited and prompt means of selling insurance as a contingency benefit to its target market while also strategically deepening the penetration of insurance to smallholder farmers in every community through the instrumentality of Area Yield Index Crop insurance and creating insurance awareness in the rural communities.

  • AXA Group CEO meets women entrepreneur

    The Chief Executive Officer, AXA Group, Thomas Buberl,  has met with some women entrepreneurs in Lagos.

    According to a statement by the company, the event had as its theme: “Role of women in deepening financial and insurance inclusion”.

    Buberl emphasised the need to empower women entrepreneurs.

    He said: “In insurance, if we look at how products are designed, it’s very male-oriented, but we’ve been working a lot to see how we can launch products that are more women-focused addressing the distinct needs of women which men do not have.

    “A key point covered at the session was how to create more opportunities for female entrepreneurs to access insurance products in Nigeria. Women entrepreneurs play a vital role in unlocking economic growth as they provide majority of the labour with little resources.

    “What we see clearly is that there is an immense power that women bring to the society, be it as entrepreneurs, or leaders in the society. Yes, we can say we have made a few advancements, but it is never enough, we need to get even further in empowering women in the society. At AXA, we are looking at ways to reduce stumbling blocks for female entrepreneurs in business.”

    Buberl is visiting Nigeria for the second time. His first was in May 2016.

  • FBNInsurance drives sales with Ember Championship

    NO motivate staff and increase performance in  policy uptake, sales and new businesses, FBNInsurance Limited, an FBNHoldings Company associated with the Sanlam Group SA, has rewarded winners of its yearly MD/CEO Ember Championship Award.

    At the award presentation, which held in Port Harcourt, the Rivers State capital, the Head, Retail Distribution, Odinakachi Umekwe, reiterated that the championship was designed to push new premiums and increase persistency between September and December yearly.

    ‘’We know how hard it is to get people to buy insurance, especially as the year ends. To encourage sales and get new businesses, this competition was set up to reward the Sales Areas that meet certain sales criteria during this period,” he said.

    He explained that for ease of administration of the award, the country was divided into areas. Port Harcourt Area won the best performing Area while Benin and Enugu came second and third respectively for the period under review.

    Presenting cash award, FBNInsurance Limited Managing Director, Valentine Ojumah, commended the Area and charged it to do more to get a greater reward.

    He promised to support them to ensure they meet their sales target. He enjoined other areas to step up their performance to join the league of the winners.

    FBNInsurance operates a robust retail structure of over 2,000 retail agents operating out of 42 sales outlets nationwide.

  • African Alliance in financial crisis

    African Alliance Insurance ‘s five-year financial result has revealed a worrisome outcome, The Nation investigation has shown.

    African Alliance, a life insurer, which is preparing to celebrate its 60 years’ anniversary, appears to be in a critical condition.

    This is going by the company’s five- year financials obtained by The Nation from the firm’s website. It showed negative in Solvency Margin, Shareholders Fund and Annuity Cover.

    The result showed an erosion and  depletion of Shareholder’s Fund to the tune of N281.56 million and Solvency Margin deficit of 376 per cent as recorded in its 2017 financial result.

    The company solvency margin is in deficit of 376 per cent in the period under review, which is below the minimum regulatory capital of N2 billion required by the National Insurance Commission (NAICOM) for life insurance business.

    This constitutes non-compliance with the regulatory capital requirements. The continuation of the company’s operation is dependent on its ability to meet its regulatory capital requirement and generate sufficient cash flows to meet its obligation as they fall due.

    Similarly, the company’s annuity fund has been eroded. The Annuity Fund Solvency Margin is a negative of 10.69 per cent, far less than the 30 per cent required minimum solvency stipulated by the Pension Reform Act (PRA) Annuity Regulations.

    As shown in 2016 and 2017 results, the company has in the past two years been operating a negative solvency margin of N2.6 billion and N5.52 billion respectively. This showed that the financials of the company worsened in 2017 compared to the previous year.

    Read also: FBNInsurance drives sales with Ember Championship

    It posted a negative gross solvency margin of 130 per cent for 2016 and the shortfall in assets cover for contract liabilities of N2.23 billion was negative, indicating that the company will be unable to meet its contract liabilities when they fall due.

    The situation deteriorated in 2017 with a negative net solvency margin of 376 per cent and a shortfall in assets cover for contract liabilities of a negative of N6.084 billion.

    Despite the resolve of the company’s Board and management to turn around the situation in 2017, according to their 2016 report, the situation  deteriorated.

    Other indices such as Profit after Tax, Gross Premium Written, Assets and Liabilities also declined. It also made loss of N4.16 billion in its Profit Before Tax in 2017 as against the N3.216 billion made in 2016.

    Its Gross Premium Written also fell by N6.6 billion in 2017 from the N12.9 billion it recorded in 2016.

    Consequently the company may need an urgent intervention by the regulatory authority for it to meet its major obligation of claims payment to policyholders. According to the company’s financial report, the latest available actuarial valuation of the liabilities for Annuity Fund of the company as at 31 December 2016 was carried out by HR Nigeria Limited.

    The report read: “The book value of the liabilities for Annuity Fund in 2016 is N27.26 billion. The minimum required solvency margin is N8.17 billion and the available Shareholder’s Fund is N3.6 billion which is less than the required minimum solvency requirements stipulated by the Pension Reform Act (PRA) 2014 Annuity Regulations under the supervision of the National Penion Commission (PenCom). The PRA Annuity Regulations require the life insurer to demonstrate a minimum solvency margin of the Annuity Fund of 30 per cent.”

    In the 2017 financial report, the company’s retained earnings is a negative of N26.15 billion. This is the amount set aside from their previous losses over the years.

    Further checks by The Nation  showed that the company had a shortfall of solvency cover of N4.579billion, which is just 7.57 per cent solvency cover for Annuity Fund as at December 2016 as against the 30 per cent required by law.

    As stated in the financial statement: “The National Insurance Commission (NAICOM) specifies the minimum amount and type of capital that must be held by the company to cover the insurance liabilities. The regulator measures the financial strength of insurance companies using the capital adequacy requirements for the category of company. This test compares insurer’s capital against the risk profile.

    “The book value of the liabilities for Annuity Fund is N30.09 billion for 2017 report. The minimum required solvency margin is N9.028 billion and the available Shareholder’s Fund is negative of N281.56 million, which is less than the required minimum solvency requirements stipulated by PenCom’s PRA Annuity Regulations. The PRA Annuity Regulations require the life insurer to demonstrate a minimum solvency margin of the Annuity Fund of 30 per cent.

    On the company’s 2015 result, the report stated: “The total admissible assets of the company less the net insurance and investment contract liabilities is a deficit of N4.817 billion. The shareholders fund is N613 million. The company also recorded a negative Solvency Margin of N5.727 billion.

    “This is below the minimum regulatory capital of N2 billion required by NAICOM for life insurance business. These constitute non-compliance with the regulatory capital requirements. The continuation of the company’s operation is dependent on the ability to meet its regulatory capital requirement and generate sufficient cash flows to meet its obligation as they fall due,” the report read.

    According to the company’s Auditors, Deloitte & Touche (Chartered Accountants), As at December 31, 2017, the company and the group made Loss After Tax of N3.7 billion and N6.2 billion. Added to this is a negative Solvency Margin of N5.5 billion.’’

    Delliotte added that the total admissible assets of the company less Net Insurance and Investment Contract Liabilities amounted to a deficit of N6 billion. These conditions indicate the existence of a material uncertainty that may cast doubt on the company’s and Group’s ability to continue as a going concern.

  • NAIC pays N464m claims to farmers

    The  Nigerian Agricultural Insurance Corporation (NAIC) has paid N464 million claims in the first quarter of the year to its insured farmers across the country.

    In statement, its Managing Director, Mrs. Folashade Joseph  said prompt payment of claims has always been the cardinal principle of NAIC.

    She stated that NAIC was established by the Federal Government to shield farmers from the adverse effects of natural disasters.

    As a responsible player in the agric insurance space, we, at NAIC, believe that prompt payment of claims is the ultimate goal of any insurance business.

    The corporation provides insurance cover to all categories of operators, whether small, medium or large scale across the agricultural value chain, she added.

  • What next for insurance industry?

    There is an uneasy calm in the insurance industry, The Nation investigation has revealed.

    Palpable is the disquiet between the industry regulator, the National Insurance Commission (NAICOM), and the operators, following the cancellation of some regulatory initiatives and orders.

    NAICOM introduced three major policies to reform the industry.

    To find solution to the industry’s problem, NAICOM on July 25, last year, introduced the Tier-Based Minimum Solvency Capital (TBMSC) that would have mandated the firms recapitalise to have a good ranking under the Tier 1, 2 and 3 categories of the TBMSC’s plan. The plan was jettisoned last November by the regulator.

    The Commissioner for Insurance, Mohammed Kari, said the recapitalisation scheme was aimed at developing and applying appropriate tools that consider the nature, scale and complexity of insurers, as well as non-core activities of insurance groups, to limit significant system risk and achieve soundness of companies and contribute to the achievement of stability of the financial system.

    NAICOM said the policy would allow insurers to focus on their areas of strength, improve settlement of claims, enhance local retention, encourage market discipline, prudence and appropriate pricing, encourage innovation and deepen market penetration, encourage voluntary mergers, and build investors’ confidence, and build a stronger and more vibrant insurance industry.

    But some insurers, through their shareholders, kicked against it, leading to the cancellation of the policy.

    Similarly, the commission introduced the State Insurance Producers (SIP) policy, which would have granted states the operational licence to sell insurance products.

    The policy seeks to enforce compulsory insurance and deepen penetration and create jobs. But it pitched the brokers against the Commission. The move has sent jitters down the spine of operators, especially brokers, who fear that the addition of states as insurance intermediaries might throw them out of business.

    Based on this, the brokers threatened to sue the commission, leading to the cancellation of the policy.

    Following these cancellations, the industry has been at a standstill.

    An operator, who does not want to be mentioned, said the body language of the regulator was frightening.

    He said the commission has not said anything about recapitalisation,  but many of them are trying to find adequate capital.

    Another operator said the regulator may be hard on them when it comes up with other policies in future.

  • NCRIB urges govt to curb building collapse

    To combat the menace of building collapse in the country, government at all levels need to be more proactive in implementing building laws, the President, Nigeria Council of Registered Insurance Brokers (NCRIB), Mr Shola Tinubu, has said.

    He spoke in an interview with reporters in Lagos.

    He also said that they have to continually engage stakeholders in the construction built environment and related institutions to elicit their input for a long lasting solution to the malaise.

    He called on the government to give more impetus to the implementation of the enforcement of compulsory building insurance as enshrined in Section 64 and Section 65 of Insurance Act 2003.

    He further advised Nigerians to, on their own, insure their personal assets in order to mitigate their losses when and if losses like building collapse occur.

    He added that every individual should ideally live up to his responsibility of care by protecting whatever is valuable to him or her, both life and property, noting that their slogan has been,” Whatever is worth having, is worth insuring”.

    Speaking on efforts to drive insurance penetration in the insurance industry, he said the council is quite aware of the desire of the National Insurance Commission (NAICOM) to drive insurance penetration in the country, noting that it is commendable.

    “While the entire industry operators are saddled with the task to make this vision come to pass, the NCRIB would soon be redoubling its efforts by making inputs into the initiative. We like to use this opportunity to appreciate NAICOM for its favourable disposition towards growing the industry and assure that our council will continue to complement the commission in this regard.”

    He further stated that the council is committed to adding greater value to its members.

    “I am most delighted that today, it is a pride for any member to belong to the NCRIB, because of the added value members are getting from the council. Through this value addition we have been able to douse the negative views and a flurry of ill fillings that was the lot of many members about two years ago. We have given value in terms of training. We have also given value in terms of information sharing, leading to facilitation of business through public bids”, he noted.

  • Stanbic IBTC launches micro pension campaign

    Following the formal launch of the micro pension plan (MPP) by President Muhammadu Buhari on  March 28,  Nigeria’s biggest pension fund administrator (PFA), Stanbic IBTC Pension Managers Limited, has taken the lead to unveil a game-changing nationwide micro pension campaign tagged ‘Game Plan – Retire Well.’

    The Chief Executive, Stanbic IBTC Pension, Mr. Eric Fajemisin at the Media launch of Retire Well – Informal Sector Pensions Product held in Lagos, said the effort is aimed at sensitising and stimulating the informal sector not covered by the current Contributory Pension Scheme (CPS) to secure their buy-in into the pension scheme.

    He stated that the micro pension scheme, in furtherance of the policy direction and ongoing reforms of Nigeria’s pension industry to extend the coverage of CPS to the informal sector and among other initiatives, is geared at building on the achievements recorded with the pension reforms over the past few years and capable of putting the industry on stronger footing going forward.

    He reiterated the company’s support for the ongoing reforms and other PenCom initiatives it said were necessary to maintain the strength and depth of Nigeria’s CPS.

    He also expressed their readiness and commitment to contributing their quota by putting in place strategic industry stakeholder engagements on ways to boost wider participation by Nigerians.

    He added that the media launch of ‘Retire Well’ is their callout to stakeholders to secure their future and reinforce the need to save and plan for retirement, irrespective of the nature of their jobs or the profession they may find themselves in.

    He said: “It is all about taking a decision today by signing up for a retirement plan, making the right move now towards a secure future or simply put having a game plan. The ‘Game Plan – Retire Well’, is targeted at the various tiers of demography in the informal sector: the upper class/skilled workers, the middle class/semi-skilled, and the lower class/unskilled.

    “It is meant to insulate those not covered in the formal sector of the economy as well as income earners in every category against old-age poverty and would help in deepening asset accumulation in the country. According to him, the scheme will also help provide the crucial capital required for investment in critical sectors of the economy. As an initiative designed to cover an estimated 70 percent of Nigeria’s working population, currently in the informal sector, the scheme offers enormous benefits to the society, regardless of challenges associated with its seamless implementation.

    “Among its other benefits is improved standard of living for the elderly, safety of funds and access to other incentives, flexible contribution remittances, the opportunity to make withdrawal prior to retirement and the enhancement of financial inclusion in the country.”

    Executive Director, Business Development, Stanbic IBTC Pension Managers Limited, Mrs. Nike Bajomo said the company intends to create awareness across the country about ‘Game Plan – Retire Well’ – micro pension scheme to drive adoption even as the PFA continues to engage various stakeholders on developments in the industry to ensure that the provisions of the CPS are fully harnessed to the benefit of all. Such platforms as town hall meetings, stakeholder’s fora, associations’ meetings, public awareness programmes and exhibitions on TV, Radio & Digital media, among other initiatives Stanbic IBTC Pension Managers will be organised yearly to ensure regular engagement and to drive awareness.

    “The PFA will not relent in providing excellent services to its RSA holders and Nigerians. Stanbic IBTC Pension Managers Limited has over 1.7 million Retirement Savings Account (RSA) holders nationwide, with assets under management in excess of N2.8 trillion. It paid N3.26 billion to over 55,809 retirees in March, 2019 and has paid out over N635 billion to retirees since the PFA began operations in 2006.

    “Stanbic IBTC Pension Managers Limited is a subsidiary of Stanbic IBTC Holdings, a member of Standard Bank Group, a full service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management. The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade and deal flow between Africa, China and select emerging markets. Standard Bank Group is the largest African financial institution by assets. It is rooted in Africa with strategic representation in 20 countries on the African continent”, she noted.

  • AXA Mansard posts 26% gross premium increase

    AXA Mansard Insurance Plc has achieved a gross written premium of N33.9 billion in its financial year end 2018, up by 26 per cent from the N26.8 billion in 2017.

    The company’s net premium income grew by 43 per cent to N19.7 billion from N13.8 billion in 2017, while profit before tax rose by five per cent to N3.4 billion in 2018, from N3.2 billion in 2017.

    However, profit after tax was impacted by significant one-off tax provisions during the year, resulting in a seven per cent dip to N2.5 billion from N2.7 billion in 2017.

    The company closed the year with total assets at N73.8 billion, representing 11 per cent growth from N66.5 billion recorded in 2017, while shareholders’ funds grew by three per cent to N20.9 billion from N20.3 billion in the same period, remaining well in excess of regulatory requirements.

    The Chairman, Olusola Adeeyo who made this known at the company’s 27th Annual General Meeting held at Oriental Hotel, Lekki, Lagos, said the growth witnessed in gross written premium was supported by continued growth in their health business, making the company the health insurance industry leader while maintaining their position in other segments.

    On dividend, he explained that due to the guidelines for a Tier-Based Minimum Solvency Capital (TBMSC) Policy released  by the National Insurance Commission (NAICOM), they took strategic decisions to optimise their balance sheet to align with the guidelines in readiness for the implementation of the policy.

    He stated that although, the policy was later withdrawn and cancelled by the regulator, they had already taken the necessary actions on it.

    He disclosed that while the step taken had a significant impact on their working capital, they are confident that the benefits in terms of readiness to secure future business opportunities and ensure the continued profitability of the company far outweighs any short term impact.

    ‘’It is for highlighted reasons that we did not propose to pay dividends this year’’, he told the shareholders.

    The Managing Director, AXA Mansard, Kunle Ahmed, added that NAICOM had early in the first quarter of 2018, taken action to curb rate cutting in the insurance industry by releasing approved premium rates for compulsory insurance and gave directive to all insurance companies to be guided by the rates.

    Speaking on the performance ratio, he said their operating expense ratio remained relatively flat despite their growth, increasing marginally to 18 per cent in 2018

    He said this is positive outcome considering the growth of the top line and reflects their continued effort to ensure operational efficiency.

    “Our reinsurance cost ratio also increased marginally to 21 per cent from 20 per cent, as a result of changes made to treities and focus on the mid-size business segment which they expect will assist their quest to improve margins.

    Growth in total assets under management continued this year, with the business achieving growth of 40 per cent to N106.6 billion as at December 31, 2018, from N76.1 billion in the previous year”, he added.