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Tag: insurance firms

  • Bank MD to Insurance firms: invest in infrastructure development

    Insurance companies should invest massively in infrastructure development to broaden their asset and capital bases, a bank chief executive officer has said.

    Managing Director of The Infrastructure Bank (TIB) plc Mr Adekunle Oyinloye gave the admonition yesterday while giving a key note address at the Insurance Brokers’ Conference and Exhibition in Lagos.

    Oyinloye noted that despite the astronomical growth in the number of insurance companies from just one agency in 1918 – Royal Exchange Assurance Agency – to 56 now, the Nigerian insurance industry contributes a meagre 0.7 per cent of the total Nigeria GDP.

    “That is far beneath its capacity,” he said, noting that “in the United Kingdom, the insurance industry contributes about 20 per cent of the total GDP; In South Africa, it is 17 oer cent and in Kenya, 3.4 per cent”

    Oyinloye said infrastructure investments might present an opportunity for insurers to achieve the required yields to cover future liabilities and provide competitively priced products.

    “Infrastructure investments are an interesting option for an insurer’s portfolio, as they provide: Potentially lucrative risk-adjusted return on equity; Long-term risk exposure, which may provide a good match for long-term liabilities; Illiquidity and sector-diversity, which could increase portfolio diversification; and an opportunity to lend money to sectors in need of funding, leading to social and potentially reputational benefits.

    “With an estimated insurance penetration rate of 0.4 per cent and only 1 per cent of the Nigerian population holding any form of insurance policy, the opportunities in the Nigerian market are enormous, “The managing director said, adding: “when we compare the country’s insurance penetration to economies like Kenya and South Africa there is still further room for growth of the Nigerian insurance sector.”

    On the huge deficit in the nation’s infrastructure development sector,. Oyinloye said Nigeria needs an annual average of US$25 Billion for five years to enable the nation kickstart its infrastructure renaissance.

    Quoting from the nation’s National Integrated Infrastructure Masterplan, the managing director added that US$2.9 trillion will be required to build and maintain infrastructure in Nigeria in 30 years.

    “With the long-term nature of life insurance, retirement savings and pension annuities, the insurance industry is well positioned to participate in infrastructure financing of Private-Public Partnership (PPP) projects, given its need to match long-term liabilities with long-term assets.

    “There are unique opportunities for the industry to play a pivotal role in contributing private investment and sector expertise in long-term PPP infrastructure projects,” he said.

  • Insurance firms brace for emergency capital raising

    Insurance companies have launched plans for emergency fund raising at the capital market as consolidation looms in Nigeria’s most populous quoted industry. There are 27 insurance companies quoted on the Nigerian Stock Exchange (NSE).

    The Nation’s check at the weekend indicated that not less than five insurance companies have started fund raising, in what may become an industry-wide rush as the National Insurance Commission (NAICOM) moves to implement new capital requirements for the industry.

    Regulatory filing at the NSE indicated that directors of Royal Exchange Plc have scheduled an emergency board meeting next week to consider capital raising proposals and restructuring of the insurance-led investment group, especially with the impending implementation of the new capital requirements for the industry.

    The board of Royal Exchange would review proposed investment in the company and other restructuring issues as well as the NAICOM’s tier-based minimum solvency capital policy for the insurance industry.

    Already, directors and other insiders in Royal Exchange have been notified of the emergency meeting and the fact that members of the board and other insiders must not trade on their shareholdings until after the announcement of the decision at the board meeting.

    Shareholders of Sovereign Trust Insurance Plc are expected to ratify capital raising plans by the board of the company later this month at the annual general meeting in Lagos. In preparatory steps to capital raising, Sovereign Trust Insurance plans to create 5.0 billion new ordinary shares of 50 kobo each to increase its authorised share capital to N10 billion of 20.0 billion ordinary shares of 50 kobo each.

    Shareholders would also consider a proposal to raise “additional equity capital for the company up to the maximum of the authorised share capital” with additional mandate to the board to absorb excess money in the event of oversubscription of the initial offer. Sovereign Trust Insurance may be raising funds by issuing new shares to existing shareholders, new general retail investors, existing and new strategic investors or a combination of many means of capital raising.

    Mutual Benefits Assurance is already raising N2 billion in new equity funds through a rights issue to existing shareholders. Mutual Benefits Assurance is offering 4.0 billion ordinary shares of 50 kobo each to existing shareholders at 50 kobo per share. The rights issue was provisionally allotted on the basis of one new ordinary share of 50 kobo each for every two ordinary shares held as at the close of business on November 1, 2017.

    Application list for the rights issue, which opened on Monday August 6, 2018, will close on Friday, September 14, 2018.

    Under the new NAICOM’s tier-based minimum solvency capital policy, insurers will be classified into three tiers according to the minimum capital base and risk-bearing capacity. Tier 1 insurance companies are required to have minimum capital base of N9 billion for general insurance and N6 billion for life insurance, implying a composite capital base of N15 billion. Tier 2 companies are divided into two categories, with N4.5 billion minimum capital base for general insurance and N3 billion for life assurance. Thus a composite insurance-general and life insurance, will be required to have minimum capital base of N7.5 billion. Tier 3 companies will continue to operate on the existing minimum capital base of N3 billion for general insurance and N2 billion for life insurance, implying a composite capital base of N5 billion for a composite tier 3 insurance company.

    Under the risk-based capitalisation approach, tier 1 companies will be able to undertake all risks including annuity and high-level special risks such as energy and aviation risks. Tier 2 companies will undertake retail insurance as prescribed under Tier 1, including commercial and industrial risks and group life assurance while tier 3 companies will only be able to write retail insurance only including micro insurance, motor, fire, agriculture, compulsory liability insurances, individual life, health and miscellaneous insurance.

    The industry consolidation is expected to heighten balance sheet restructurings in the industry as insurers take bold measures to address bubble shares and negative hangover. Prestige Assurance had recently cancelled about 1.6 billion ordinary shares of 50 kobo each under a capital restructuring programme aimed at removing bubble assets.

    Goldlink Insurance Plc plans to cancel about 743.18 million ordinary shares of 50 kobo each allegedly issued inappropriately to some selected shareholders without due consideration. The resolutions for the cancellation have been approved by shareholders of the company and the shares from the cancelled allotment will be returned to the unissued shares of the insurance company.

     

  • NIRSAL, insurance firms to support 16,954 farmers

    The Nigerian Incentive Based Risk Sharing Sys-tem for Agricultural Lending (NIRSAL) and insurance firms are partnering to support 16,954 smallholder farmers, NIRSAL’s  Managing Director, Aliyu Mohommed, has said.

    Mohommed, who stated this at a forum tagged: NIRSAL Accelerating Growth of Agriculture Insurance in Nigeria, said the scheme will take about N2.753billion. He stated that this will be the most advanced and innovative agriculture insurance product ever offered on a large scale on the African continent to date.

    He said:  “Having a group of insurance companies working together gives further comfort. Going forward, in the 2018 wet season, the Central Bank of Nigeria  (CBN’s), Anchor Borrowers Programme (ABP) and NIRSAL plan to support about 500,000 smallholder farmers cultivating over 600,000 hectares with target grain product equivalent of 1.5million  metric tons valued at N90,000 per ton, producing a gross revenue of N135billion and supporting over 2.5million people and families.”

  • NAICOM: insurance firms must consolidate

    NAICOM: insurance firms must consolidate

    There is an urgent need for insurance firms in the country to consolidate, the National Insurance Commission (NAICOM) has said.

    Commissioner for Insurance, Mohammed Kari who spoke while addressing insurance operators at the Nigerian Council of Registered Insurance Brokers (NCRIB) Members Evening in Lagos yesterday, said aside from the underwriters, all other insurance operators especially brokers would also need to consolidate.

    Kari said the resolution to consolidate was reached and agreed upon by the regulator and operators at the Insurers Retreat held in Abeokuta, Ogun State.

    He further advised operators who are seeking or may want to seek for a new operating licence to acquire some of the existing weak operators in the industry, adding that consolidation will enable the companies to get enough financial strength.

    Kari lamented that only between six and seven companies, out of 27, have paid dividend to their shareholders in the last three years.

    He said: “For those of you who are interested in the stock exchange, you know that they have removed the bottom. So, the retreat in Abeokuta came to the conclusion that there is need for consolidation. When the roadmap is concluded, we will come out with some directives and policies on how underwriting will be consolidated.

    “This is to enable the companies strengthen themselves financially or otherwise. If it becomes impossible financially, then we will do what is necessary. Not many companies have low reserve like one of them that continued to pay dividend. There can be no attraction to investors if you don’t pay dividend or if your trade is not marketable for trading. We found that out of 27 companies, only six or seven have paid dividend in the last 3 years.

    “There are no attractions to investors if you don’t pay dividend or if your trade is not marketable for trading. With the stop gap to share price removed, it means you have no cap price and you can go down to zero. We cannot allow or afford our market be exposed this way. So the insurance companies have seen sense in consolidation and I hope you brokers too will see sense in consolidation.”

    He stated that since 2008, only one insurance licence, aside Takaful and micro insurance, has been issued by the Commission.

    “The reason is not because we don’t want to see companies getting new license but we realised that after the last consolidation exercise, the so-called composite operation is a misnoma. By law, some claims were not cleared whether you can have general business, life business or composite business. We decided going forward that there can only be one or another but not composite.

    “The reasons are numerous and they are subject of another retreat.  But since we don’t issue new licence now, I will advise companies looking for fresh licence to look for somebody to acquire. The good thing is that the industry almost unanimously agreed that there is need for consolidation. At least, at the underwriter level, I wouldn’t mind consolidation at brokers level too but this is a free country and you can do what you like according to what the law provides. But we said in Abeokuta that if you don’t do it voluntarily, you will do it compulsorily.

    “We believe that there should be a consolidation of operations at all the insurance levels in Nigeria. At the underwriters level, we have companies that cannot pay salaries and claims,” he said.

     

  • NAICOM fines insurance firms N1.4b for infractions

    The regulatory body of the insurance sector, the National Insurance Commission (NAICOM), has fined some insurance firms over $4 million (N1.46 billion) as penalties for various infractions.

    The Commissioner for Insurance, Mohammed Kari, who stated this  over the weekend at a two-day seminar for insurance correspondents  in Benin, the Edo State capital, said NAICOM will up its ante this year.

    Kari,  who was represented by the Deputy Commissioner, Technical, Thomas Sunday, said the Commission has stepped up its regulatory action and, saying there would be no sacred cows anymore in the sector.

    He pointed out that any operator that defaults, will be given opportunity to defend itself, but would be made to pay the price if found to have defaulted, stressing that adequate warnings have been given to the operators.

    Speaking on some areas where the Commission has issued warnings to operators, he said operators were in the past granting blind insurance covers to clients without having information, or data of the type of risks they were insuring, pointing out that the Commission is trying to eliminate blind covers that have caused the industry a lot of trouble.

    He said: “For instance, insurers grant covers to government agencies and parastatals without knowing, or having the data of workers to be covered.’’

    He added: “But no company will dare do it again because we have issued circulars to them to stop such transactions from occurring again. They must not even insure the Ministry of Defence without having their information otherwise insurance cannot be granted.

    “There is no where in the world where blind covers are granted. We have step into it and have issued appropriate circulars warning the underwriters and we are sure they heard us very clearly.’’

  • NAICOM decrees rates for insurance firms

    The insurance industry now has a uniform premium rate for all compulsory classes of insurance products.

    The Commissioner for Insurance, Mohammed Kari, made this known yesterday.   through a circular titled: “NAICOM/AEtP/CIR/12/2018, to all insurance institutions in the country, saying the approved rates became effective from January 1, this year.

    He said the rates will form the premiums insurance companies will charge clients, going forward.

    He stated that the rates were released to the operators as part of efforts to curb the increasing challenge of rate cutting in the sector.

    Kari said: “The Commission has released approved rates for compulsory insurances which include Group Life, Builders’ Liability, Occupier’s Liabilty, Motor Third Party and Healthcare Professional Indemnity Insurance to the operators.

    “Every operator is guided by these rates in their various transactions. Going forward, the commission shall strictly monitor and enforce compliance.”

    Also speaking, the commission’s Head of Corporate Affairs, Rasaaq Salami, said the operators have always had the rates for the compulsory insurances among themselves but they don’t comply with it.

  • Insurance firms yet to return Fed Govt’s N25b pension fund, says PTAD

    Insurance firms yet to return Fed Govt’s N25b pension fund, says PTAD

    Over N25 billion of  pension funds from the Defined Benefit Scheme (DBS) is still being owed by some insurance firms, the Executive Secretary, Pension Transitional Arrangement Directorate (PTAD), Mrs Sharon Ikeazor, has said.

    She was highlighting  the progress made by the Directorate in her 11 years of assuming office as the Executive Secretary at the just concluded 20117 Conference of the National Association of Insurance and Pension Correspondents in Lagos.

    Nine out of 12 firms are holding the funds. The one year deadline given to the defaulting firms would expire next month.

    Mrs Ikeazor said the PTAD had given the insurance companies one year  to repay the monies owed, considering that the monies had been with them since 2015 and they knew they were to hand over to PTAD since then.

    According to her, PTAD is liaising with the National Insurance Commission (NAICOM) for regulatory support as it may be compelled to take legal action and include the Attorney-General of the Federation and agencies such as the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices Commission (ICPC) to help recover the funds.

    She stressed that while some of the affected companies had complied, some of them said they would not be able to meet the December deadline .

    She said: “Among companies that have complied are Leadway Assurance with full payment of N33.3 million and  AIICO Insurance, which complied in form of transferring properties and investments worth N1.5 billion.

    “NICON Insurance substantially complied transferring fixed assets worth N13 billion to PTAD. The value placed on them are yet to be verified and reconciled. The Federal Ministry of Works and Housing is carrying out the valuation of those assets to determine their actual value. As at 31st August, 2017, the sum of N6.422 billion is in the Legacy Fund (e-payment) with the Central Bank of Nigeria.

    “PTAD has entered the enforcement stage in the recovery process against defaulting insurance companies. The final Demand Notice was served in October.”

    She urge the defaulting companies holding legacy funds to pay up to enable the PTAD deal promptly with the inherited liabilities.

    She listed the Directorate’s areas of success since she assumed office as prompt payment of monthly pensions; completion of the verification process for the civil service and parastatals; automation of the pension payment processes and the use of Government-Integrated Financial Management System (GIFMIS) and tackling pension scammers and fraudsters.

    The Directorate, she said, has also paid outstanding arrears, including the 33 per cent arrears and recovery of legacy funds from insurance companies.

  • Four insurance firms pay N24.9m fine

    Four insurance firms pay N24.9m fine

    African Alliance Insurance Plc, Cornerstone Insurance Plc, Equity Assurance Plc and Great Nigeria Insurance Plc have paid a total fine of N24.9 million fine to the Nigerian Stock Exchange (NSE) for filling their audited and interim financial statements after the expiration of the regulatory due date of March 31, NSE Compliance report as at February 17,  has shown.

    According to the NSE, the  sanctions were applied in accordance with the provisions of Section 14 of Appendix 111 of the listing rules.

    It stated that the fine came as a result of sanctions imposed  for default in submission of their financial statements for December 31, 2014 and first, second, and third quarter accounts as at due dates.

    Out of the fine, African Alliance got N4.2 million for failing to file its December 31, 2014, first quarter 2015 N3.3 million, second quarter N2.9 million and third quarter N1.6 million.

    Cornerstone Insurance Plc was fined N700,000 for failing to submit December 31, 2015 financial statement.Equity Assurance Plc was punished twice for failing to submit December 31, 2015 and first quarter 2016. The company was fined N600,000 and N500,000.

    Great Nigeria Insurance Plc was sanctioned four times. The periods of sanction are: December 31, 2014-N3.8 million, first quarter 2015-N3.8 million, second quarter 2015-N2.5 million and third quarter 2015-N1.2 million.

    Commissioner for Insurance Mohammed Kari said shareholders need to query insurers on why fines were imposed on them by regulatory agencies.

    He said the sanctions for any default or infraction by an operator are spelt out in the laws to the knowledge and understanding of the operators.

    This, he stressed, may not be perfect, but as long as it remains the law, its provisions must be complied with and it is the responsibility of NAICOM, as the statutory regulatory agency of the sector to ensure that every operator plays by the rule.

    He called on shareholders to demand explanations from their board of directors and management why such penalties are placed on them; incur high management expenses; fail to take advantage of the huge potentials in the market and the various market development initiatives introduced by NAICOM to expand their businesses, grow their revenue income and improve on their bottom-line to guarantee enhanced dividend payout to their shareholders.

    “We are looking at these details and may be making them public in due course,” he added.

  • Top 10 insurance firms emerge

    Top 10 insurance firms emerge

    THE  top 10 insurance firms in the country have emerged.

    They were unveiled by the Nigeria Insurance Digest 2014, published by the Nigerian Insurers Association (NIA).

    The firms are Leadway Assurance Limited, AIICO Insurance PLC, Axa Mansard Insurance PLC, Custodian & Allied Insurance Plc, Mutual Benefits Assurance Limited, and Niger Insurance PLC.

    Others are African Alliance Insurance PLC, NEM Insurance PLC, Zenith General Insurance Company Limited and Sovereign Trust Insurance PLC.

    According the Nigeria Insurance Digest’s report the firms distinguished themselves through hard work and proper planning.

    A breakdown of the report shows that Leadway Assurance came first with market share of 13.29 per cent in the year under review. The underwriting firm recorded N39.01 billion gross premium.

    AIICO Insurance came second with 11 per cent market share and a record of N33.27 billion.

    Axa Mansard Insurance was number three on the list with 5.77 per cent market share with N16.94 billion gross premium. Custodian & Allied Insurance came fourth with 4.79 per cent market share and N14.06 billion gross premium while Mutual Benefits Assurance Limited came fifth with 3.87 per cent market share and N11.35 billion gross premium.

    Others are Niger Insurance – 3.77 per cent market share and N11.06 billion; African Alliance Insurance Plc, 3.45 per cent, N10.31 billion; NEM Insurance, 3.22 per cent, N9.45 billion; Zenith General Insurance Company Limited, 2.63 per cent, N7.72 billion and Sovereign Trust Insurance, 2.48 per cent, N7.29 billion.

  • Auto accidents: Insurance firms,AGPMN sign MoU

    Auto accidents: Insurance firms,AGPMN sign MoU

    A group, Eagle Search and the Association of General and Private Medical Practitioners of Nigeria (AGPMN) have signed a memorandum of understanding (MoU) that will allow accidents victims across the country to receive prompt medical attention.

    Also in partnership in the scheme are 13 insurance firms and brokers technology firms and banks, including Chams Access, Premium Manifest Alert, Digital Torch, Interswitch, Zenith Bank, Webplanet Consult, Leadup, Investments and Micadans Ltd.

    Its Group Coordinator General, Mr. Sunday Ajanaku, who spoke in Lagos, said the need for the organisation to implement the scheme for the benefit of all Nigerians was borne out of the desire and passion for the generality of accident victims irrespective of the nature.

    He lamented that several lives had been lost because there was no prompt medical attention to victims, adding that  subscribers to the scheme will begin to receive financial assistance and many other benefits attached with the Social Security and e-Manifest Card which members will be issued to them.

    According to him, victims who subscribe to the initiative will now receive prompt and free medical treatment at all Federal Medical Centres, specialist, teaching and general hospitals, health centres and additional 12,000 designated private hospitals of AGPMPN members.

    He said: “This scheme will create about 25,000 jobs across the 37 states of the federation, including Abuja. This is because young school leavers will be employed as data field officers. This will help reduce crime rate among youths. The scheme will become operational throughout the federation from second and third quarter of this year after the recruitment and orientation exercise.

    He explained that the e-Manifest Card are in different categories which he said take care of all the strata of the society beginning from infants to the aged.

    He said: “We hereby appeal to all our operational partners including the insurance companies, military personnel, all security operatives, the Federal Road Safety Commission (FRSC), National Emergency Management Agency (NEMA) and its sister agencies at the state level,  state Ministries of Health, legal practitioners, media houses (print and electronics). We never forget the less privileged consisting of rural and urban poor parents, guardians, school owners,  teachers, students, artisans, market  men  & women, motor bike and tricycle operators, drivers, farmers, civil servants, corporate organisations and individuals to key into the social security and e-Manifest Card Scheme at an annual token when the registration begins.”

    He said the scheme will be available in both off /online registration, adding that the project was designed for economic benefits of every one that would be fortunate to have the Social Security or E-Manifest Card particularly the indigent Nigerians that never prepared for untimely financial responsibilities.

    He said: “Imagine, when the bread winner or the only child in a family gets involved in an unfortunate accident and unprepared emergency situation occurs without timely medical treatment or financial assistance to such victim[s] how would the victim feel? These ugly situations are happening around us every second of lives”.

    He said the organisation enjoins the general public, intra state travellers, traders, market men/women and individual mobile phone subscribers that had a mobile insurance policies/passenger’s manifest with banks, network  providers, private and public motor parks across the country to report any accident and related challenges such as medical expenses/bill, hospital treatment and other accidental claims from the policy underwriters, service providers, banks, private and public motor parks nationwide.

    “We assure the general public that the organisation will keep to its responsibilities under the scheme and will remain committed to the social security of life and properties of all Nigerians in our communities with frequent meeting with our operational partners as well as adequate sensitisation lectures  for our social service & field data workers and cyber cafe  centre/agents to enable them get  acquainted with the scheme to meet immediate needs of all Nigerians,” he said.