The Nation Newspaper

Tag: Insurers

  • ‘African insurers may lose $1b on mega ships’

    African insurance industry may need to prepare for over $1 billion loss in future due to piracy attacks on mega ships, Allianz Global Corporate & Specialty, has said.

    Allianz made this known at the African Insurance Organisation Conference in Marrakesh, Morocco while briefing journalists on key findings of the Allianz Safety & Shipping Review 2016 report.

    In the report, Allianz said that progress continues on piracy in Africa with incidents down in Nigeria and Somalia. It noted that although piracy risk remains high, attacks continue to increase in South Asia.

    The report said: “Crew kidnapped and held for ransom, doubled to 19 in 2015 with all the result of five attacks off Nigeria. During 2015, risks to shipping in the Middle East Gulf and surrounding waters escalated as politically-charged disputes took hold.

    “In Yemen, the ongoing war and blockades had not affected ships sailing through the Gulf of Aden at time of writing, but calls at the country’s ports had been curtailed, with Aden accepting a fraction of the calls it handled before the dispute. In North Africa, the Egyptian Armed Forces officially declared a “state of war” in July 2015. Again, the war and disputes there had not had a notable effect on shipping, but with Egypt’s control of the critical shipping point, the Suez Canal, shipping is keeping a watchful eye on events in this country.

    “Operators must remember that the provision of war insurance does not mean that the taking of cargo from this area is safe; insurance should not be viewed as a safety blanket. The industry may need to prepare for a $1billion+ loss in future due on mega ships.

    “Cyber-attacks on the shipping industry are often under-reported as companies opt to deal with breaches internally for fear of worrying stakeholders.”

  • ‘Fed Govt owes Armed Forces insurers 2013 premium’

    ‘Fed Govt owes Armed Forces insurers 2013 premium’

    The Federal Government is owing insurers and brokers’ premiums for 2013 Group Life Insurance Policy (GLIP) of the  Armed Forces, Defence Spokesman, Colonel Rabe Abubakar, has said.

    Abubakar, who made this known in an interview, however, said efforts were on to ensure that the premium was paid to the brokers to enable them pay beneficiaries of the deceased.

    He appealed to the next-of-kins of the deceased soldiers affected, to be patient, assuring that they would receive their payments soon.

    He said: “We have Group Life Insurance Policy for our soldiers and it covers those who died in active service. The policy was given to brokers accredited by the Defence Ministry.

    “All premiums have been paid except 2013 premium, but we are making efforts to ensure that we pay the premium to the brokers so that they can begin to pay claims to the affected beneficiaries.

    “The leadership of the military is very concerned because the welfare of the military is very compulsory. We are trying to solve the problem within the shortest possible time,” he said.

    Earlier, the Minister of Finance, Mrs. Kemi Adeosun, said the Federal Government is owing insurance industry cumulative premium in excess of N10 billion.

    She said the government was conscious of its debt to the sector and would endeavour to offset outstanding premiums as soon as the economic situation improves.

    “The government, meeting its responsibility of paying premiums to some extent is a challenge; you will also agree with me that there is a serious situation in the country in terms of revenue that accrues to government.

    “The tasks ahead are onerous and it is the expectation of government that the Nigerian insurance industry should wake up to its responsibilities and as a potential growth area of our economy, it must accept the challenges of change.

    “It must surmount its timidity, shape up and contribute to the turnaround of the economy. It must contribute positively to the Gross Domestic Product (GDP) and the creation of employment. It can achieve these by cleaning itself of the bad eggs within itself and by improving its services to its consumers.”

    Commissioner for Insurance, Alhaji Mohammed Kari, also said the industry has made frantic efforts at recovering the Federal Government’s outstanding premium owed to the insurance companies.

    Kari said the Commission is looking at reviewing Federal Government insurance policies to meet the desired requirement of insurance.

  • Storm: U.K. insurers may face $2.2b claims, says KPMG

    Storm: U.K. insurers may face $2.2b claims, says KPMG

    United Kingdom (UK) insurers may face claims totalling 1.5 billion pounds ($2.2 billion) from businesses and homeowners for damage caused by two storms in December, last year, according to consultant KPMG LLP.

    Bloomberg reported that heavy rain and flooding is estimated to have caused a loss of 5.8 billion pounds to the economy, quoting the London-based consulting company. Storm Eva and Storm Desmond have damaged homes and disrupted business activities across northern England, Wales, Scotland and Ireland.

    “In 2007, when a similar pattern of flooding hit, total insured claims were 3.2 billion pounds. However, we consider that the actual financial impact far exceeded this,” Justin Balcombe, KPMG’s U.K. head of general insurance management consulting, said in the statement.

    “We are assessing this month’s events through a number of economic lenses, resulting in an initial total cost estimate of 5 billion pounds to 5.8 billion pounds.”

    PricewaterhouseCoopers LLP estimated economic losses of as much as 1.3 billion pounds, with the insurance industry bearing up to 1 billion, according to a December 27 report published on the consultant’s website.

    “If rain continues to fall in large quantities, and the areas with warnings in place do indeed flood significantly, it could well be that the total economic losses could breach 1.5 billion pounds with an additional significant increase in insurer losses from our initial estimate,” Mohammad Khan, general insurance leader at PwC, said in the report.

    Storm Frank is due to hit the west of the U.K. from with strong winds and heavy rain, the Daily Telegraph reported. Widespread gusts of up to 65 m.p.h. are expected, with exposed areas — particularly in northwest Scotland and later Shetland —likely to endure fierce gales up to 80 m.p.h., the paper said.

  • Insurers warned against unethical practices on annuity

    Insurers warned against unethical practices on annuity

    Insurers selling life annuity products should desist from operating against stipulated laws guiding products when marketing retirees, the Director-General, Lagos State Pension Board (LASPEB), Mrs. Folashade Onanuga has warned.

    She gave this warning while speaking at a forum in Lagos. According to her, some life insurance operators engage in unwholesome practices in order to sell their annuity products against the other available option for periodic pension payments, the programme withdrawal.

    She stressed that they pass wrong information to the retirees thereby confusing them and not making them make the right choices.

    She noted that her office had been approached by some retirees who claimed that some insurers have promised them things not stipulated in the laws. She called on all operators in the pension business to play the game according to stipulated laws and refrain from such vices.

    Retirees are entitled to a lump sum (LS) and periodic pension payments. The periodic payments are either accessed as Programmed Withdrawal (PW) or Annuity, depending on the retiree’s choice.

    PW is a payment mode offered by Pension Fund Administrators (PFAs) and regulated by the National Pension Commission (PenCom) while Annuity is a payment mode offered by insurance companies, regulated by the National Insurance Commission (NAICOM).

    A life annuity is an annuity, or series of payments at fixed intervals, paid while the purchaser or annuitant is alive. A life annuity is an insurance product typically sold or issued by life insurance companies.

    Life annuities may be sold in exchange for the immediate payment of a lump sum as single-payment annuity or a series of regular payments, prior to the onset of the annuity.

    The payment stream from the issuer to the annuitant has an unknown duration based principally upon the date of death of the annuitant. At this point the contract will terminate and the remainder of the fund accumulated is forfeited unless there are other annuitants or beneficiaries in the contract.

    Thus a life annuity is a form of longevity insurance, where the uncertainty of an individual’s lifespan is transferred from the individual to the insurer, which reduces its own uncertainty by pooling many clients. Annuities can be purchased to provide an income during retirement, or originate from a structured settlement of a personal injury lawsuit.

  • Be customer-centric, insurers urged

    Insurance firms need to be customer-centric in order to achieve desired result for the insurance sector. An expert on customer service and business etiquette at the enterprise development center,  PAN African University, Mrs Ekaete Augustine-Edet, said this.

    She made this known in Lagos on last week while speaking at the Almond 2015 Insurance Consumers’ Forum.

    She noted that insurance firms, including underwriters, brokers and agents, must join hands to ensure customer satisfaction.

    She stressed that the operators should also consider value when designing products for groups and individuals in the country.

    She said: “No business today can afford to ignore two very important people: the customer and the competitor. Organisations that focus hard on the quality of service they provide grow faster, sometimes twice as fast as the competitor in the market place.

    “Customer Service is key to the success of any orgnisation. It is the act of taking care of the customers’ needs by providing and delivering professional, helpful and high quality products and services.”

    Chief Executive, Almond Productions Limited, Faith Ughwode, in her address, said their strength over the years has been drawn from their  passion for the Insurance industry, including the indispensable insurance consumers and the organised champions of Consumer Rights Advocacy and the support of stakeholders.

    Her worsds: “No doubt, with the actualisation of this third edition, the forum now stands on a tripod with a firmer commitment to pursue its original objective, which is hinged on the promotion of a customer-centric Insurance Industry.

    “This objective has informed our theme for this year’s forum: Customers Relationship and Management in the Insurance Industry. Insurance being an intangible product, operators must see and treat their customers not just as kings but, “super kings”.

    Ughwode said she was elated by the increasing relevance of the industry in the scheme of things, adding that the media have been contributing relentlessly to the much desired insurance awareness campaign, which is helping to make the difference today.

  • Equities lose N283b as banks, insurers slump

    It was another major rout for Nigerian equities last week as intense selling pressure dwarfed impressive corporate earnings and bargain-hunting by long-term investors to shave off N283 billion from quoted companies’ market capitalisation.

    Both the aggregate market value of quoted equities and the All Share Index (ASI), the value-based benchmark indices that tracks prices of all quoted companies on the Nigerian Stock Exchange (NSE), indicated a week-on-week decline of 2.69 per cent last week. The market had lost 2.34 per cent in the previous week.

    The downtrend last week further depressed the negative average year-to-date return at the Nigerian stock market to -13.79 per cent. With inflation at 9.2 per cent, inflation-adjusted return opens today at -22.99 per cent. The recession has been compounded by foreign exchange crisis and high cost of funds, which have kept many foreign and domestic investors on the sideline.

    With 61 losers, 11 gainers and 118 stagnant stocks, aggregate market value of all quoted companies on the NSE nose-dived to N10.241 trillion at the weekend as against its week’s opening value of N10.524 trillion. The ASI, which doubles as Nigeria’s sovereign stock market index, closed below its 30,000 psychological point at 29,878.33 points, 827.29 points or 2.69 per cent below its week’s opening index of 30,705.62 points.

    Price trend analysis showed that financial services stocks were the worst in the market-wide depreciation, losing nearly twice the average loss for the market. In spite of half-year earnings and interim dividends by banks, including Guaranty Trust Bank and Access Bank, the NSE Banking Index indicated a week-on-week decline of 4.46 per cent, the highest by any tracked sectoral group. The NSE Insurance Index trailed with a negative return of -4.41 per cent, an unusually large discount for an industry mostly trading at nominal values.

    All other indices showed widespread price depreciation across the sectors. The 40-stock NSE Pension Index, which has significant exposure to financial services stocks, dropped by 4.17 per cent. The NSE 30 Index, which tracks the 30 most capitalised stocks, and the NSE Industrial Domestic Index, which contains Dangote Cement, NSE’s most capitalised stock, mirrored the overall market position with average decline of 2.68 per cent and 2.69 per cent respectively. Losses by Oando and Seplat Petroleum Development Company pressured the NSE Oil and Gas Index to a negative close with average return of -2.73 per cent. The NSE Consumer Goods Index dropped by 0.39 per cent while the NSE Lotus Index, which tracks Islamic-compliant stocks, and the NSE ASem Index, which tracks second-tier stocks, declined by 0.20 per cent and 0.21 per cent respectively.

    Level of activities was above average, driven largely by acquisition trading in the insurance sub-sector and large-volume transactions in the banking sub-sector. Total turnover rose to 4.30 billion shares worth N20.05 billion in 20,219 deals last week as against a total of 1.36 billion shares valued at N12.48 billion traded in 17,867 deals two weeks ago.

    With the acquisition deal on Equity Assurance, the financial services sector accounted for 4.01 billion shares valued at N11.01 billion through 12,655 deals; representing 93.26 per cent and 54.91 per cent of the total equity turnover volume and value respectively. The conglomerates sector staged a distant second with a turnover of 106.98 million shares worth N342.65 million in 1,151 deals. The third place was occupied by the consumer goods sector with 53.38 million shares worth N4.69 billion in 2,856 deals.

    The trio of Equity Assurance Plc; Access Bank Plc, and United Bank for Africa Plc jointly accounted for 3.25 billion shares worth N4.08 billion in 2,830 deals, representing 75.53 per cent and 20.36 per cent of the total equity turnover volume and value respectively.

    The other non-ordinary shares segments continued to tag along. A total of 2,556 units of Exchange Traded Products (ETPs) valued at N981, 146 were traded in 17 deals last week compared with a total of 55,201 units valued at N2.905 million traded in 30 deals in previous week.

    At the Federal Government’s bond market, a total of 7,375 units of Federal Government’s bonds valued at N7.766 million were traded in seven deals last week in contrast with a total of 11,000 units valued at N12.346 million exchanged in four deals two weeks ago.

    Analysts at Financial Derivatives Company (FDC) said the market position had been worsened by many unimpressive corporate earnings. “The half-year 2015 earnings season commenced in the month of July and many listed companies released their corporate results for the period. In line with expectations, most results were unimpressive. Equity markets starved-off system liquidity as fixed income securities became the preferred investment instruments if investors,” FDC stated.

    Analysts at Afrinvest Securities said the market trend could remain unchanged in the meantime. “Given the sustained run of losses in the market and the absence of a catalyst to excite investors, performance is expected to be driven by speculations in the short term, thus, we advise investors to maintain medium to long term investment horizons,” Afrinvest Securities said at the weekend.

     

  • Embrace change, Kari urges insurers

    Embrace change, Kari urges insurers

    The insurance industry cannot be left behind from the wind of change blowing in the country, the new Commissioner for Insurance, Mohammed Kari has said.

    He made this statement while delivering a keynote address at the Investiture of Lady Isioma Chukwuma as the 47th President of the Chartered Insurance Institute of Nigeria (CIIN).

    While seeking support of the operators in piloting the affairs of his new responsibilities, he urged the CIIN to uphold and encourage its members to adhere to the observance of the industry’s codes of conduct and ethics for a healthy practice in the profession.

    He said as a regulator,  NAICOM is committed to high standards of professionalism and ethical behaviour in the industry so as to regain the confidence of policyholders and increase insurance contribution to the Gross Domestic Product (GDP).

    He said if the industry must win the public’s confidence,  operators must desist from unwholesome practices in the discharge of their responsibilities to the insured by playing as true professionals.

    He said: “Developments in the country obviously call for our collaborative effort to reposition the profession and the industry. We should not be unmindful of the perception of the profession by the public.

    “The apathy towards insurance and the way and manner the profession is being addressed, need a rethink from all of us. We all know the whys and let us discuss dispassionately and agree on the hows of correcting the wrong perceptions.”

    Kari referred to a paper presented by the Managing Director, Soveriegn Trust Insurance Plc, Wale Onaolapo’, titled: The test of professionalism in the insurance industry, 2006.

    Onaolapo summarised the common conditions in judging a profession as “an organised body of knowledge, client or member recognition of the authority of the profession, a code of ethics, and a professional culture nurtured by professional associations”.

    This conditions-are so basic that one wonders why we – would select to be in a profession, yet refuse to recognize its ethics, culture and its authority.

    He said the best approac  is  for the professionals to do it themselves. Left undone, the regulator has no option but to ensure it is done. There is need for a reawakening to ensure only trained personnel are allowed to practice. You will agree with me that insurance services are being rendered by persons and bodies without adequate-training.

    “We must embrace professionalism as core value in our industry. To achieve that, we must train all persons that carry our flags to our consumers. As the Professional arm of the industry, indiscipline and unethical practices by members should be of grave concern to the institute.”

    He stated that insurance practitioners and professionals should be seen to uphold the tenets of the profession, both in their words and actions adding that it is not enough for the Institute to breed and certify insurance professionals only, but must also ensure that they are regularly updated through training and retraining to enable them measure up with current global trends.

    He stressed that training should be of paramount importance to the institute for the development of practitioners.

    “To this end, we already have held preliminary discussions with the Rector of the Centre for Insurance and Financial Management Studies (CIFMS), towards developing acceptable curriculum for the training of different level of practitioners and an annual mandatory refreshers training thereafter.

    ‘’I would want to see the institute become a one stop shop for the teaching of good ethics and building good characters as it relates to the practice of insurance. Insurance practitioners should always imbibe the spirit of professionalism in their dealings. If we truly practice as professionals that we say we are, we should be mindful of our actions and how we carry ourselves. We should be seen as men and women of proven integrity, we should avoid unethical practices because it will not only send bad signals to the public, it will further erode the little respect left.’’

    He continued: “Perhaps, by these remarks, I may have started setting the agenda for the in- coming President and Chairman of Council. Lady Isioma Chukwuma is a woman well known within the industry and beyond, and I believe she would be able to consolidate on the achievements of her predecessor as well as confront the various challenges bedeviling the industry at the moment.

    ‘’She is in a position to give the insurance industry purposeful and disciplined leadership. cal behavior in the insurance industry so as to regain the confidence of policyholders and increase insurance contribution to the GDP. If we must win the public apathy to the business of insurance. we must’ desist from unwholesome practices in the discharge of our responsibilities to the insured by playing as true professionals.’’

  • Chams to insurers: deploy IT tools to deepen penetration

    The founding Managing Director, Chams Plc, Sir ‘Demola Aladekomo, has urged insurers to explore the use of information technology (IT) tools to deepen penetration and fully optimise the huge potential of the sector in the country.

    He said with IT tools deployment, insurance would be seen, felt and sold like commodity which it actually is. It would be sold everywhere, he argued.

    He said: “There is a need for insurance companies and its professional bodies to leverage this (IT) platform by partnering with relevant companies and agencies in the technology sector to create and provide specialised services which would help update their internal and external operations.”

    With the swift accessibility of information and automation of business processes made possible by technology, Aladekomo urged insurance companies to take advantage of IT tools such as mobile phones, automated teller machines (ATMs), Point of Sale Terminal (PoS), online retail websites and kiosks to offer real-time services and products to members of the public for market penetration to expand their businesses to new frontiers.

    Speaking as guest speaker in Abuja during Insurance Industry 2015 Mega Conference, he listed ways through which risk-bearing companies can effectively leverage on IT tools to promote their products and services in the market considering the massive adoption of technology tools in the country.

    Represented at the conference by the Managing Director, Chams Access Limited, Funke AlomoOluwa, who delivered a paper titled Information Technology as a Strategy for Market Penetration and Expansion, Aladekomo urged insurance companies to develop vibrant digital marketing strategies and become more visible on social media platforms by interacting with their followers and the entire online community to sensitise them on the need to pick up an insurance plan.

    Aladekomo, who is the former president, Nigeria Computer Society (NCS) and Chair,  Smart City Resort Plc, said insurance companies could maximise the use of IT in building an efficient data base, conducting data analytics and recovery of lost items via systematic tracking.

    Smart City Resort Plc is the holdng company for the SmartCity Innovation Hub. The SmartCity Innovaton Hub is an A-grade technology development infrastructure promoted by the NCS, Association of Telecommunications Companies of Nigeria (ATCON), National Information Technology Development Agency (NITDA), and the Federal Ministry of Communications Technology.

    The project is a bold move to bring together technology, government and society in ways that promote the culture of innovation and the competitiveness between allied businesses and knowledge-based institutions.

     

  • Insurers grow business to N319b

    Insurers grow business to N319b

    Estimated value of business underwritten by the insurance industry increased to N319 billion as against N285 billion posted in 2013, representing a 12 per cent increase.

    This is just as insurance companies settled claims amounting to N326.25 billion between 2011 and last year.

    A breakdown of the claims shows that N70.71 billion was paid in 2011; N72.20 billion in 2012; N92.95 billion in 2013 and N90.39 in 2014.

    The Nigerian Insurers Association (NIA) stated this in its 2014, 2015 annual report and accounts presented at the Annual General Meeting (AGM) in Lagos.

    NIA Chairman, Godwin Wiggle, noted that the industry was plagued by some challenges.

    He said: “As we know, the insurance sector cannot be insulated from the vagaries and vicissitudes of the  economy.’’ He listed the challenges in the industry to include poor power supply, weak infrastructure and the insurgency in the North.

    “Northeast contributed to slow down the pace of growth of the industry. The introduction of innovative products, strategic business, models and improved service delivery, however, helped to up the ante for the industry.

    ‘’The enforcement of ‘No Premium No Cover,’ implementation of International Financial Reporting Standard (IFRS), strict adherence to anti-money laundering guidelines, better corporate governance structures and tighter supervisory oversight and the shift to development oriented regulation by the National Insurance Commission contributed significantly to the improvement in quantum of premium that we are reporting today,’’ he added.

    Wiggle lauded the National Insurance Commission (NAICOM) for its development-oriented regulations, saying it contributed significantly to the improvement in the quantum of premium recorded.

    On the achievements of the association, he said the association engaged in various activities aimed at enhancing the growth of the insurance industry in Nigeria during the year under review.

    “In the year under review, the association continued to make giant strides in the implementation of the Nigerian Insurance Industry Database (NIID).  Concerted efforts were made to extend the areas covered by the device to locations, such as Abuja, Nasarawa and Lagos.

    “More verification devices were distributed to member companies to enhance their marketing activities. As a fa1l-out of the public acceptance-of the device, the number of uploads has increased significantly from 778,928 in 2013 to 1,099,837 in 2014. As at April 2015, a total of 3.21 million vehicles have been uploaded by the 41 member companies underwriting motor insurance business,” he added.

    He enjoined member-companies to continue to take the issue of upload seriously to avoid embarrassment to the insured.

  • Insurers lose over N60b to fake motor policy

    Insurers lose over N60b to fake motor policy

    With 12 million out of the 15 million vehicles on Nigerian roads uninsured, over N60 billion is being lost to fake motor insurance certificates yearly by insurers.

    This estimates according to insurers is derived from the assumption that the 12 million vehicle owners with fake insurance buys only the statutory third party motor insurance and pays the base premium of N5000.

    Chairman, Nigerian Insurers Association (NIA) Godwin Wiggle who spoke yesterday with reporters in Lagos said if comprehensive policies are considered, the loss would be over N60 billion.

    Wiggle said the figure quoted excludes how much insurance brokers are also losing yearly to fake policies.

    Wiggle said the association was able to checkmate fake motor insurance through the Nigerian Insurance Industry Database (NIID) which objectives are to phase out fake papers and allow genuine insurance to thrive in the sector.

    The NIID enables law enforcement agents and vehicle owners to easily verify the authencity of motor insurance certificate within one minute by either sending a text meassge or the policy number on the insurance certificate and the number plate to 33125. When this is done, a reply confirming whether or not the policy is genuine is sent.

    He said: “In the year under review, the association continued to make giant strides in the implementation of the NIID. The association is not relenting in its efforts to extend the areas to be covered by the device.

    “More verification devices were distributed to member companies to enhance their marketing activities.   As a fall-out of the public acceptance of the device, the number of uploads has increased significantlyover the past few years.As at May 2015, over 3million vehicles have been uploaded by the 41 member companies underwriting motor insurance business.

    “The association will continue its drive to extend the states covered by the NIID device in order to bring more motor vehicles into the NIID net.”

    He implored motorists to make sure they buy genuine insurance certificates from insurance companies, brokers or accredited agents and to resist the temptation of patronising touts, and other unauthorised sources as they do not sell genuine motor certificates and cannot be guaranteed any benefit in the event of a loss.