The Nation Newspaper

Tag: premium

  • Africa contributes 1.5% to global insurance premium

    African contribution to the world insurance gross premium is only 1.5 per cent, President, African Insurance Organiation (AIO), Jean-Baptistery Ntukamazina, has said.

    Speaking yesterday at the ongoing 42nd Conference and General Assembly of the African Insurance Organistion (AIO) in Tunisia, he said conflicts in Africa have cost continent billions of dollars.

    This year’s conference with over 1000 delegates in attendance has African insurance facing mass events as its theme.

    Ntukamazina lamented that a report by Oxfam compared African countries afflicted by conflict with those at peace, saying nations at war have, on the average, 50 per cent more infant mortality rate; 15 per cent more undernourished people and life expectancy reduced by five years while indirect deaths are 14 times higher than deaths in countries in combat.

    The research by Oxfam, Saferworld and the International Action Network on Small Arms, estimates that conflict shrinks economies by 15 per cent on average.

    The AIO chief said insurers are important actors of Africa’s economy.

    He said: “We all know that mass events are serious threat on economic activity; we know how wars and violent conflicts create inflation, increase debts, reduce investment, cause unemployment along with thousands of innocent victims. This serves to say this year’s theme of the conference is accurate and timely.

    “But, for our different economies to prosper, we need favourable political environment, security and good governance. That is why our political leaders should understand that the prosperity of their different nations is among their first responsibility. The promising Africa cannot arise without peace, security and good governance.”

    According to him, Africa attracts unusual interest from abroad, adding that the future is promising.

    He said resources boom and economic growth, industrialisation, infrastructure development, rapid urbanisation, rising employment levels, demographic, social change, technology, environmental change, regulatory change and hopefully political stability are factors that would drive the future of the continent.

    He said Africa has one-third of global mineral reserves and represents one tenth of the global oil reserves, two-thirds of the world’s diamonds produced

    He also said 27 per cent of the world’s arable lands is in Africa and 60 per cent of the world’s uncultivated arable lands is in the continent.

    Based on this scenario, he said insurers must take advantage of the opportunities and benefit from the growth in various sectors because the predicted positive changes of African economies will impact on healthcare services, housing and urban infrastructure, protection of assets and increased savings, among others.

    These are the opportunities we have to tap into by proposing new products, increasing insurance penetration, improving distribution techniques and cost-cutting. He said because the profession is risk-taking, professionals can boost, push and support other businesses by mitigating their risks and hence ameliorate the lives of our populations.

  • Lufthansa offers premium on economy flights

    Lufthansa is offering new Premium Economy on all flights to and from Nigeria.  Passengers of the German airline would also enjoy the new business class on almost all flights before the end of the year, saying that the new First-Class won accolades in Europe as well as in the United States and that it is synonymous with the most luxurious form of travel from Lufthansa’s Nigerian gateways.

    The Group Managing Director for West Africa, Lufthansa, Claus Becker said: “Lagos, Abuja and Port Harcourt remain among the most important destinations in Lufthansa’s Africa portfolio. We are proud of the success story in this country together with our esteemed Nigerian passengers”. “The prospects for the aviation sector in Africa are promising: passenger numbers are set to rise in Africa by nearly six percent yearly until 2025.

    For Lufthansa in Nigeria this means we remain steadfast in our commitment to our local customers”, he said. According to the airline, Lufthansa’s success story in Nigeria has been firmly rooted with over 50 years of proud service from Germany.

    On March 4, 1962, the first Lufthansa flight touched down at the Murtala Muhammed International Airport, Lagos. “Back then, Lufthansa flew to Lagos with a Boeing 720B aircraft, the world’s fastest commercial aircraft at that time. These planes had a passenger capacity of about 160, ‘’ Becker said.

    The flight was a non-stop service to Lagos, twice weekly”, it stated. “Today, Lufthansa flies daily to Lagos with continuation to Port Harcourt and daily to Abuja. The aircraft is a state-of-the-art Airbus 330-300, with 8 seats in First Class, 48 in Business Class and 165 in Economy Class. Lufthansa does not only strive to constantly improve passengers” experience on-board.

    The airline is proud to set standards in aviation technology and safety”, it added. The Lufthansa Group will take delivery of 263 new, state-of-the-art aircraft at a list price of EUR 37bn by 2025. The Company actively supports the use of alternative fuels and research into them. From spring 2015, it noted that the Lufthansa Group would be refueling its aircraft at Oslo airport with a bio kerosene blend.

    Lufthansa has continuously strives to be a good corporate citizenship. Help Alliance, the aid organization of Lufthansa staff, has had a strong focus on aid projects in Africa. Last year more than 800,000 Euros were earmarked for supporting 20 projects across the African continent and three of the projects in Nigeria.

    Therefore, acknowledging theses continuous efforts by Lufthansa, the Pan African Award Committee made up of travel professionals and journalists from across Africa just a few months ago, endorsed the result of the public online voting that chose Lufthansa as the Best European Airline to Africa.

  • NSE to launch new premium board for large blue chips

    NSE to launch new premium board for large blue chips

    The Nigerian Stock Exchange (NSE) is concluding arrangements to launch its new high-end listing board that will showcase the stock market’s largest and most compliant companies.

    The new board, known as the premium board, is designed as a market for the most-capitalised stocks with the best corporate governance and liquidity. It is meant to showcase Nigeria’s best stocks to the global market.

    Besides, the management of the Exchange is working on a new board that will focus on emerging companies with growth potential. This board will be known as the growth board.

    The addition of the new premium board and growth board will effectively make the Exchange a four-tier trading platform. The existing listing boards, the main board and the Alternative Securities Market (ASeM), will also continue to run concurrently with the new premium and growth boards. The existing listing rules will continue to apply to companies currently on the main board and ASeM.

    Chief executive officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, confirmed that the Exchange has reached advanced stages towards the launch of the premium board.

    According to him, the new premium board is part of efforts to further promote and continuously develop a more transparent, liquid, accessible market, with a modern market structure to support the delivery of a wide range of investment products.

    He reiterated that the premium board would be exclusively for companies with minimum market capitalisation of $1 billion and high corporate governance standards as measured by the NSE’s corporate governance rating system (CGRS).

    He noted that the development of the growth board is aimed at supporting companies with high-growth potential adding that with its multiple platforms and structures, NSE aims to become the African exchange of choice for African issuers and global investors.

    “This is in-line with our new positioning as the market for entrepreneurial growth. The capital market, in line with the growth agenda of the current management of the Exchange, has within the last three years, implemented far-reaching transformational policies aimed at diversifying our economic base and achieving sustained, inclusive economic growth,” Onyema said.

    He said the Exchange would also sustain active engagement with relevant stakeholders and capital market operators to accelerate its development of Exchange Traded Derivatives, which could be launched in 2016.

    According to him, the launch of Exchange Traded Derivatives would further deepen Nigerian market product and value propositions.

    The Nation’s check showed that some 12 companies might make the inaugural list for the new premium board, which will subsequently be used by the NSE to woo major companies in Nigeria’s premium sectors of oil and gas, telecommunications and manufacturing.

    Companies that will be regrouped into the new premium board, according to a preview of the criteria obtained by The Nation, will be taken from five sectors of the NSE. These included leading breweries, cement-manufacturers, leading fast moving and consumer goods companies (FMCGs), oil and gas companies and banks. However, the new board will still be dominated by banks which are expected to have the largest representation and as well as liquidity.

    None of the stocks in the populous insurance sector and other sectors such as agriculture, healthcare, construction and information and communication technology will make the maiden trading list for the board.

    The existing quoted companies that will make the new premium board, according to a preview based on current market valuation, included the two leading cement companies- Dangote Cement and Lafarge Africa, the two leading breweries-Nigerian Breweries and Guinness Nigeria, at least five banks including Guaranty Trust Bank, Zenith Bank, FBN Holdings, Ecobank Transnational Incorporated (ETI) and Stanbic IBTC Holdings as well as at least two oil and gas stocks including Forte Oil and Seplat Petroleum Development Company. Nestle Nigeria will represent the FMCGs sector.

    A source in the know of the undercurrents at the Exchange had told The Nation in an earlier report that the transition of companies across the boards will be a continuous exercise as companies that meet the criteria for the premium board will be upgraded to the board while any company on the premium board that falls below the minimum standards will be downgraded to the appropriate lower board.

    The NSE will also continue to undertake primary listing of new companies on the boards, depending on the qualifying criteria and status of the company.

    A preview of the criteria for the new board obtained by The Nation had indicated that companies to be listed on the new board must have market capitalisation of not less than $1 billion or about N165 billion.

    The companies must also score at least 70 per cent on the Exchange and the Convention for Business Integrity’s Corporate Governance Rating System (CGRS).

    Besides, the companies must have a minimum free float of 20 per cent or value of shares floated must be equal to or above $1 billion and the number of shares representing its issued share capital must be equal to or above 10 billion units.

    The companies are expected to meet stringent corporate governance, capitalisation and liquidity conditions.

    According to the draft rules for the new board currently under consideration, to remain on the premium board, an issuer’s continued eligibility shall be evaluated by the Exchange annually in line with all the outlined criteria or on the basis of additional requirements which may from time to time be prescribed by the Exchange, provided that each company shall comply with all other continuing listing obligations as specified under the listings rules of the Exchange.

    The council of the NSE may also in its discretion grant an extension of time for a company to comply with the relevant free float requirements set out in these rules; provided that the company submits a formal and substantiated request in that regard setting out the reasons why it could not meet the said requirements and how it proposes to satisfy the requirements within the time granted.

    Also, in the event of non-compliance with any applicable codes or regulations affecting their governance, companies shall be expected without prompting, to disclose in the Directors’ report of their annual report why they are in breach.

    Head, legal and regulation, Nigerian Stock Exchange (NSE), Tinuade Awe, said the new board would subsist on a very strict regime with a great deal of emphasis placed on the need to comply with good corporate governance.

    According to her, the companies on the new board would be liable to sanctions in the event of breach of the premium board rules as well as the listings rules of the Exchange.

  • Police insurance premium

    •We can’t get the best from the cops when govt keeps delaying payment 

    We are astonished that a mountain is being made out of the Federal Government embarking on the needful by setting aside N3.5bn as insurance premium for the Nigeria Police Force (NPF) for the 2015 financial period. More outrageous is the fact that the newly approved premium expected to be paid to Custodian and Allied Insurance and 21 other insurance firms as underwriters for the police in 2015 had expired since December, last year.

    This is despite the fact that the underwriters had long sent reminder letter about the expiry date of the insurance policy to relevant ministries, departments and agencies (MDAs) of government. Yet, the MDAs have been apathetic despite their knowing that insurance companies, as provided by law, run a policy of ‘no premium, no cover’. The Insurance Act 2003, section 50 is explicit: “The receipt of an insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect of an insurance risk unless the premium is paid in advance.”

    The concerned authorities need to be asked about the fate of policemen faced with misfortunes in the intervening period of premium default for 2015 so far, in view of the volatile security situation in the country. Equally worthy of note is the observation that the police premium for 2014 is reportedly the same as 2015. The question: If premium is determined by claims made by the insured in the covered years, why is it that police premium has remained static despite reported increase in the number of incidents leading to more claims from the underwriters? Is the 2015 police insurance premium officially assumed or based on policy advice from the underwriters that are aware of the consequences of under-insurance when in the long or short run, the need for claims arises?

    We are aware of the demand for enormous insurance claims from underwriters by widows and dependants of slain police and other paramilitary men and officers engaged in battles with the Boko Haram insurgents in the north east and others in the line of duty in other parts of the country.

    The figures purportedly sent by the underwriters and the National Insurance Commission in September 2013 to the  office of Accountant-General of the Federation and the Federal Ministry of Finance reportedly showed that a significant number of men of the armed forces and police were killed on duty.

    For instance, between January and June, 2013, claims of above N1.5billion were recorded from men that were killed on duty alone, without those that died from other causes. The reason for the static premium figures remains scary.

    We are also aware of provision for Group Life Insurance Cover under the Pension Reform Act which is meant to provide financial compensation to dependants/relatives of an insured worker who dies while still in service. But since the NPF gained its autonomy over its insurance matters and equally got separated from the civil service and other forces in 2013, we expect a better coordinated structure for all they do; something that is a far cry from its shoddy handling by the office of the secretary to government of the federation. This is today not the situation.

    It is sad that the nation is still grappling with how to sort out police insurance premium in an age and time when such an issue should be taken as given. It is equally disheartening to know that the same police that governments unleash on the society just to perpetuate themselves in power are not well taken care of. If the government is genuine and sincere about building a committed police institution, the police should be insured as a matter of law, and not as an act of favour.

  • Insgroup in $35m premium deal

    Pension’s Minister Steve Webb wants  to extend freedoms announced in the  Budget to give up to five million existing pensioners the chance to trade in their annuities for cash Millions of retired workers would be given the power sell their pensions, under major plans to relax annuity rules being drawn up by ministers.

    Up to five million pensioners would stand to benefit from the proposals, if they would rather have money in their bank accounts than a guaranteed income every year.

    Reforms announced in last year’s Budget will mean working people who retire in future will be able to cash-in their pension savings for a lump sum which they will be free to spend as they wish.

    But an estimated five million pensioners who have already retired will miss out because they are locked into their contracts until they die.

    Steve Webb, the Pensions Minister, told The Telegraph he wanted to change the law to enable these pensioners to sell their annual lifetime incomes known as “annuities” to the highest bidder at any time after they have retired.

    Pensioners may decide they would rather have cash than a guaranteed income stream to give money to children, to pay for home renovations or to invest.

    The plan will be particularly appealing to those who have more than one pension as a result of working for several employers, and who would prefer to have money “up front” than to receive a small amount from a low-value pension each year.

    The reform would also create a new market in “second hand” pensions, as insurance firms and other companies buy up individuals’ annuities, bundle them together and sell them on in bulk.

    Webb said he had been urged by pensioners to introduce the reforms, while several major pensions companies and insurers had also expressed “considerable interest and enthusiasm” for the plan.

    “I want to see people trusted with their own money wherever possible. I have already heard from people around the country who would like to see this change made.

    “I want to see if we can get these freedoms extended to those who are receiving an annuity but who might prefer a cash lump sum. No one would be obliged to do so, but for those who would prefer upfront capital to regular income, I can see no reason why this should not be an option”, he said.

    An estimated 400,000 people who retire each year use the money they have saved while working to buy an annuity, an insurance product which pays an annual income for the rest of their lives.

  • NDIC’s premium reduction begins

    The Nigeria Deposit Insurance Corporation (NDIC) plan to reduce premium banks’pay to it from 0.4 per cent to 0.35 per cent is expected to begin this year.

    NDIC’s Chief Executive Officer, Umaru Ibrahim, who made this known in a statement, explained that the premium reduction was meant to reduce premium burden on banks and ensure that the deposit insurance is fairly priced.

    He said the corporation had in 2010 reviewed the premium templates from 0.5 to 0.4; it ended in 2014.

    That premium review, he added, led to a reduction of N53 billion in premium revenue.

    He said banks are fairly stable as some of them are playing the role of financial intermediation outside the country.

    “There are improvements in terms of governance and banks are safe in terms of deposit savings and non-performing loans,” he said.

    Ibrahim added: “There is continuous concern that banks should lend more to the real sector particularly in the area of lending to agriculture. The banks are doing a lot in lending to oil and gas. There is the concern of banks’ inability to mobilise long term funds outside the banking system but the NDIC will ensure that banks mobilise long term finances in realisation of the short coming.”

    The corporation said it had paid N6.825 billion to 528,277 insured depositors of the 48 Deposit Money Banks (DMBs) in-liquidation as at August 31, 2014 and N2.756 billion to 80,059 verified depositors of the 186 closed Microfinance Banks (MFBs,) within same period.

    The NDIC boss said there had been a reduction in the examination cycles of banks over the years facilitated by proactive measures taken by the corporation to address detected aberrations in the system with minimal disruption to the payment system as well as minimal material and resource losses.

    One of such proactive measures he said is the development of software called Financial Institution Liquidation Management Software (FILMS) to enhance the NDIC’s liquidation process.

    The software, he said, was being enhanced to make it web enabled.

    The most profound success of the corporation in this area, he said, “included the introduction of risk-based supervision framework in the supervisory process, development of framework for Early Warning Signals to detect problem banks, development of framework for the identification and measurement of Systemically Important Banks (SIBs) and the institution of a framework for the provision of financial and technical assistance to deserving insured institutions to alleviate the constraints of funding faced by MFBs and PMBs, amongst others.”

    The corporation, he said, partners  the CBN in the development of framework for consolidated supervision and other frameworks, guidelines and code that help in strengthening supervisory process in the financial system.

     

  • Premium Pension sends forth retiring board member

    The board and management of Premium Pension Limited, one of the pension fund administrators in the country have sent forth one of its retiring directors Mr. Ibrahim Alhassan Babayo, at a colorful luncheon ceremony held in Abuja recently.

    Chairman of the company’s board Mr. AliyuDikko in his remarks described Babayo as a very productive person who always worked with enthusiasm to uplift the company.

    He added that Babayo was an asset to the company noting that the acquisition of their head office has his strong imprints as he worked tirelessly to achieve that feat.

    Also commenting at the occasion, a member of the board Nelson Nweke described Babayo as a versatile person who is highly professional and resourceful.

    Managing Director of the company,  WilsonIdeva thanked Babayo for his immeasurable contributions and inspirational disposition towards  to the management.

    He expressed his pleasure working with him, describing him as  a special person whose advice the company immensely benefitted from.

    Responding, Babayo thanked the  foundational board members of the company for the solid foundation laid for the company to thrive in terms of good corporate governance. He expressed his deep appreciation for the warm reception accorded him as well as the cooperation of other board members over the past few years.

    Babayo joined the board of Premium Pension Limited on the 19th August, 2011. While on the board he served as Chairman of the Board Information Technology Committee and also as a member of Board Audit, Establishment and nominating committees. Babayo retired from the board of the company after successfully completing his tenure.

    The occasion also served as an opportunity to welcome back reappointed directors of the board in the persons of Architect YunusaYakubu and Mr. Usman Zarma. The chairman described them as hardworking founding fathers of Premium Pension Limited.

  • NDIC mulls no premium, no cover policy for banks

    NDIC mulls no premium, no cover policy for banks

    The Nigeria Deposit Insurance Corporation (NDIC) has said that it is working on achieving a no policy, no cover policy for the Nigerian financial sector.

    NDIC Managing Director, Umaru Ibrahim said the corporation, HAS included in the ongoing amendments to its Act, a section that will empower it to cover only institutions that have paid their premium.

    He said the implementation of such act, will enable it plug some loopholes and ginger the insured firms to pay their premium promptly.

    He said the Corporation is also working on establishing a ‘Resolution Fund’ that will enable it create more buffers to handle cases, should a bank fail.

    The NDIC covers all deposit taking financial institution licenced by the Central Bank of Nigeria (CBN). These include Deposit Money Banks, Microfinance Banks, Primary Mortgage Banks (PMBs) and Non-Interest Bank. The NDIC currently provides deposit insurance cover to 24 commercial banks, 880 microfinance banks, 77 primary mortgage banks and one Non-Interest Bank.

    Ibrahim explained that NDIC collaborates with the CBN for effective banking supervision, adding that such would protect depositors, foster monetary stability and promote effective and efficient payment system, as well as ensure innovation and competition in the subsector.

    He said the Corporation has for several years, carried out these tasks which have resulted in the   reduction in examination cycles of banks and led to minimal disruptions in the payment system.

    He advised PMBs to adhere to recommended corporate governance practices, based on effective and sustainable risk management practices as instituted by the regulatory authorities.

    “Weak corporate governance and risk management frameworks could result in risky behaviours by PMBs, which could in turn result in the creation of huge toxic assets and ultimately put insured deposits at risk.”

    He lamented that the supervisory authorities were deeply concerned about the build-up of toxic assets of micro finance banks, which stood at about 45.70 per cent as against the prescribed maximum of five per cent, while hinting that the corporation’s attention is now being focused on both Micro Finance Bank and PMB sub-sectors so as to address the emerging challenges.

    He, however, advised that PMBs should be interested in enhanced risk management standards because some mortgage portfolios are on a predominantly variable rate and therefore highly sensitive to interest rate fluctuations.

    He said: “For instance, an increase in interest rate could make mortgage repayment difficult and result in default which may give rise to toxic assets. Furthermore, new mortgages could become less attractive for consumers’ due assets.

    PMBs should be able to assess a consumer’s ability to continue with mortgage repayments in the case of an interest rate rise. A lack of thorough and effective assessments could pose a major risk for many PMBs.”

    Ibrahim stated that the corporation and the CBN were making concerted efforts to ensure that risk management issues in the financial system were continuously addressed via rapidly developing capacity in the implementation of Basel II and III.

    The maximum deposit insurance coverage was increased from its set level of N50,000 at inception to N200,000 in 2006. In 2010, it was further raised to N500,000 for commercial banks.

  • Premium Pension strategises

    Chairman, Premium Pension Limited, Mallam Aliyu Dikko has said the company grew its balance sheet from N52.3 billion in 2008 to N325.7 billion in 2013.

    Dikko, who made this known this in Abuja said competition in the pension industry was becoming stiffer and the environment throwing up tasking challenges.

    He said this had made it imperative for the company to consolidate on its zero tolerance for non-compliance and further sharpen the risk management policy and best practices in internal control processes and procedures.

    He added that the actual assets under management surpassed the 2008 strategic plan projections for four of the five years while performance over budget ranged from a low of N276 million to a high of N19.7 billion.

    He said: “The board and management of Premium Pension in the country met last weekend to draw up strategies to consolidate gains and move the company in tandem with the anticipated growth in the industry in the next five years.

    “The company was established in July, 2005 to achieve superior customer satisfaction in active and retirement life through best practices defined and driven by our core values of care, integrity, transparency, ethics and professionalism.

    “Our performances to date when placed in juxtaposition with the strategy we developed in 2008 reveals a mixed bag of areas where the benchmark were not attained and areas where targets were exceeded.

    “This strategy defining exercise has the principal objective of leading us to our set vision and mission through defining ways of developing a strong investment management policy with state of the arts investment management tools that will produce superior returns for our clients.”

  • SA Life’s gross premium hits N2.8b

    • Records N336m profit

    STANDARD Alliance Life Assurance Limited has made a gross premium income of N2.8 billion in the year ended December 31, 2012. In the same period the previous year, it made N2.2 billion, an increase of 26 per cent.

    The firm’s Chairman, Olorogun O’tega Emerhor, made this known at the 13th Annual General Meeting (AGM) in Lagos.

    The underwriting firm made a profit after tax of N336 million as against N246 million loss in 2011.

    It, however, paid N3 billion as claims. This includes Group Life, N1.4 billion. It, however, reported a growth of N448 million compared with N229 million in 2011.

    Emerhor said the performance in the profit level was as a result of prudent management of expenses and underwriting during the year.

    He hinted that the company plans to raise additional equity capital by next year to boost its finances.

    He noted that the financial statements were prepared in accordance with IFRS in tandem with the International Accounting Standard Board (IASB), noting that the 2012 financial statements is the first the company prepared in accordance with IFRS and IFRS 1.

    He further said the company’s financial statement had been re-prepared based on IFRS and the impact resulted to a loss of N246 million from the year ended December 31, 2011 as against the profit of N44.6 million earlier reported under Nigerian General Accepted accounting Practice (NGAAP).

    Explaining the delay in convening the AGM, he said: “Our plan is to always hold AGMs not later than July each year. Unfortunately, the introduction of the IFRS led to a lot of accounts preparation and education activities that involved the company,NAICOM, IFRS consultants and the auditors which made this year quite unique.

    ‘’This affected not just your company, but most companies in our sector.As of today,we are still ahead compared to a number of our colleagues.’’

    Recounting activities on the business operating environment in the country in the year undr review, he said the global economy continued to experience high unemployment rates, low consumer and business confidence and contraction in the growth rate of several economies.