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Nigerian Insurers Retain 93% Life Business Premium, 55% Non-life Premium In Second Quarter

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By Sola Alabadan

The Nigerian insurance industry recorded 93 percent premium retention ratio in the Life business, while non-life recorded a ratio of 55 percent during the second quarter of year 2022, the National Insurance Commission (NAICOM) disclosed on Friday.
The premium retention ratio refers to the portion of premiums (and therefore risk) that is kept on an insurance company’s books, rather than being passed on to the reinsurance companies.
In spite of the fact that the retention in the non-life business was above average level, when compared to the 59.4 percent recorded during the corresponding period in 2021, NAICOM stated that the decline would require a focused attention for improvement, going forward.
Out of the Gross premium income of N369.28 billion recorded in the second quarter of 2022, the Non-Life segment maintained its primacy at 59.3% of the total premium generated, while Life business recorded 40.6 percent of the insurance market production.
A further sub-division in the Non-life business shows that Oil & Gas was the leading driver at 32.5 percent, fire 20.7 percent. Motor Insurance 14.8 percent, while Marine & Aviation, Gen. Accident and Miscellaneous reported a share of 12.3 percent, 10.9 percent and 8.9 percent, respectively.
For the Life business, the share of Annuity was about 24.7 percent, while Individual Life held a major driver position at 41.8 percent of the premium generated during the period.
Meanwhile, the percentage of incurred claims as against reported, mirror the market retention view during the period.
Motor Insurance retained its lead posting a claims settlement ratio of 92 per cent. Progress was, however, more noticeable in the Oil & Gas with 85.7 percent per cent of claims settlement ratio, an increase of some 43 points compared to its position of 42.8 percent recorded in the corresponding period of 2021. Miscellaneous insurance also posted about 62 percent, higher than 44 percent paid claims ratio, compared to its corresponding period of 2021. while General Accident (75%), Fire (76.2%) and, Aviation & Marine (61.9%) followed in that order.
NAICOM added that “The Insurance market indeed remained profitable during the period, recording an overall industry average of about 56.9 percent, maintaining a relative position (57.7 percent) recorded in the corresponding period of preceding year. The Non-Life segment loss ratio stood at 43.6% while the life business stood at about sixty-nine (68.5%) per cent depicting a less profitable scenario comparatively, over the same period. The net loss ratios for non-life, bears an improved market image in the current period as compared to the preceding period when it was 48.2%.”

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Business

Guinea Insurance injects N900m capital into business

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Guinea Insurance Plc, one of the oldest insurance companies in Nigeria said it injected about N900 million as capital into its business in 2022 and is in the process of listing 1.8 billion shares.
The Managing Director/Chief Executive Officer of the insurance company, Mr. Ademola Abidogun disclosed this at the Nigerian Association of Insurance and Pension Editors’ (NAIPE) 2023 first quarter CEO’s Forum in Lagos.
Abidogun said the insurer has a lot of funds within its system and over N2billon cash under its management to do business.
He noted that the underwriting firm made the highest Gross Premium Written (GPI) of N1.4 billion in 2022, compared to the last ten years.
“We were also able to make underwriting profit. If you look at the statistics, Guinea insurance has consistently grown so much in its underwriting profit.
“When you check the financials, you will see that the core business of insurance is underwriting, which means; collect business, underwrite it and make profit,” he said.
According to Abidogun, the insurance company was working to improve its investment portfolio, as fund was essential to sustain a business.
The Managing director hinted that Guinea insurance’s claims payment method is one of the best in the market because the firm believes, one of the main reason for doing insurance business is to pay claims.
“If we pride ourself as one of the best in the industry in terms of claims payments, we must be able to pay claims after collecting people’s premium” Abidogun said.
According to him, while the underwriting firm had experienced some challenges few years ago in the market, it has been able to resuscitate its business between 2021 and 2022.
Abidogun noted that Guinea insurance also had to confront perception issues, because a lot of people think the insurer is a one man business, meanwhile it is a Plc with a very robust structure.
The managing director said that the insurance firm had started business well in year 2023 in terms of production and as at February, it had done over 300 percent of what it did same time last year.
“We will be able to deliver in terms of our plans for the year. The most important thing is for an organisation to have capacity, which has to do with financials and people driving the business and we will continue to evolve,” he said.

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Guinea Insurance Moves To Delight Shareholders

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The management of Guinea Insurance PLC is repositioning the insurance company to ensure value creation and optimum returns to its shareholders. the Managing Director, Mr. Ademola Abidogun, said.
Speaking at the Nigerian Association of Insurance and Pension Editors’ (NAIPE) first quarter 2023 CEOs Forum in Lagos recently, Abidogun said: “We have a very robust board and workforce that is made up of accountants, lawyers and other professionals with a very strong business experience working together to ensure we are where we are today.”
Abidogun said the company has invested so much in staff training and acquisition of technology, adding that currently “we have so many portals including the Third Party Portal which helps us in doing our Motor Business. Motor Business still remains the biggest of our products and we have partnership with a few brokers on that.”
According to him, “we are also getting new businesses from Brokers such as Marine Insurance for example. This segment is also growing despite the fact that there has been a lot of challenges in the areas of dollars and importation. Our oil and gas business portfolio too has also picked up because people are very passionate about insurance.”
On agric insurance, he said the Company is partnering with some international bodies to grow that segment.
He said the process of getting approval for Travel Insurance from NAICOM is ongoing.
Abidogun said the Company’s portal for its Motor and Marine insurance business is strengthening their partnership with some brokers, which he said have started patronizing them.
His words “The brokers partnership, our new business initiatives, our portal that we have for Motor and Marine insurances and some business with government agencies combined to ensure that we are getting value for our shareholders.”
In term of opening new branches, he said “We really don’t want to open a lot of branches but what we are doing is to have as many sales outlets as possible because to open new branch offices now is very expensive. We want to have sales outlets and well run central underwriting system and a central accounting system.
“Although we have few branches in strategic areas, we also want to open more sales outlets in strategic areas to complement the existing branch and enhance our operations in selling most of our products and repositioning our brands there.”

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Pension: PenOp Wants Bill Seeking To Exempt National Assembly Staff Discarded

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By Sola Alabadan

The Pension Fund Operators Association of Nigeria (PenOp) has raised the alarm that the bill seeking to exempt the National Assembly Service from the Contributory Pension Scheme (CPS) will have negative impacts on the pensioners and should therefore be discarded.

Recently, both Chambers of the National Assembly passed a “Bill for an Act to amend the Pension Reform Act, 2014, to Exclude/Exempt the National Assembly Service from the Contributory Pension Scheme and Establish the National Assembly Service Pension Board; and for Related Matters.”

PenOp stated that “the passage of this bill sets a dangerous precedence that will not augur well for hardworking Nigerians, working across the private and public sector, who depend on the Contributory Pension Scheme (CPS) for retirement security and stability.
“The introduction of the CPS in Nigeria marked a departure from the unsustainable pension schemes the country had been operating in the past. This scheme has brought transparency, international best practice and guaranteed peace of mind to millions of pensioners. For these reasons and many more, the need for the above bill is indeed unfathomable and unjustifiable.”
The pension operators expressed grave concern regarding the way the bill was passed, saying” The passage of this bill seems to have been unnecessarily expedited and shrouded in secrecy with very little engagement and input from critical stakeholders—as it was passed during the National Assembly’s recess.”” “Indeed, it is disturbing that this bill did not go through any public hearing, a key component of the legislative process that allows stakeholders to have their voices and opinions heard for possible inclusion in the process. If this was done, pertinent issues such as the amendment of retirement age, funding of pension liability, and the potential debt burden on government—all of which are affected by this bill—would have been debated and brought to the fore.
“The National Assembly prides itself as the heart of our democracy. Indeed, the halls of the National Assembly are the people’s halls. As such, it is extremely important that the legislative authority the National Assembly wields is in no way subverted to serve vested interests in passing anti-people legislation. The exemption of any agency or group from the Contributory Pension Scheme (CPS) holds grave consequences for the Nation’s struggling fiscal position and will potentially upend the retirement security of pensioners who have given their blood and sweat in service to our great Nation.
“Therefore, without reservations, PenOp, as a critical stakeholder in Nigeria’s pension industry, wishes to state that it considers the passage of this bill a procedural anomaly and legislative immorality. Hence, we call on all well-meaning Nigerians to note this grave anomaly and join us in calling on the National Assembly to reconsider its decision as well as enjoin the Executive and the Judiciary to outrightly condemn this action.
“More specifically, we call on the National Economic Council, the Minister of Finance, Budget & National Planning, the Secretary to the Government of the Federation and all relevant government stakeholders to look into this anti-people bill and ensure that it is not signed into law.
“Finally, should this bill proceed to Mr. President, we call on him to kindly refuse to assent to this bill in the interest of the people, the sustainability of the Nation’s pension system and the flawed procedure in which this bill went through.”

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