Agusto and Co., a research, credit ratings and risk management firm, has envisaged a significant reduction in the total number of players in the Nigerian insurance industry by at least 50 per cent on December 31, 2020.
It stated this in its latest report on the insurance industry, in which it predicted that at least 26 out of 59 insurance firms licensed to underwrite risks in the non-life, life and composite business segments, would be able to meet the new minimum capital requirement stipulated by the National Insurance Commission (NAICOM) for operation of insurance business in Nigeria.
The report also predicted a stable outlook and anticipated 26.5 per cent growth in total assets of the industry between now and December 31.
“We expect marginal improvement in the near term and significant growth in the medium term on the back of the recapitalisation. However, the fragile macroeconomic environment remains a constraint,” the report added.
The new minimum capital requirements stipulated by NAICOM increased the capital base of four categories of insurance licenses from N3 billion to N10 billion for non-life insurance; N2 billion to N8 billion for life insurance; N5 billion to N18 billion for composite insurance and N10 billion to N20 billion for reinsurers. The deadline for meeting the new minimum requirement is December 31, 2020.
The report on the Nigerian insurance industry, which was titled “Recapitalisation: The Journey to Consolidation,” was unveiled in Lagos on Wednesday, by the Senior Analyst, Financial Institutions Ratings, Agusto and Co., Ada Ufomadu.
Ufomadu stated that 13 insurers out of 28 players in the non- life segment of the industry would comply before the December 2020 deadline through private placements, rights issuances and business combinations.
She also tipped eight life insurers to meet the new capital base before the December 2020 deadline.
Similarly, “we expect five composite insurers to comply before the December 2020 deadline,” she said.
The report stated that three out of the 28 non-life insurers and three out of 14 players in the life insurance sector had met the new minimum capital requirements. However, the report stated that only one out of 13 players in the composite insurance has met the new minimum capital requirements.
Ufomadu, identified low returns on equity (RoE) as a major hindrance on the way of many insurance firms to be able to meet the new minimum capital base. According to her, the RoE has remained, “lower than return on 365-day treasury certificates of 13.9 per cent and the banking industry’s estimated RoE of 22.9 per cent in 2019.
She added: “The return on equity of Nigeria’s insurance industry is significantly below the cost of equity and less than the average yield on Federal Government of Nigeria’s 365-day treasury certificates. It is also below the average inflation rate.
“This is attributable to lack of scale and a low return on investments, which adversely impacts profitability. A lot of equity investors therefore shun the industry, which is in dire need of additional capital to increase its underwriting capacity.”
The Agusto report also showed that the Gross Premium Income (GPI) in the insurance industry was driven by life business, particularly annuities while the oil and gas business line dominated the non-life segment of the industry.
Focus On Gumi, Shekau Before Chasing Me, Igboho Tells FG
Yoruba activist, Sunday Adeyemo , better known as Sunday Igboho , has advised the Federal Government to channel its energy towards arresting Boko Haram leader , Ibrahim Shekau , and Islamic cleric, Sheikh Ahmad Gumi, who has been holding meetings with bandits .
Igboho said this during an interview with The PUNCH on Friday while reacting to the face – off between him and security agents around the Guru Maharaji bus stop along the Lagos -Ibadan Expressway .
The Yoruba activist, who has been in the news for serving a quit notice on Fulani herdsmen in some parts of the South -West , said he was never invited before they attempted to arrest him .
When asked if he would honour a police invitation, Igboho said , “ Go and ask them to invite Gumi and Shekau first before disturbing me . Let them face the bandits instead .”
Igboho also said he would not run , adding that he had returned to his base in Ibadan .
When asked if he would go into hiding , he said , “ What for ? I am in the neighbourhood . I cannot run . ”
Igboho also affirmed that his bank account was initially frozen but the restriction was lifted recently .
He said he had done nothing wrong but fight for the rights of his people .
EFCC Arraign Insurance Brokers For N26bn PHCN Severance Benefit
The Economic and Financial Crimes Commission (EFCC), on Thursday, arraigned Abiodun Waheed Hassan and his company, Bestworth
Insurance Brokers Limited, before Justice S.C Oriji of the Federal
Capital Territory High Court, Apo, Abuja on a five count charge of
alleged criminal breach of trust and misappropriation of funds to the
tune of over Twenty Six Billion Naira (N26billion).
The defendant allegedly diverted humongous sums of money earmarked for the payment of outstanding insurance premiums and claims of deceased and incapacitated staff of Power Holding Company of Nigeria (PHCN), into the corporate account of entities.
Count one of the charge reads: “That you, Abiodun Waheed Hassan, Director, Bestworth Insurance Brokers Limited and Bestworth Insurance Brokers Limited on or about 15th January 2015, in Abuja within the jurisdiction of the High Court of the Federal Capital Territory, while being entrusted with certain property to wit:
the sum of N26,236,594,986.00 (Twenty-six Billion, Two Hundred and
Thirty-six Million, Five Hundred and Ninety-four Thousand, Nine Hundred
and Eighty-six Naira only) paid into Bestworth Insurance Brokers
Limited’s Skye Bank Account No. 1771645118 from PHCN STAFF Severance Benefits account with the Central Bank of Nigeria, being funds earmarked for the payment of outstanding insurance premiums and claims of deceased and incapacitated staff of Power Holding Company of Nigeria (PHCN), did
commit criminal breach of trust in respect of the said property by
dishonestly misappropriating the sum of N2,500,000,000.00( Two Billion
Five Hundred Million Naira only) thereof when you transferred the said
sum into Kakatar CE Limited’s Zenith Bank Account No.1012637660 and you
thereby committed an offence punishable under Section 315 of the Panel Code Cap 532 Laws of the Federation of Nigeria, (Abuja) 2004.”
Count Five states, “that you , Abiodun Waheed Hassan, Director, Bestworth Insurance Brokers Limited and Bestworth Insurance Brokers
Limited on or about 18th December 2014, in Abuja within the jurisdiction
of the High Court of the Federal Capital Territory, while being
entrusted with certain property to wit: the sum of N26,236,594,986.00
(Twenty-six Billion, Two Hundred and Thirty-six Million, Five Hundred
and Ninety-four Thousand, Nine Hundred and Eighty-six Naira only) paid
into Bestworth Insurance Brokers Limited’s Skye Bank Account No.
1771645118 from PHCN STAFF SEVERANCE Benefits account with the Central Bank of Nigeria, being funds earmarked for the payment of outstanding insurance premiums and claims of deceased and incapacitated staff of Power Holding Company of Nigeria (PHCN), did commit criminal breach of trust in respect of the said property by dishonestly misappropriating the sum of N6,000,000,000.00 ( Six Billion Naira only) thereof when you
transferred the said sum into PJO Venture Limited’s Skye Bank Account
No.1771645235 and you thereby committed an offence punishable under
Section 315 of the Panel Code Cap 532 Laws of the Federation of Nigeria,
The defendant pleaded ‘not guilty’, when the charges were read to him.
Based on his plea, prosecution counsel, Benjamin Lawan Menji, ask for a
trial date and prayed the Court to remand the defendant at the
Correctional Service pending the trail.
Counsel for the defendant, Ade Olusalako told the court that the defense
had filed a motion for bail of his client and pleaded for the remand of
the defendant in the custody of the EFCC pending the determination of his bail application on the grounds that “the defendant has been on administrative bail for almost five years and he has an underlining sickness”.
However, the prosecution counsel objected to the application. “As he
rightly submitted, we received the application but we shall vehemently
be opposing the application; we said vehemently so that the court will
know that we have a strong opposition. Moreover, our facility is
overstretched because of the issue of the Covid-19 Pandemic, the little
we have we are trying to manage them. The proper place of detention or
custody is the Correctional Service which the government has done its
best in providing”, Menji told the court.
However, Justice Oriji adjourned the matter till March 4, 2021 for
hearing on the bail application and remanded defendant in EFCC custody.
Niger Delta Militants Threaten To Attack Lagos, Abuja
Niger Delta militants under the aegis of Supreme Egbesu Liberation Fighters have threatened to destroy infrastructure in Lagos State and Abuja .
In a video posted on Tuesday by AIT , members of the group were seen wearing masks and putting on a military uniform .
One of them , who read a statement on behalf of the group , lamented poor implementation of the amnesty programme in the region, saying , “ there are no schools , no potable water , no light , no hospital and access roads for our people to enjoy till date” .
He said , “ Over the years, the Niger Delta people have made frantic efforts to create an enabling environment but to our great dismay, the Nigerian government over the years has decided to handle the issues of the Niger Delta with kid gloves .
“ They have betrayed the struggle and have left the people to their fate ,” a member of the group read from a statement .
“ Rather, what is visible is the presence of military gunboat and the numerous military personnel dispersed to the Niger Delta who are killing, raping , and maiming the innocent people of the region.
“ Look at the security surveillance contract taking place in our region through the federal government these agencies in place have decided to shortchange our people . Now in our territorial waters , it is an Israeli company that is providing waterway security which we have competent hands with expert knowledge to manage.
“ Don ’t worry, because we are coming to destroy all your infrastructure in Abuja and Lagos . As a group committed to giving total liberation to our people , we will destroy the oil facilities both onshore and offshore in no distant time , we will be seen to be crippling the Nigerian economy. ”