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AIICO Promises Sustained Partnership With NAIPCO

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Mr. Emmanuel Otitolaiye, Chief Financial Officer, Linkage Assurance Plc (left); Mr. Segun Olalandu, Head, Strategic Marketing & Communications, AIICO Insurance Plc, and Mr. Lekan Otufodunrin, Executive Director, Media Career Development Network, during the training workshop organised by the National Association of Insurance and Pension Correspondents (NAIPCO) in Lagos on Tuesday.
In line with AIICO Insurance PLC’s determination to actualise the company’s objectives, ensure the growth of Nigerian insurance industry and contribute to the nation’s economy, the management has promised to ensure a sustained partnership with members of the National Association of Insurance and Pension Correspondents (NAIPCO).
The company’s Managing Director, Babatunde Fajemirokun, gave this assurance while speaking at the training workshop organised by NAIPCO for its members in Lagos on Tuesday.
Represented by the firm’s Head, Strategic Marketing and Corporate Communication Department, Segun Olalandu, the AIICO boss commended the efforts of NAIPCO in creating awareness on the benefits and advantages of insurance as a risk mitigating mechanism and a tool for poverty alleviation and wealth creation.
He stressed the prime place of the media in nation building, and described NAIPCO as a “very important association and strategic” for the nation’s insurance industry.
Assuring NAIPCO of his company’s continued supports, Fajemirokun implored the journalists to redouble their efforts and remain committed to their professional ethics and conduct in order to take the industry to the next level.
On recapitalisation, he said the company has met and surpassed the 50% of the new capital threshold in the first phase of the segmented recapitalisation exercise expiring on December 31, 2020 for all insurance and reinsurance companies in the country.
Commenting on the firm’s 2020 third quarter operating results, Fajemirokun said it achieved a 27 per cent year-on-year growth in gross premiums written from N37.0 billion in Q3 2019 to N47.2 billion in Q3 2020, noting that the global and local macroeconomic headwinds have continued to test the resilience of the firm’s business, and operating models, as well as its business continuity plans and the strength of its relationships with customers and partners.
According to him, “the increased contribution to profits from our general insurance and our asset management businesses highlight the strengths as a group. Our general business continues to enjoy the confidence and support of our customers, despite the effects of the pandemic. Our asset management business, AIICO Capital, continues to grow its client base while investing judiciously on behalf of its clients. Overall, profit before taxes reduced seven per cent year-on-year, from N5.0 billion in Q3 2019 to N4.7 billion in Q3 2020.
“Profit-after-taxes increased 17 per cent year-on-year to N5.2 billion for the interim period ended September 30, 2020 from N4.5 billion in the corresponding period in 2019,” he said. The total assets, he said increased 55 per cent year-to-date to N245.8 billion from N159.5 billion in December 2019 driven by an increase in financial assets, including cash and cash equivalents,” he added.
He noted that the financial assets increased because of the decline in investment yields and judicious investment of funds received for policies sold, maintaining that total liabilities increased 63 per cent to N212.6 billion from N130.6 billion in December 2019 driven mainly by increases in insurance contract liabilities (from the decline in yields and reserving for new businesses) and fixed income liabilities (3rd party funds under management) in our asset management business.
Total equity, he said grew 15 per cent year-to-date to N33.2 billion from N28.9 billion in December 2019.
“Our 3rd quarter results demonstrate that our business remains steady, despite the changing client preferences and risk exposures that have accompanied the COVID-19 pandemic. We have recorded strong top-line growth year-on-year as well as improved contribution from subsidiaries in our Group, especially our asset management business.
“In our core insurance business, we will continue to offer innovative products that help our customers create and protect their wealth while leveraging the latest technology to meet our clients where they are. In addition, strong asset-liability management remains a pillar of our operating model. As a diversified financial services group, we will continue to ensure that businesses across our Group offer attractive products that enable us create value for all stakeholders,” he said.

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Business

NAICOM Licences Seven New Insurance Firms 

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Commissioner for insurance, Sunday Thomas and representatives of the newly licensed insurance outfits in Abuja on Friday.

By Sola Alabadan

The National Insurance Commission (NAICOM) issued operational licences to seven insurance companies in Abuja today, in line with Market Conduct & Business Practice Guidelines.

The new insurance firms are Heirs Insurance Limited (General), Heirs Life Assurance Limited, Stanbic IBTC Insurance Limited (life), Enterprise Life Assurance Company, FBS Reinsurance Limited, Salam Takaful and Cornerstone Takaful Insurance Company Limited.

The Commissioner for Insurance, Sunday Thomas, who gave the operational licences to the five firms at NAICOM Head Office, said the Commission has issued operational licences to the firms to operate insurance business.
According to him: “The National Insurance Commission (NAICOM) received applications from the under listed companies for registration as Insurance and reinsurance Companies to transact insurance and reinsurance business in Nigeria.
“In fulfillment of the statutory provisions of extant laws for the registration/licensing of insurance Companies, the general public is hereby informed that the Commission has commenced the process of registering the companies.
Consequently:” Heir Insurance Limited (General) has picked, Olaniyi Stephen Onifade as its Managing Director, Stanbic IBTC Insurance Limited, picked, Akinjide Orimolade as Managing Director; Heirs Life Assurance Limited picked Abah Okoriko and Enterprise Life Assurance Company Nigeria Limited picked Fumilayo Abimbola Omo.

“FBS Reinsurance Limited is led by the former Commissioner of Insurance, Fola Daniel. FBS is bringing together professionals with proven experience from the brokerage and underwriting units of the industry including Bala Zakariyau, the former managing director of Niger Insurance who currently plays in a support unit of the Nigerian aviation industry, Ahmed Olaniyi Salawu of the Standard Insurance Consultants, and Wole Oshin Bankole of the Custodian Investment Plc that has just taken a plunge into the property sector by taking a large chunk of the United Property Development Company, a subsidiary of the UACN Plc.
“These crops of professionals represent those with firm beliefs that there is a big insurance potential in Nigeria and indeed, the African continent. Others are Ebele Ofunneamaka Okeke, from Nnewi North, Anambra who rose to the position of the Head of Nigerian Civil Service before her retirement, and also, Yusuf Hamisu Abubakar, a lawyer, and an accomplished administrator and businessman with vast experience at the senior executive level in power and communication sectors.
“The reinsurance firm is required to pay the new N20 billion capitalisation stipulated by the commission under the reform exercise for it to start a business in the industry.”

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Business

Emirates Offers Travellers $500,000 Multi-risk Travel Cover 

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Emirates airlines has announced that it will provide travellers a multi- risk travel cover worth $ 500 , 000 on top of its current COVID-19 cover.
The airline stated that the new multi- risk travel insurance and COVID-19 cover will automatically apply to all Emirates tickets purchased from December 1 , and extend to Emirates codeshare flights operated by partner airlines , as long as the ticket number starts with 176.
Emirates Chairman and Chief Executive , Ahmed bin Al Maktoum was quoted as saying , “ Emirates was the first airline to offer complimentary global COVID -19 cover for travellers back in July , and the response from our customers has been tremendously encouraging.
“ We have not rested on our laurels and instead continued to look at how we can offer our customers an even better proposition. We are very pleased to be able to now provide this new multi- risk travel insurance and COVID – 19 cover , which is another industry first, to all our customers.”
He added, “ We aim to give our customers even more confidence in making their travel plans this winter and moving into 2021 by the launch of this feature .”
Highlights of the coverage include out -of – country emergency medical expenses and evacuation up to $ 500 ,000 , valid for COVID -19 ( contracted during the trip ) and other medical emergencies while travelling abroad.
It also involves trip cancellation up to $ 7 ,500 for non- refundable costs if the traveller or a relative ( as defined in the policy ) is unable to travel because they are diagnosed with COVID- 19 before the scheduled trip departure date , or for other named reasons – similar to other comprehensive travel cover products.

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Insurance

COVID-19 Pandemic Poses Severe Challenges To African Insurers, AIO Reveals

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By Sola Alabadan

The Africa Insurance Pulse launched today by the Africa Insurance Organisation (AIO) indicated that the COVID-19 pandemic posed severe challenges to Africa’s insurers, even as the insurers expect further uncertainty in the remainder of 2020 and 2021.
As in the past, this 5th edition of the Insurance Pulse titled “Growth perspectives of African re-/insurance markets”, is based on diligent market research and in-depth interviews with insurer, reinsurers and brokers operating in the continent.
The research was conducted by Faber Consulting on behalf of the AIO and sponsored by Africa Re.
Jean Baptiste Ntukamazina, Secretary General of AIO, said: “The COVID-19 pandemic has caught the global insurance industry largely unprepared. Those African insurance and reinsurance companies with a strong capital base, and the ability to distribute their products digitally were better equipped to weather the impact of the pandemic. This will enable them to capitalise faster on the business opportunities arising after the crisis.”

Capital & digitalisation as unique strategic differentiators in times of COVID-19
Those African insurers with a strong capital basis and already established digital distribution channels were better prepared to deal with the impact of the COVID-19 crisis. The combination of both factors protected them against the worst effects of the crisis and enabled them to maintain their client relations even during lockdown periods or in a social-distancing environment. As these insurers strengthened their market position during the pandemic, they will be even stronger in capturing those business opportunities, rising in the future.

Regulators focused on protecting African policyholders
Following the outbreak of the pandemic, regulatory authorities have given re-/insurers more time to cushion the impact from the sudden contraction of the economy. At the same time, they encouraged re-/insurers to pay claims promptly. Those re-/insurers operating according to risk-based capital regimes were better prepared to deal with the COVID-19 crisis.
Dr. Corneille Karekezi, Group Managing Director and Chief Executive Officer, Africa Re said: “Insurance regulation in Africa has significantly improved in recent years. Various regulators have pushed ahead, mandating the implementation of risk-based capital schemes or capital increases, as well as improved operations and risk management. At the same time, we witness rising protectionist efforts to retain insurance and reinsurance premiums locally. Regulators should assure that in particular in times of economic distress, insurers have access to the highly-rated risk capacity and expertise that well-diversified reinsurer provides. Indeed, some recent catastrophes, including large natural catastrophes or man-made claims in South Africa, Cameroon and Lebanon, and in addition to the threat presented by COVID-19 potentially related claims remind us that some exposures can quickly exceed local capacity.”

The pandemic will change the African insurance landscape & reduce top-line of insurers
Senior executives predict that COVID-19 will lead to an accelerated consolidation of Africa’s insurance industry, eliminating those companies with limited resources and fragile processes. Such a shake-out would strengthen the continent’s insurance markets and benefit policyholders through higher security and a drive for more innovation.
Executives expect an improved risk awareness among consumers, leading to higher demand for insurance products. However, executives are concerned about the impact of COVID-19 on the income of African households. They expect that policyholders will limit their spending and favour savings for fear of a reduction in income or job losses. This, in turn, will affect their insurance purchasing behaviour, ultimately leading to a decrease in premium income.
Andreas Bollmann, Partner at Faber Consulting, commented: “Despite the impact from COVID-19, Africa’s insurers and reinsurers remain confident of the fundamental growth potential of their market. They believe that the effects of the pandemic will be offset by an accelerated digital transformation, supportive government and regulatory policies, and increased risk awareness by consumers.”
For the remainder of 2020 and 2021, Africa’s insurance executives expect a continuation of the high level of uncertainty. Re-/insurers have to maintain adequate solvency, ensure operational resilience and remain responsive to customer needs. In 2020 insurers introduced large-scale transformative investments to redefine their core value proposition, optimise operations, update technology and to build a workforce for the future. In 2021 they have to continue on this path of strengthening their competitiveness and thus contributing to a more robust marketplace.
AIO was established in 1972 in Mauritius as a non-governmental organisation recognised by many African governments.

Currently, the AIO has 365 members, 345 of them from 47 countries in Africa and 15 associate international members from 9 countries.

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