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AM Best To Deploy Pandemic-Related Stress Test For Rated Insurance Firms

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By Sola Alabadan

AM Best is developing stress testing that it will conduct on its rated insurance companies’ balance sheets to gauge the impact of the COVID-19 virus fallout on their risk-adjusted capital levels, investment portfolios, reserve adequacy and other aspects of the risks borne by rated entities.

The COVID-19 virus is unique in its scope and complexity of potential losses, and the uncertainty regarding the near-term impacts further exacerbates the situation. Consequently, the direct and indirect effects of the outbreak may not be understood fully for some time. AM Best has conducted stress tests of this nature following previous then-unprecedented events, such as Sept. 11 or the Eurozone crisis. In the United States, current economic conditions are seen as more likely to affect the balance sheets of life/annuity insurers than those of property/casualty or health insurers, and on March 16, 2020, AM Best revised the U.S. life/annuity industry’s market segment outlook to negative.

AM Best believes the insurance industry is more resilient today to financial market downturns than it was during the 2008-2009 financial crisis, which put heavy attention on liquidity risk. At this time, rated companies are expected to be able to meet their commitments, despite the rapidly evolving situation. With these coming stress tests, access to liquidity, as well as the laddering and maturing of debt securities within the capital structures of insurance companies, will be additional areas of focus.

AM Best realizes that this is a difficult time for companies to produce additional information, and as a result, will delay by one month its deadline for the 2019 statement-year Supplemental Rating Questionnaire (SRQ) to May 1, 2020, through its Client Rating Portal. A questionnaire also will be issued to rated entities to determine how their operations have been affected by the pandemic, which lines of business they expect to be negatively impacted most or if they expect any overall assumptions or forecasts to change. AM Best also will seek results of each organization’s own stress tests, which are typically considered in the assessment of each rating unit’s enterprise risk management framework.

AM Best will provide future updates as warranted, and will monitor the financial impact on rated entities closely and provide updates on Credit Ratings as necessary.

AM Best is very cognizant of the health and safety of its employees, rated entities’ employees and all of its stakeholders, and has taken precautions such as use of video conferencing to mitigate any spread of the coronavirus.

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‘It’s Suicidal ’, Labour Rejects FG’s Plans To Slash Salaries

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Agency Report

The Organised Labour has condemned and rejected the plan by the Federal Government to slash the salaries of workers in the country.

The President of the Nigeria Labour Congress, Ayuba Wabba, who said this in a statement on Wednesday in Abuja, noted that the plan was tantamount to a “mass suicide” wish, for Nigerian workers.

Waba said that NLC was shocked at a statement credited to the Minister of Finance, Mrs Zainab Ahmed, on the plan to reduce the high cost of governance by cutting down on the workers’ salaries.

”The minister also allegedly directed the National Salaries, Incomes and Wages Commission (NSIWC), to immediately review the salaries of civil servants as well as the number of federal agencies in the country.

”It is almost unthinkable that the government would be contemplating to unilaterally slash the salaries of Nigerian workers at this time,” he said.

Wabba added that, “the question to ask is which salary is the government planning to slash? It certainly cannot be the meager national minimum wage of N30, 000, which right now cannot even buy a bag of rice”.

He expressed the belief that the proposed slash in salaries was certainly not targeted at the minimum wage and consequential adjustment in salaries that some state governors were still dragging their feet to pay.

According to him, it is in public knowledge that the multiple devaluations of the Naira in a short time, and the prevailing high inflation rate in Nigeria, have knocked out the salaries earned by Nigerian workers across the board.

”Nigerian workers are only surviving by hair’s breadth. Indeed, Nigerian workers are miracles strutting on two legs.

”It is, therefore, extremely horrendous for a minister of the Federal Republic of Nigeria to pronounce salary slash for Nigerian workers currently.

”This call for salary slash by Mrs Zainab Ahmed is tantamount to a “mass suicide” wish, for Nigerian workers,” he said.

While opposing the move, he demanded an immediate retraction and apology by the Minister of  Finance.

The NLC president, however, said that if there was any salary that needed serious slashing, “it is the humongous remuneration and allowances pocketed by political office holders in Nigeria, who do extraordinarily little but collect so much.

”Workers generate surplus value and revenue for the government.

”We do not constitute any unnecessary cost or burden to governance. It is also important to make the point that salaries are products of contracts governed by laws. They cannot be unilaterally adjusted.”

He said that many countries of the world were increasing the salaries of their workforce and extending social security coverage for their citizens.

According to him, many are providing all forms of palliatives to help their people through the terrible socio-economic dislocations occasioned by the COVID-19 pandemic.

Waba said that it would be completely strange for the Nigerian government to be thinking of a salary slash.

“This move is not only at great odds with global best responses to the COVID-19 pandemic but also in violation of relevant ILO Conventions and Declarations on Wages and Decent Work.

“We urge the government as a social partner to quickly respond to the demands by Labour for an upward review of salaries of all Nigerian workers.

“Nigerian workers have shown sufficient understanding with the government through the tough patches of the pandemic.

“Now, Nigerian workers demand reciprocity of our understanding. Nigerian workers demand an increase in their remunerations and allowances,” he said.

NAN

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Paying ransomt To Kidnappers Is Foolishness —Obasanjo

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Former President, Olusegun Obasanjo, on Wednesday, has cautioned against the payment of ransom to kidnappers.

He, however, submitted that the government must develop means to deal with kidnappers and bandits heavily in place of ransom payment.

He noted that the governments of both President Goodluck Jonathan and Major General Muhammadu Buhari (retd.) paid ransom to kidnappers but they denied it.

Obasanjo said he does not believe in payment of ransom to kidnappers and bandits, saying it encouraged criminals indulging in the act.

The former president berated any government that pays ransom, describing them as follies.

Obasanjo spoke on Wednesday at his residence in Abeokuta, Ogun State, while playing host to members of Tiv professionals Group led by Prof Zacharys Anger Gundu.

Obasanjo insisted that it requires a “carrot and stick” approach to fight insecurity challenges to a standstill.

He said “Some people are still reaching out, and hoping that lives can still be saved. But a situation whereby anybody thinks paying ransom is the way out, that person is folly. He is a folly. This is because when you pay ransom, you encourage. But if you are not going to pay ransom, you must have the means to deal heavily with it. You must have the stick to deal with it.

“Government has always paid ransom. Not only this government, even during Jonathan (administration). They paid ransom, but they denied it.”

Obasanjo expressed fears that those beating drums of division in Nigeria don’t think about the interest of the minority ethnic groups.

He added, “Where do we want those minor groups to stand? Wherever they stand, now they are by virtue of Nigeria’s present situation a little bit protected. But if Nigeria breaks up and they are in a smaller country, they will be oppressed. They will always be exterminated. Are we thinking of that?

“I believe that if we will get it right in Nigeria, any leader must look at Nigeria with the prism of the diversity of Nigeria. For as long as you look at Nigeria with the prism of your ethnic group, then you aren’t going anywhere, either your ethnic group or religious group.

“But is there hope? There is hope.”

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Gumi Warns Against Sacking Pantami, Says Nigeria Will Regret If…

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Popular Islamic scholar, Sheikh Ahmad Gumi Monday warned that Nigerians will regret if the embattled Minister of Communications and Digital Economy, Dr. Isa Pantami is sacked from office.
Gumi who gave the warning during an interview with Roots TV said allegations against the embattled Minister were not true and should be discarded.
You would recall that different groups, politicians have since called for the resignation of the Minister over his past support for terror groups insisting that Pantami’s renunciation was not enough.
But in the interview, Gumi said Nigeria should get more people like Pantami and put them in power instead of calling for his removal.
“You cannot Islamise the whole world. Jesus Christ came; he could not Christianise the whole world. Nobody can Islamise or Christianise Nigeria,” Gumi began.
“All his actions, one hundred percent, shows he is not a terrorist. Those who are terrorists are after his life. The Minister should continue. His presence there is fighting the terrorist ideology.
“Show me, one person, he has killed. He has not killed anybody. He has not ordered the killing of anybody. Discard the fake news.
“The man is stabilizing a government among a section of youths, which we want them to come and join in nation-building. They should not throw him away. Leave him. He is not a terrorist sympathizer.
“And you people are fighting them. No. You should get more people like Pantami and put them in power. It will stabilize. Don’t remove him. You’ll regret,” he stated.

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