By Sola Alabadan
As many companies are having to shutdown their premises temporarily at short notice due to the Covid 19 pandemic, the risk consultants of Allianz Global Corporate & Specialty (AGCS), said improper action or negligence when decommissioning buildings and production facilities brings risks for companies. Mothballed factories or offices are by no means safe from fire or other hazards – in fact such risks can be exacerbated when premises are idle or largely unoccupied.
In a new publication, Coronavirus: Safety Measures For Businesses Forced To Temporarily Close Their Premises, AGCS experts provide an overview of general security and prevention measures to help avoid physical damages, such as regular checks of fire protection systems and the safe storage of flammable materials and liquids if premises have to be shutdown. In response, AGCS is also increasingly providing security advice to its customers via remote monitoring technologies that digitally visualize buildings and security features through photo and video recordings without the need for many people to be physically on site.
“We already see a number of losses that occur on holidays or weekends when employees are not largely present on sites or premises,” says Stephan Barnard, Regional Head of Risk Consulting, AGCS Africa: “The production and operating shutdowns currently being caused by the coronavirus pandemic can also bring increasing hazards for businesses.” Among the industries most affected are automotive manufacturers and suppliers, airlines, airport operators, mechanical and plant engineering firms, the hotel industry and many other large and small production and service companies.
The coronavirus outbreak has led to considerable disruption for both individuals and business operations worldwide. For businesses, the growing number of restrictions imposed by public authorities means that offices, factories and other sites may remain unused or unattended for a longer period of time than usual, as they are ordered to close.
“The potential damage caused by fire or as a result of inadequate maintenance remains, or even increases, when operations are shutdown. There are specific measures for loss prevention that can be followed in order to prevent damage during the shutdown of operational facilities as much as possible,” Barnard says. If possible, regular inspections and tests of fire protection systems should be continued, as these can greatly reduce the effects of a fire. An AGCS analysis of loss events in the insurance industry shows that fires account for almost a quarter (24%) of the value of all insured events in industrial insurance over a period of five years. Fires have caused insurance losses worth more than 14 billion euros from around 9,500 claims.
AGCS Risk Consultants focus on four main areas of loss prevention measures in the publication: reducing the risk of fire, safe storage of flammable materials and liquids, compliance with utility and services guidelines, and the use of best practices in building safety and maintenance.
Specifically, it is recommended, for example, that companies consider regular checks of all existing automatic fire detection systems, sprinkler systems and fire pumps, and other existing fire protection systems, even if this is difficult in the current circumstances.
Highly flammable materials such as raw and finished goods, packaging, pallets, waste and flammable liquids located within shutdown buildings should be reduced as much as possible. Where this is not possible, a safety distance of at least 1.5 meters should be maintained between electrical equipment and any remaining materials.
Another measure to consider is that companies decommission all hazardous process and utility equipment, including pipes for flammable liquids and gases. Depending on the specifics of the location, power to the premises should also be shut down, except where required for fire alarms, fire safety and security systems. Entrance and exit doors should be secured with high quality locking systems and interior and exterior lighting should be kept to a minimum, as necessary for inspection, security patrols and access purposes.
NAICOM Licences Seven New Insurance Firms
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.”
Emirates Offers Travellers $500,000 Multi-risk Travel Cover
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.
COVID-19 Pandemic Poses Severe Challenges To African Insurers, AIO Reveals
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.