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Lloyd’s Faces COVID-19 Claims From Multiple Insurance Lines, Says CEO

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Lloyd’s insurers face COVID-19 related claims from approximately 14 categories of insurance, said Chief Executive Officer John Neal during a media call to discuss the market’s 2019 results.

Neal said it is too early for the market to assess the likely quantum of insurance losses from COVID-19, but a whole range of classes of business would be affected. He emphasized that Lloyd’s is treating the COVID-19 crisis as it would any other form of catastrophic loss.

In the main, Lloyd’s expected losses will arise from lines such as event cancellation insurance, travel insurance, medical malpractice, workers’ compensation and employers liability from groups such as health care workers and airline flight attendants, Neal said.

Neal confirmed that other areas of exposure include potential lawsuits from general liability claims against cruise companies and hotels, for example. And then there are the economic losses affecting directors and officers, trade credit, political risk, surety and mortgage.

He said the market’s immediate concerns were on the effects of the economic crisis on the balance sheet, rather than on the P&L from underwriting.

Lloyd’s central solvency ratio was 205% on March 19, dropping from 238% in 2019, while the market-wide solvency ratio (covering individual syndicates with their own reserves) dropped to 146% from 156% last year, which is still robust according to Solvency II standards that require a ratio above 100%.

During the Q&A, Neal noted that event cancellation insurance is the easiest line “to get your arms around,” which will include the Olympics, Wimbledon and the Glastonbury music festival in the UK.

“We are an insurer of event cancellation but not as big as the Munich Re’s and Swiss Re’s of this world. It’s not our over-arching issue.”

Swiss Re announced recently that it has an estimated overall market share of approximately 15% to event management and cancellation covers that could be claimed due to COVID-19. Before the Tokyo Olympics were postponed, John Dacey, group chief financial officer, said, Swiss Re has a specific exposure of $250 million to the Games. With postponement, analysts agree, the insurance exposure is less than it would have been if the event were canceled.

Dacey went on to say that the company has an exposure somewhere in the middle between $100 million and $999 million for other events scheduled over the rest of the year, split between its Corporate Solutions and P&C Reinsurance units for other events scheduled over the rest of the calendar year.

Munich Re has not yet released any numbers connected to COVID-19, although it said in a recent statement that the group’s economic position remains strong even in the current circumstances. “Even in the very unlikely scenario of a worldwide pandemic equivalent to a 200-year event, insurance claims are expected to be similar in scope to a medium-sized natural catastrophe in property-casualty reinsurance.”

Neal said the market would communicate its market losses in early May, having learned the lesson of the 9/11 terrorist attacks when losses were released too soon and had to be adjusted. “It’s tempting to rush out with a figure but there’s nothing worse than rushing out with the wrong figures. So, let’s make sure we get the numbers right before we go forward.”

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NERC: Over 1m Electricity Consumers Have Received Prepaid Meters

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Labour Warns FG Against Electricity Tariff Hike 

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The Nigeria Labour Congress faulted plans to allegedly sell the Transmission Company of Nigeria, saying it will lead to an increase in electricity tariff.

The NLC President, Mr Ayuba Wabba, said this in a statement titled, “This Kite will not Fly’’ on Friday.

Wabba explained that instead of allegedly planning to sell the transmission company, FG should focus on improving the electricity supply.

He described the attempt to hand over the TCN to a few ‘privileged’ Nigerians as self-serving, obtuse, odious, morally reprehensible and criminal.

The NLC president said, “The TCN is a strategic economic asset of immense national security implications. This is because the TCN traverses all nooks and crannies of Nigeria.

“It will be wrong that our country will be deliberately exposed to an avoidable vulnerability and thus, provide an opportunity to others to restrain the Nigerian state.

“We apprehend that the planned sale of the TCN is only an attempt to further confound the people and concurrently raise electricity tariff. Unfortunately, this time around, Nigerians have had enough.

“The government cannot promise improved power supply to consumers by the planned sale of TCN. The under-the-table scheming as transparent privatisation cannot pass muster.

“It is an unsavoury narrative for our country, that even the privatised assets, which have survived the rapacity of the new owners, have been turned into unrealisable collaterals for unpayable loans.

“This constitutes a bone stuck in the throat of financial institutions and sundry creditors.”

Wabba explained that the plan would “fundamentally weaken the security of the nation and above all, deprive the people of their age-old investments in the commanding heights of the Nigerian economy”.

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FG To Consider Death Penalty For Rail Vandals – Amaechi

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The federal government says it may consider a death penalty for vandals of critical railway equipment in the country.

Rotimi Ameachi, minister of transportation, stated this on Monday, during a town hall meeting on “protecting public infrastructure” in Abuja.

On May 8, the Nigeria Railway Corporation (NRC) announced the arrest of two persons suspected of vandalising rail tracks along the Kaduna-Zaria rail line.

Few days later, suspected vandals were arrested for destroying and carting away tracks and rail rods laid on a section of the Warri-Itakpe rail line.

On May 16, the Kaduna state police command said it arrested five suspected rail-trail vandals at Dalle Village of Jema’a LGA and recovered two trucks loaded with locomotive railway sleepers.

After the Warri-Itakpe incident, the senate asked the federal government and security agencies to ensure that those caught vandalising rail lines across Nigeria are given maximum punishment without a fine.

”I am not quantifying the material cost; what I am quantifying is the lives that will be lost,” Ameachi said at the town hall meeting.

“Imagine that a driver of a rail track is driving and suddenly bumps into a track that has been severed, what happens? It will derail.

“If it derails, can you quantify how many passengers that would have died in the course of one man thinking he is making money?

”Some people have recommended that since these people are killing people, if an accident happens people will die, so we should go back to the National Assembly and pass a law that does not only criminalise the action but consequences should be death.”

The minister also said track vandalism is carried out in collaboration with foreign partners.

”In Jos, they arrested a Chinese company that bought those tracks from them, went to court and found them guilty and fined them N200, 000. So there must be consequences as N200,000 is not enough,” he added.

“Lagos and the Western District recorded one, North Western 31, Northern District 10, North Eastern 43, Eastern 36 and North Central 50 incidents of vandalism. Abuja-Kaduna has 13, Warri-Itakpe 2 and Lagos -Ibadan nill.”

Amaechi, who frowned at traders selling items on railway tracks, especially in Port Harcourt and Lagos, advised individuals engaging in the practice to desist or face the penalties.

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