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NAICOM To Compel Insurers To Cover Strikes, Riots, Civil Commotion

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The Commissioner for Insurance, Sunday Thomas, said the National Insurance Commission will soon be issuing fresh directives to insurance companies to cover risks arising from strikes, riot and civil commotion.

Thomas, who stated this at this year’s
Professionals Forum organised by the Chartered Insurance Institute of Nigeria in Abeokuta, Ogun State, lamented the recent nationwide protests in Nigeria.

The agitation by EndSARS protesters was hijacked by hoodlums who took advantage of the protest to unleash mayhem on several cities.

The NAICOM boss said the recent outbreak of protests and civil unrest across the country and the resultant losses had exposed the vulnerability of government, businesses and individuals to unforeseen events.

These incidents, according to him have further reinforced the value and necessity of the insurance industry.

He said risks arising from strikes, riot and civil commotion which were redundant in the past and which by competition are mostly offered free of charge must now be adequately rated as an important product for the survival of Nigerian businesses.

However, he lamented that “these incidents are likely to increase insurance claims, thereby exacerbating the already weakened liquidity and capability of insurance companies.”

The NAICOM boss said the incidents have further reinforced the need for proper underwriting to ensure insurers are able to settle corresponding claims obligations to cushion the effect of losses on Nigerian households and businesses.

He said, “It is pertinent to note that insurance coverage for Strike, Riot and Civil Commotion clauses, which were redundant in the past and which by competition are mostly offered free of charge must now be adequately rated as an important product for the survival of Nigerian businesses.

“The Commission will be issuing directives to ensure that underwriting is strengthened to appropriately rate and charge requisite premiums so that profitability can be guaranteed and claims are settled promptly without financial strain on the companies.

He noted that while most losses arising from the Coronavirus pandemic are not adequately covered by existing insurance policies, it had become obvious that current insurance product offerings are not adequate to respond to emergent risks and needs of the society.

Thomas said there is, therefore, the need for a review of conventional insurance products in order to upscale the value proposition of the Nigerian insurance industry.

“We cannot continue to ignore the impact of unforeseen events on individuals, businesses, and the insurance industry as a whole.

Thomas also said insurance should act as the platform to relaunch economic growth.

He said, “As Nigeria reals in the pain of the destruction and losses suffered this year, the Nigeria insurance industry must utilise the opportunity to lead in the quick recovery and restoration of the affected businesses and also showcase its role in reinforcing the economic resilience of individuals, businesses and the economy at large.”

He also linked the increased propensity for claims to the suddenness of the Covid-19 pandemic which imposed immense pressure on all businesses including insurance business.

He said claims could come from pressures faced by consumers in the form of reduced finance and business activities, lack of access to credit, expiration and wastage of perishable goods, temporary or permanent business closures and employee contract terminations, life threatening and death.

The Commissioner said the pandemic had curtailed the ability of the industry to sell insurance products which in turn reduced premium income because of the traditional in-person sales and marketing.

This, according to him, had necessitated the need for a robust online automated marketing and feedback system.

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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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