Monday, 31 March 2014

Owa wins CIIN’s maiden staff award

 Idowu Owa (Centre), winner of the CIIN 2013 Staff of the Year Award flanked with the Management team of CIIN. From left: Director, Corporate Affairs,  Joseph Obah; Director, Examinations, Ebun Ayeni,  Director-General Kola Ahmed, and Director Membership, Moshood Akinyemiat the presentation of the award in Lagos.

Chuks Udo Okonta

The Director-General, Chartered Insurance Institute of Nigeria (CIIN) Kola Ahmed has initiated staff award to reward excellence and encourage greater diligence amongst the secretariat staff.

A statement by Director, Corporate Affairs     CIIN Joseph Obah, said Idowu Owa was selected as the Staff of the Year 2013 by virtue of his outstanding performance as staff of the CIIN Secretariat, adding that the verdict was reached through a stringent selection process involving nominations by the staff.

 He noted that CIIN staff eligible for the annual award, are those in the cadres of Assistant Manager and below.

Owa, who hails from Kogi State, holds an Ordinary National Diploma in Tourism from the Federal Polytechnic, Idah, Kogi State.  He is a dependable staffer who combines efficiency with effectiveness in his duties; Owa’s emergence is well deserved as members of the Institute’s Staff paid glowing tributes to him.

Owa joined the Institute in 2007 and has continued to serve diligently.

The Director-General while presenting a commemorative plaque to Owa, enjoined him not to rest on his oars, but endeavour to achieve more success at any given task.

Ahmed also encouraged all other members of staff to see this year’s Awards as a motivation to strive to do better at their duties.                                                  


NAICOM approves two firms' 2013 accounts out of three submitted

Chuks Udo Okonta

The National Insurance Commission (NAICOM) has approved the 2013 financial accounts of Custodian General and Life Insurance, while work is said to be in progress on that of Mansard Insurance Plc which is the third firm to have submitted.

According to the 2013 financial statements submission status, published today Monday by NAICOM, only the three firms have so far sent in their accounts. It is expected that more firms will follow suit as they claimed to have being putting finishing touches on their accounts.  

Operators have promised to remove the huddles that stemmed the approval of their 2012 accounts, some have even gone to change their auditors to enable them meet their International Financial Reporting Standard requirements.

Teachers‘ll not create awareness for you, insurers told

·         Schools seek close ties with insurers to boost awareness

Chuks Udo Okonta

Insurers have been told to leverage the introduction of insurance subject in secondary schools to enhance awareness. They were warned never to expect teachers and school authorities to execute the exercise on their behalf.
 A Representative of Lagos State Ministry of Education Farinloye Olumide, told  Inspen that insurers should not wait for teachers and the ministry of education to engage in insurance awareness creation, adding that the government has helped the insurance practitioners by making their profession a subject to be taught at the early stage of the citizenry.

He noted that the initiative to educate the pupils on how insurance can improve their lives, will help the operators grow their businesses and the public mitigate risks.

U.K. Investor makes foray into U.S. insurance

By Leslie Scism

A British entrepreneur plans to spend as much as $2 billion of investors' money in the U.S. over the next several years trying to replicate his success in scooping up life insurers in the U.K.

A new company headed by 50-year-old Clive Cowdery won approval from Nebraska regulators last week for its first acquisition, a $600 million deal for a life-insurance unit sold by Allstate Corp., a company best known for its car and home policies.

Mr. Cowdery is using $500 million drawn from a $2 billion pool of equity committed by about a dozen U.S. pension funds, life-insurance companies and other investors, he said last week. The rest of the deal is being funded by bank debt.

The new company, Resolution Life Holdings, is a run-off specialist, meaning it will manage investments backing the policies, assist existing customers and pay claims but won't sell new policies. It follows the model of two companies that Mr. Cowdery launched, but no longer owns, in the U.K.

Industry consultants and bankers don't think Resolution Life will have difficulty finding things to buy: Many insurers have been putting blocks of business up for sale amid low interest rates that crimp profits and sluggish sales for some types of life insurance.

"What looks like a problem to the seller looks like an opportunity to us," said Mr. Cowdery, chairman of Resolution Life.

Resolution isn't publicly disclosing its investors, but Prudential Financial Inc., PRU +0.34%

whose former chief financial officer, Richard Carbone, is a Resolution Life director, confirmed it is among Resolution's backers.

Blocks of old insurance policies represent "an asset class that throws off predictable cash," which can be attractive to long-term investors, Mr. Carbone said.

In announcing the sale of the Lincoln Benefit Life unit last year, Allstate said it was narrowing the focus of its remaining life-insurance business to products sold through Allstate agencies and employers. The Lincoln unit deployed a different means of distribution, specializing in life-insurance and annuity sales through independent agents and brokerage firms.

Allstate said it settled on Resolution as a buyer because of Mr. Cowdery's track record in the U.K. in managing in-force life-insurance policies.

Mr. Cowdery said he got the idea for a run-off business when working for General Electric Co. GE +0.27%

in the 1990s and early 2000s, in a job that entailed scouting out European and British insurers for possible acquisitions.

"Most of the things I would look at, I would come back and say, 'Look, all the value is in the in-force business, not the new business,'" he said. "The light bulb that went off in my head was that life-insurance companies, if they were no longer exposed to the risk of writing new policies, could provide stable cash flow" to investors.

Resolution aims to deliver 10% to 12% annual returns to its investors, he said. "Think of us as a yield play," he said.

In a recent sign of pension-fund hunger for such investments, Canada Pension Plan Investment Board on March 21 said it was buying Wilton ReHolding Ltd. for $1.8 billion from a group of investors. Wilton Re's operations include buying closed blocks of life-insurance policies.

Mr. Cowdery said Resolution would conservatively invest the money backing policyholders' contracts. "We are insurance nerds," not aggressive investors, he said.

Mr. Cowdery doesn't have a university education and worked as a life-insurance salesman early in his career.

By 2008, his British operations had created a personal fortune of about £160 million ($266.5 million), the latest figure that has been disclosed about his wealth. Last week he declined to provide an update, but said: "Things have gone well since."

Source The Wall Street Journal

Funeral director faked deaths for insurance payouts, court told

A former Adelaide funeral director made false insurance claims totalling $430,000 by faking deaths, court documents allege.

Robin George Knight, 45, is charged with 118 counts of fraud and one of attempted fraud between 2008 and last year.

He was the director of Knight Brenton James Funeral Directors at Para Hills West when police allege he arranged prepaid funeral bonds for clients then made fake claims to insurers that the policyholders had died.

Court records allege the Catholic Development Fund, KeyInvest and Lifeplan lost a total of $430,000.

Holden Hill Magistrates Court has adjourned the case until June to allow negotiations between Knight's lawyer and the prosecution.

As he left the hearing, Knight told reporters: "Sorry, no comment folks. Sorry, I'd love to talk but I'm on lawyers' instructions."

Source ABC

Business Insurance Introduces Inaugural Cyber Risk Summit

Business Insurance, a news and information source for executives concerned about risk and the impact on their businesses, announced that it will host the inaugural Cyber Risk Summit on May 22, at the W Hotel in Washington, D.C.. "Given the inherent vulnerability of networks, risk managers need to engage a broad range of internal constituencies, from the...

Business Insurance, a news and information source for executives concerned about risk and the impact on their businesses, announced that it will host the inaugural Cyber Risk Summit on May 22, at the W Hotel in Washington, D.C.

According to a release, this one-day leadership conference will provide a discussion forum for business executives, insurance companies and policymakers on more effective private and public responses to cyber risk management. Topics to be discussed by expert speakers will include state and federal regulatory and legislative initiatives, efforts to develop a common cyber security framework, the threats from cyber espionage and terrorism, and the development of public and private mechanisms to finance and transfer losses from cyber events. With a full agenda planned including a cyber risk keynote speaker and discussion panels covering cyber risk topics, plus breakfast, lunch and a closing reception the Cyber Risk Summit is a must-attend conference for information gathering and networking with those concerned with managing cyber risk.

The Cyber Risk Summit is intended for corporate executives facing cyber exposures and liabilities, including risk managers and C- Suite executives, state and federal legislators and regulators, insurance and reinsurance executives, law firms and cyber risk consultants, and cyber security technology providers.

"Given the inherent vulnerability of networks, risk managers need to engage a broad range of internal constituencies, from the information technology department to top executives," says Tom Ridge, CEO of crisis management advisory firm Ridge Global L.L.C. and former secretary of the U.S. Department of Homeland Security, during his keynote address at the recent Business Insurance 2014 Risk Management Summit in New York. "It's gone from being an IT risk to being a business risk," Ridge said, "It has to be a C-suite priority."

"With cyber attacks becoming a far too common occurrence, it is imperative that company executives learn about how to deal with cyber risk exposures, protection and recovery," stated Gavin Souter, Editor at Business Insurance, "The Cyber Risk Summit is the venue that can help executives and risk managers sort through the cyber attack rhetoric and focus on the essentials they need to safeguard their company's financial and intellectual properties well before they get into trouble."

Only five exclusive sponsorship opportunities will be made available for the Cyber Risk Summit. Due to the expected audience, the topic relevancy and the collection experts who will be assembled, sponsorships are expected to sell out fast.

With print, digital, events, lead generation, content marketing and custom solutions, Business Insurance provides access to those directly responsible for risk management, risk financing, employee benefits management and workers compensation.

Source Insurancenewsnet

Insurance deadline is today

Pamela Yip

It’s last call for those who want to sign up for a health care plan through the federal insurance marketplace.

Today is the deadline to sign up, though the federal Health and Human Services Department has outlined "special enrollment periods" for broad groups of people trying to access the online health insurance markets.

Potentially millions of people will still be able to take advantage of extensions announced last week. For instance, those who start an application but aren’t able to finish before Monday’s open enrollment deadline will get a limited amount of time to complete the process for coverage that takes effect May 1.

Last Thursday, the White House said more than 6 million Americans had signed up for private insurance under the Affordable Care Act. No state figures were available.

"Right now we are seeing a surge in consumers coming to and calling call centers," said Julie Bataille, spokeswoman for the Centers for Medicare & Medicaid Services, which is charged with the rollout of the health insurance exchanges. "We’re working hard to ensure that our systems can handle record-high consumer demand over the next few days."

If you want insurance but worry that you can’t afford the cost, you may be eligible for a tax credit to offset the premiums for health plans purchased through the insurance exchange.

You may be eligible for the credit if you meet all of the following:

Buy health insurance through the insurance marketplace.

Are ineligible for coverage through an employer or government plan.

Are within certain income limits.

File a joint tax return, if married.

You can’t be claimed as a dependent by another person.

Under the ACA, the subsidies are tied to the federal poverty level. If you make less than four times or 400 percent of the federal poverty line, you may qualify.

You’ll generally qualify for a premium tax credit if your income falls within the following ranges. The lower your income is within these ranges, the bigger your credit.

$11,490 to $45,960 for individuals.

$15,510 to $62,040 for a family of two.

$19,530 to $78,120 for a family of three.

$23,550 to $94,200 for a family of four.

If you qualify, you have two options:

Have some or all of the estimated credit paid in advance directly to your insurance company to lower what you pay out of pocket for your monthly premiums this year.

If you choose to have advance payments sent to your insurer, you will have to reconcile the payments on your 2014 tax return, which will be filed in 2015.

Wait to get the credit when you file your tax return in 2015.

"Pay premiums as soon as possible so that your coverage will begin at the earliest possible date," said Brian Haile, senior vice president for Health Policy at Jackson Hewitt Tax Service Inc. "I lean toward recommending that customers accept most, if not all, of the advance payments unless they are in jeopardy of going over the 400 percent federal poverty line threshold."

In a special move aimed at victims of domestic violence, the U.S. Treasury Department and Internal Revenue Service released instructions last week that will allow victims to claim the tax credit.

The guidance says that a married person living apart from his or her spouse and who’s unable to file a joint return because of domestic abuse will be able to file as "married filing separately" and still claim the tax credit.

"For victims of domestic abuse, contacting a spouse for purposes of filing a joint return may pose a risk of injury or trauma or, if the spouse is subject to a restraining order, may be legally prohibited," the instructions said.

The guidance was necessary because the IRS has interpreted the law to mean that married taxpayers could claim the premium tax credit only if they filed a joint return, Haile said.

"Today’s news helps to ensure that more survivors of domestic violence will have access to the premium tax credits and qualified health plan coverage," he said.

Follow Pamela Yip on Twitter at @pamelayip.
IN THE KNOW: Where to sign up
People wanting to buy private health insurance through the federal government's insurance marketplace have until Monday to sign up at (1-800-318-2596) or elsewhere.

Local opportunities to sign up for health insurance include:

Planned Parenthood offices in Dallas, North Dallas, Addison, Mesquite, Plano, Denton, Lewisville, West Fort Worth and southwest Fort Worth

Adolescent Health and Wellness Community Fair, Dallas

National Hispanic Council on Aging, Farmers Branch

Bluitt-Flowers Health Center, Dallas

DeHaro-Saldivar Health Center, Dallas

East Dallas Health Center, Dallas

Garland Health Center, Garland

Irving Health Center, Irving

Southeast Dallas Health Center, Dallas

Oak West Health Center, Dallas

Vickery Health Center, Dallas

Parkland Hospital- Main Campus, Dallas

SOURCE: Dallas Morning News research

Microinsurance becomes most dynamic segment of insurance market

International Labour Organization (ILO) has come forward in support of microinsurance which covers 500 million people versus 78 million people in 2008.

Microinsurance Innovation Facility’s head Craig Churchill has made a special statement on this subject, which we bring below.

For some time now, insurers, regulators and governments have grappled with a multi-billion dollar question: Can microinsurance be a viable business proposition and provide value for its low-income clients at the same time?

Based on extensive research and knowledge gathered over the past five years, we can now say "yes, it can."

Microinsurance is coming of age. This insurance mechanism for protecting low-income people against risks, such as accident, illness, death in the family or natural disaster, has developed rapidly over the past few years.

Across Asia, the number of people covered by microinsurance grew by 40 per cent between 2010 and 2012, while in Africa, it grew by more than 200 per cent between 2008 and 2012. Overall, the number of people with microinsurance worldwide has increased from an estimated 78 million to more than 500 million in the past five years.

At the same time, an increasing number of governments are viewing microinsurance as an important mechanism to provide not only disaster cover, but financial security, poverty reduction, economic growth and improved access to healthcare for low-income households.

And there has been impressive growth in the variety, availability and delivery of microinsurance products to low-income households. Indeed, from governments to retailers, non-governmental organizations to insurance companies, an increasingly wide range of players are collaborating to build markets for microinsurance.

Technology innovations have been key. Over the past six years, impressive examples have emerged, many pioneered by grantees of the ILO’s Microinsurance Innovation Facility. They include the use of satellite imagery to support livestock insurance in Kenya; establishment of sophisticated back-office systems to provide cashless claims processing for health microinsurance in India; and the use of mobile network operators to sell microinsurance to the ever increasing number of low-income people using mobile phones.

Mobile network operators have been particularly effective in expanding the outreach of insurance in Africa, with many even offering free insurance to entice greater loyalty from their customers.

With an estimated 600 million mobile phone users on the continent, the growth opportunities are huge.

The Churchill’s statement is also strengthened by the ILO’s Microinsurance Innovation Facility annual report which says of involvement of 33 of the world’s 50 largest insurance companies in this segment.

The report is available at link:

Today the ILO’s Microinsurance Innovation Facility is now embarking on a new journey. From our initial, first five-year phase of innovation, research, knowledge gathering and sharing of experience, we are now shifting gears and undertaking a five-year "Quality of Scale" programme designed to bring this knowledge to those who can best put it into practice.

"The goal is to get microinsurance to an additional 100 million low-income persons. And we aim to do this by promoting accelerated market development, public-private partnerships and further innovations to increase access to microinsurance. We believe in the power of microinsurance to change peoples’ lives, protect their health and their assets and give them the financial peace of mind to invest for the future. Over the next five years we will ensure that the promise of microinsurance is realized for millions more people around the globe," Churchill stated.

Source ABC.AZ

LeapFrog to invest $29m in IFMR Capital

LeapFrog Investments, the specialist investor in financial services in growth markets Africa and Asia, has announced a U.S $29m investment into India’s IFMR Capital. The deal is the first to be made from LeapFrog’s Fund II.

Acting as a bridge between capital markets and high quality financial institutions that reach under-served households and businesses, IFMR Capital operates in over 345 districts across 24 states in India. Today, these institutions deliver credit, insurance and other financial services to over 6.6 million active borrowers and 7.6 million insured customers.

Besides the capital, LeapFrog Investments brings on-board their operational expertise and knowledge of best practices across international markets. A key focus of the partnership will be to leverage IFMR Capital’s structuring expertise, reach and relationships across financial products and sectors in India.

Commenting on the deal, Dr. Jim Roth, Co-Founder of LeapFrog Investments, said, "IFMR Capital is led by an impressive leadership team that aligns exceptional business acumen with a strong sense of social purpose. The demand for financial springboards and safety nets in India is growing fast, on a very large scale; IFMR Capital recognized this need early. In a short time, they have built a high road between the capital markets and the institutions and India’s emerging middle class; we look forward to working with them now to create a financial highway."

CEO of IFMR Capital, Dr. Kshama Fernandes, said, "There is a strong shared sense of purpose between LeapFrog Investments and IFMR Capital about our approach towards sustainably promoting financial inclusion. We believe we will be able to leverage our common strengths towards this goal and are delighted to have them as our partner. Their investment and their international team’s distinctive expertise will help enhance our capacity and our ability to provide valuable product and service offerings to our clients. It will also deepen our access to a wider class of international investors."

Bindu Ananth, President of IFMR Trust said, "This investment is an important milestone for us. IFMR Capital was created by us to enable risk transmission for high-quality originators operating in under-banked markets. The participation of LeapFrog significantly strengthens our ability to work with a much larger number of originators across asset classes in the coming years and make access to financial services a reality for millions of low-income households in India".

The30millionmicro, small and medium–sized enterprises in India today account for 45% of Indian industrial output, yet only 5-10% have access to formal sources of funding. The market for financing such enterprises is expected to grow from US$ 1.5 billion to US$ 6.35billion by 2020. The total affordable housing shortage in India today represents a financing requirement of US$ 185 billion.

IFMR Capital has, over the last five years, developed a specialized platform for enabling access to finance for these sectors. With over US$ 1 billion of financing enabled across 150 plus capital market transactions, IFMR Capital is well poised to cater to the requirement of capital across these sectors.

LeapFrog has significant experience investing in and building profitable financial service companies reaching emerging consumers in growth markets. In 2013, LeapFrog’s portfolio companies reached 19.5 million people across 13 countries. Over 15 million of these people are low-income or emerging consumers, the vast majority with limited or no previous access to financial services.

Rothschild acted as financial advisor to IFMR Capital.
 Source India Infoline

Sales of traditional insurance products benefit from tighter rules on investment-linked policies

Enoch Yiu

A tightening of the regulations on investment-linked insurance policies since July has made insurers shift focus to basic life insurance policies and annuity products, a trend industry players expect to continue this year.

Statistics released by the government last week showed total premiums from new investment-linked insurance policies last year rose 11.7 per cent from 2012 to HK$19.1 billion last year.

The growth rate was lower than that of total premiums from traditional insurance policies, which grew by more than a fifth last year to HK$73 billion.

Tay Keng Puang, managing director and chief executive of MassMutual Asia, said insurers have had to cope with the challenges of the new regulation by urging sales agents to promote traditional life policies, which allow insurance companies to decide how to invest the premiums and pay guaranteed dividends to policyholders.

MassMutual also focuses on annuity products, a type of retirement policy that allows policyholders to pay premiums for some years for guaranteed monthly payments until death.

Sales of annuity policies rose 73 per cent last year to HK$3.13 billion, government statistics show.

"With an ageing population, the demand for annuity products has increased substantially in Hong Kong in recent years," Tay said. "This is also related to the fact that the retirement protection offered by the Mandatory Provident Fund is too small, and policyholders have to find alternatives."

Chan Kin-por, the lawmaker representing the insurance sector, said sales of investment-linked policies last year grew more slowly than those of traditional insurance policies as a result of market volatility and tighter regulation.

Several banks stopped selling investment-linked policies since the Hong Kong Monetary Authority imposed tougher regulations on these products in July. The tightening of the rules came after policyholders complained of misselling.

Investment-linked policies allow policyholders to choose how to invest their premiums in different funds, making them responsible for the losses as well as the gains from the investment.

Source South China Morning Post

Saturday, 29 March 2014

How to Cope With a Shrinking Pension

Here's what the fading prominence of private and public pensions means for you.

A 2014 survey found that 36 percent of workers have stashed away less than $1,000 in retirement savings and investments, making shrinking pensions an even more pronounced issue.

By Geoff Williams

For those who don't know, a pension is retirement money funded by an employer. You receive the money, either as a lump sum or in monthly installments for the rest of your life.

Many public pensions, funded by the government, are in the midst of reforms, and some fear that the financial promises made to workers won't be kept. In March, billionaire investor Warren Buffett wrote in his annual report to shareholders of Berkshire Hathaway Inc. that "during the next decade, you will read a lot of news – bad news – about public pension plans." He called them a "gigantic financial tapeworm."

[Read: How to Monitor Your Pension's Health.]

Private pensions, meanwhile, aren't looking robust, either. According to the Bureau of Labor Statistics, during the early 1990s, 35 percent of private industry employees were working for an employer that provided a pension. By 2011, the number had dropped to 18 percent.

Which begs a couple questions: Why are pensions struggling? And if you have one that looks as though it may be cut, what should you do?

Why pensions are struggling. Since 1875, when the American Express Company began offering the country's first pension, such plans have been part of the retirement landscape. Many people assumed it would always be that way.

"[It] was even used as a way to lure workers during World War II because of the labor shortage," says Kenneth Hoffman, managing director and partner at financial services firm HighTower HSW Advisors. "But, as financial markets became erratic and interest rates dropped, the cost of funding pension plans saddled those corporate balance sheets with enormous liabilities."

Hoffman adds that many of these large-scale defined benefit plans are disappearing because of the increasing popularity of products like the 401(k). "Corporations can now shift the responsibility from themselves to the employee," he says.

Many employees didn't mind taking on the responsibility. "Workers saw advantages in having 401(k)s with them as they moved from job to job," says Jean-Luc Bourdon, a personal financial specialist with BrightPath Wealth Planning in Santa Barbara, Calif.

Many lament the fading prominence of private and public pensions because the replacements – 401(k)s and individual retirement accounts – are not funding retirement the way your accountant or financial advisor would hope. That's because as a group, people aren't as disciplined about sinking money into retirement on their own.

[Read: How to Take Charge of Your 401(k).]

With a company pension, you get a stream of retirement income simply for coming to work and doing your job; your employer puts money into the pension. With a 401(k) or an IRA, you have to put some of your own skin in the game.

It's simply a riskier way to fund retirement. "Instead of the safe, lifelong pension system, the retiree now participates in a system that encourages exposure to the capital markets, which have experienced two market crashes within the past 14 years," says Gregory Gallo, co-founder of the Opus Group, LLC, a wealth management firm in Red Bank, N.J. "Now we are asking hardworking Americans, blue and white collar alike, who have worked and saved for their entire lives, to figure out their retirement themselves?"

It turns out that 36 percent of workers have less than $1,000 in retirement savings and investments, not including a house or defined benefit plans, according to a 2014 survey of 1,000 workers and 501 retirees by the Employee Benefit Research Institute and Greenwald & Associates.

What to do if your pension is shrinking. If you're living off a pension or you have a pension coming to you, the good news is that "it won't disappear 100 percent," Bourdon says. "I can't think of an instance where that's happened."

That's because if a pension plan does fall apart and can no longer fulfill its financial obligations, the Pension Benefit Guaranty Corporation will take over and pay your benefits. (There is a limit to what will be paid, however. In 2014, the maximum amount the PBGC will pay for a single-employer plan is $59,318.16 a year.)

While your pension may not disappear, it could be trimmed, tweaked and cut apart so that you don't receive as much as you planned. For instance, the city of Detroit recently put forth a proposal that if accepted by the bankruptcy court could cut Detroit workers’ monthly pension checks as much as 34 percent.

Cuts like that may not be so devastating if you're a decade or more away from retirement have some time to readjust.

"It's simple," Hoffman says. "Save more today, work longer or take more risk with your retirement savings. Since short-term interest rates have been near zero since the Great Recession, retiring baby boomers have not been able to get the returns from bonds that their parents were used to."

[See: 12 Surprising Facts About Boomer Retirement.]

But it isn't so simple if you're among those who have less than $1,000 squirreled away for retirement, or you're already retired and getting another job isn't an option. In that case, Bourdon says, "You may have to think about scaling back. The most significant adjustment with living expenses is usually with your house. You could sell and rent, or downsize to a smaller house, or rent a room in your house."

If you have considerably more than $1,000 saved for retirement, you may want to consider purchasing an annuity, says Aaron Brachman, a certified financial planner with RBC Wealth Management U.S.

And if you're able from a financial and health perspective, he says you should also consider taking Social Security later than you might have planned. "The longer you wait to draw upon Social Security, the higher your monthly payments will be, up until age 70," Brachman says.

He adds that buying an annuity and putting off Social Security are often shrewd financial decisions "even if you are not afraid that your pension will ever be reduced."

Source US News

Africa needs fewer but stronger insurance firms – Oyetunji

Continental Reinsurance Plc is the largest reinsurer in West Africa. The Managing Director of the firm, Dr. Femi Oyetunji, speaks with NIKE POPOOLA on how to groom formidable insurance industries that can compete favourably with those in developed economies.

What is the state of reinsurance business in Africa?
Each country has its own peculiarities but insurance principles are the same everywhere. For us to succeed, in each region where we have ground presence, we have brought in local people to run those companies because there is nothing as important as local knowledge. This has helped us in terms of managing risks in different locations.

When we set out for expansion, we came up with a five-year strategy to achieve that vision, premised on proximity to our clients, providing world-class service and the much needed value added services to our clients.

First, we obtained a licence to open a branch office in Abidjan in March 2012 and appointed a regional director. Then, we were faced with an opportunity to convert our Nairobi branch to a subsidiary company. We considered all aspects of converting to a subsidiary and one of the most important motivations for incorporating in Kenya was that it would make us local in Kenya and East Africa.

What are the opportunities of doing underwriting business in Nigeria and Africa?
The Nigerian economy is projected to be the largest in Africa over the next few years; hence Nigeria will remain dominant in our business. We have moved from a branch network to a subsidiary network, each company having its own board, its own chief executive officer with specific charge to develop our business in their region of responsibility. In carving these out, we have been careful not to have any country overlap in two subsidiaries. The next stage of our strategy is to raise additional capital. The board and the shareholders of Continental Re have approved the increase of our capital and we are well ahead in raising substantial amount of capital to enable us to pursue some of the opportunities that we see across Africa. We see opportunities in organic growth and we see opportunities in acquisitions. As I speak, we have entered into discussions with reinsurance companies in West Africa, East Africa and in Southern Africa. We believe that Africa must have strong and large insurance institutions so that we can keep African premiums in Africa. I spoke to a number of insurance companies at the West African Insurance Companies Association conference last year and I challenged them on this issue. Over 100 insurance companies in the five WAICA countries wrote $2bn of premiums in 2012 while one company, Santam of South Africa, wrote $2.2bn in the same period. Yet, we are competing in a world where AIG, Prudential, Allianz and the rest also operate. What we have all agreed upon at Continental Re is that we cannot achieve our vision and our goal by doing things the same way or by marginal incremental growth. It was obvious that we had to stir up the market, be innovative and think outside the box.

What is the relevance of insurance to an individual’s management planning?
Insurance is part of your financial management planning for the future. Insurance helps you to protect against unforeseen circumstances, whether in your life or asset. Insurance should be the number one thing you should consider after paying your taxes.

Does low premium charged by underwriters have any effect on the cover you provide for them?
Of course, it does. That is why we invest in training to bring underwriters up to date with the latest underwriting procedures. As you are aware, a lot of these businesses go through treaties and as such we don’t get to dictate the rates. However, we are progressively putting in place structures whereby we can see the rates applied and adjust the level of reinsurance support.

Ultimately, we want to know the risks and we are not going to provide cover if rates are too low.

What do you feel about some sectors trying to take over some insurance business activities?
This development is not welcomed by the insurance industry in Nigeria. The industry, in conjunction with the National Insurance Commission, is putting together a paper to the effect that those activities are best served by specialists, which happen to be insurance companies.

What has fostered Continental Re’s growth and expansion in Africa?
When I took over as the chief executive officer of Continental Reinsurance in January 2011, I inherited the leadership of the largest privately owned African reinsurance company excluding South Africa. The capital injection of $66m in 2007 and the solid foundation I met showed that we had a great opportunity of building a privately-owned world-class Pan-African reinsurance company. My mission for Continental Reinsurance right from the first day was that of transforming the company into a world-class Pan-African reinsurance company. That meant we needed a new strategy and a new approach. We were perceived as a local Nigeria reinsurer when in fact we were already at that time transacting business out of Lagos, Douala and Nairobi with clients in some 30 countries across Africa. So, the first step for me was to fashion a vision for the company. I shared my thoughts with my colleagues, and collectively, we adopted the vision for Continental Reinsurance to become the premier Pan African Reinsurer.

With Nigeria being our largest market, we took the decision to go into other parts of Africa to carry out that vision. This means providing reinsurance support and services across Africa, going outside Nigeria to deepen ties with the market across Africa and this is how we have been able to achieve the good growth we have seen in the last few years.

What is your contribution to capacity development in Nigeria’s insurance industry?
At Continental Re, we have in the last two years doubled our spending on training. We have sent some of our employees to India, South Africa and Europe for training to increase and enhance their skills. We also conduct training for the various markets where we are operating. It is our responsibility to train the market and we believe that in insurance, our most valuable assets are our people.

Why did you extend the capacity development to other countries through the chief executive officers’ summit in Kenya?
It is important for us at Continental Reinsurance to provide a platform for African insurance leaders to come together to brainstorm and discuss ideas that will move the insurance industry forward in Africa. We organised our first chief executive officers summit in Kenya. The summit, which we hope to organise on an annual basis, is an opportunity for intellectual discourse amongst business leaders and it is our expectation that these deep discussions on current issues will propel our industry into the forefront of the financial services industry in Africa.

This summit was the first we have organised and it was very successful. We had over 60 participants from eight different countries, all key decision makers and I am very excited at the feedback we have received so far.

We have achieved what we set out to do, creating the platform, and this positive feedback encourages us to start planning for next year’s summit and make it even more effective.

What support should the government render to the insurance sector?
During our discussions at the chief executive officers’ summit, the consensus was that there are too many insurance companies in every country across Africa and we would like to see large and highly capitalised insurance companies. Whether it is through consolidation or through mergers and acquisitions, there is a need to reduce the number. On the long run, instead of allowing the small ones to die, what we are hoping is that the regulator will assist in ‘arranged marriages’, according to some ideas that came up in a session at the summit. They can come together and form more formidable institutions. Otherwise, the small capital bases most of the companies have will not be sufficient to allow them to compete effectively on the long run. So first, the regulators should create a platform where the number of insurance and reinsurance companies can be reduced to achieve critical mass.

Second, it should support the enforcement of compulsory insurances. In every location across Africa, there is compulsory insurance but within our system, the enforcement is lacking.

Source Punch

Pension Scam: Accused person forfeits hotel to FG

Ayorinde Oluokun
Nigeria’s Economic and Financial Crimes Commission, EFCC, on Thursday said it has achieved some success in the prosecution of pension fraud cases.

Briefing journalists in Abuja, the agency’s Head, Media and Publicity, Wilson Uwujaren, said the Commission has called several witnesses in many of the cases under trial and succeeded in securing the final forfeiture of a property linked to Shuaibu Teidi, former director, Pension Accounts, Office of the Head of Service of the Federation, who is facing a 22-count charge bordering on obtaining money by false pretence, conspiracy to commit fraud and concealing the origin of stolen pension funds to the tune of N18.3 billion.

The said property, Brifina Hotel, which is located at Plot 1106 Cadastral Zone, Durumi District, Abuja, was allegedly acquired by Teidi through his company, Badawulu Ventures, for three hundred and thirty nine million naira.

However, he said, the accused person denied ownership of the property despite claims by the original owner that he sold it to Teidi.

On the basis of his denial, the EFCC approached the Federal High Court to seek for a final forfeiture order which was granted by Justice Adeniyi Ademola. The Commission had earlier secured an interim order of forfeiture on the property from Justice Adamu Bello.

Like the pension cases, the Commission has also made appreciable progress in the various oil subsidy cases which are ongoing in court.

He said several witnesses have been called to give evidence before the court in some of the cases.

However, he said one of the accused persons, Seun Ogunbambo has become a fugitive of the law and has consequently been declared wanted by the Commission.

He called on Nigerians with useful information on the whereabouts of Ogunbambo to contact the Commission at the head office or any of the zonal offices in Port Harcourt, Lagos, Kano, Gombe or Enugu.

On the issue of the assets recovered by the Commission from the former governor of Bayelsa State, Dieprieye Alamiyeseigha, Uwujaren said it was unfortunate that some people decided to stir needless controversy in an already settled matter. "I am sure some of you were witnesses in 2010, precisely July 10, 2010, when the assets recovered from Alamiyeseigha were handed over to the Bayelsa State government.

Timipre Sylva, then governor of the state was on hand to receive the assets which included Chelsea Hotel, Abuja from former chairman of EFCC, Mrs. Farida Waziri," he said.

Uwujaren said it was gratifying that the Bayelsa State government acted responsibly by distancing itself from such action.

"If there are issues arising from the handling of the case, or any other case(s) for that matter, the Commission as a responsible corporate organisation is willing to entertain such issues. However, "EFCC will not succumb to the blackmail of any one," he posited.

Mr. Uwujaren further disclosed that the Commission has stepped up the investigation of judges and other judicial officers accused of corruption.

According to him, some of the judicial officers have already been quizzed by the agency while others are still being expected to report for interrogation.

The head, Media and Publicity seized the opportunity to inform the media about the condemn able attack on one of the operatives of the Commission, Jonathan Barde, by a suspect, Tajudeen Oluwanishola.

The operative of the Commission was knocked down by Oluwanishola with his car in order to avoid arrest. The suspect has however been arrested by the Commission and would be prosecuted.

Source PM News

Civil servants urge NASS to redress gratuity in pension reform bill

The Association of Senior Civil Servants of Nigeria on Thursday urged the National Assembly to redress the issue of gratuity in the new Pension Reform Bill, now before it.

The Secretary-General of the association, Mr Alade Lawal, made the appeal in an interview with the News Agency of Nigeria (NAN) in Lagos.

NAN recalls that the Pension Reform Bill, 2013, which is currently before the National Assembly, seeks to replace the Pension Act of 2004.

Lawal said that the union had observed that in the present Pension Act, workers’ terminal benefits were very low when compared to what it was under the 2004 Act.

"If you work for 35 years, instead of receiving something in the range of N12 million under the old arrangement, one gets about N5 million in the present Act.

"The new Pension Act gives you 25 per cent of your total sum and spreads the remaining 75 per cent over a period of 18 years.

"When the 18 years elapse, you are entitled to nothing and so you should go hungry or die.

"We are not happy with this arrangement as most of our members retire into penury and this does not augur well for us as a nation,’’ he said.

Lawal appealed to the National Assembly to ensure gratuity to a worker would provide for the well-being of the worker after retirement.

According to him, the issue of gratuity is very important because it is a form of handshake between you and the employer.

"Gratuity is to assist the worker to immediately settle down after retirement.

"It is to appreciate your efforts while you were in service.

"A certain percentage should be given by the employer to the employee, in addition to his monthly allowance.

"This will make the entire retirement benefits a little bit more meaningful,’’ he added. (NAN)

Source NAN


Expert foresees realisation of N1trn MDRI target in insurance industry

Akin Ogunbiyi, the Managing Director of Mutual Benefits Assurance, says recent returns from micro insurance products can raise the industry’s MDRI target to N1 trillion.

Ogunbiyi said in an interview on Friday in Lagos that operators in the informal sector held the key to the realisation of the N1 trillion target.


Market Development and Re-structuring Initiative (MDRI) is the framework of the National Insurance Commission (NAICOM) for measuring the industry’s growth.

NAICOM had proposed to hit the target in 2012, but failed.

Ogunbiyi said that the sector was becoming more vibrant in line with the objective of Vision 20:2020.

He said that premium in the sector was easy to collect, while its claim report was low and easy to verify.

"Having invested much in the micro insurance business, we are now reaping the benefit.

"We are collecting close to N1 billion monthly on our various micro insurance products.

"We have also boosted employment nationwide with almost 7, 000 insurance foot soldiers who sell various products.

"Imagine what will happen if all insurance companies come on board," he said.

Ogunbiyi said that there were still many areas to explore as the operators could leverage on the over 160 million population.

He, however, said that companies should expect to make some sacrifices at the take off stage due to investments on infrastructure.

According to him, once the foundation is laid and the companies win the trust of potential buyers, consumers will come willingly with their own ideas and needs.

Ogunbiyi said that Mutual Benefits Assurance had registered over 1,000 cooperative societies to market its micro insurance products.

Source NAN

Specialty Insurer Brit Raises Nearly $400 million in London I.P.O.


The specialty insurer Brit said Friday that it had raised 240 million pounds, or about $400 million, as part of an initial public offering on the London Stock Exchange.

Brit is the latest private equity-owned company to float its shares in recent months amid buoyant stock markets eager for new listings.

The insurer, which is based in the Netherlands, priced its offering at 240 pence a share, giving it a market capitalization of £960 million. The company’s shares were trading up slightly at 240.25 pence early Friday.

Brit was taken private by Apollo Global Management and CVC Capital Partners in 2010.

"I am pleased that our offering has been well received by investors," said Mark Cloutier, the chief executive of Brit. "Having transformed Brit into a successful global specialty insurer operating solely through Lloyd’s of London, we have built a strong foundation for future profitable growth and continued success."

Since going private, the company has sold several business lines, including its general insurance business in Britain in 2012.

It now focuses on specialty insurance and reinsurance for businesses, and it has a large presence in the Lloyd’s of London underwriting marketplace.

In 2013, Brit posted a 20.1 percent increase in profit, to about £102 million.

Private equity firms have engaged in a series of sales and initial public offerings of their portfolio companies in the past year as stock markets have recovered.

Earlier this month, Poundland, a British discount retailer that sells everything for £1 or less; ISS, a Danish outsourcing company; and Pets at Home, a British pet supply retailer, all went public.

Apollo and CVC will remain Brit’s largest shareholders after the offering.

JPMorgan Chase was the sole sponsor and also served with UBS as the global co-coordinator and bookrunner on the offering.

Source The New York Times

Friday, 28 March 2014

Old Mutual sells German and Austrian wealth units for $303 million

Anglo-South African insurance group Old Mutual (Other OTC: ODMTY - news) has sold the Austrian and German businesses of its wealth management arm as it is reshaped to focus on core UK and offshore markets.

The businesses are being bought by an acquisition vehicle backed by private equity investor Cinven and reinsurer Hannover Re for 220 million euros ($303 million) in cash, Old Mutual said on Thursday.

"The transaction is part of Old Mutual Wealth's commitment to simplify its operations in Europe and focus on a select number of core growth markets," Old Mutual said.

At the end of last year Old Mutual's wealth operation was managing assets of about $130 billion, with the German and Austrian businesses accounting for $6.75 billion.

Both units were part of Skandia, the Swedish insurer bought by Old Mutual in 2006. ($1 = 0.7254 Euros) (Reporting by Chris Vellacott; Editing by David Goodman)

Source Reuters

Great Nigeria Insurance Plc Football team, winners of Round-Robin tournament organised by Whytecleon Limited.



1. I am indeed delighted to welcome you to this auspicious Forum organized for retirees under the Contributory Pension Scheme (CPS) by the National Pension Commission (PenCom). We consider retirees as a very important stakeholder group which symbolizes the success of the CPS on the payout sphere. On behalf of the management and staff of the Commission, I wish to convey our profound gratitude to you all, our esteemed retirees, for honoring our invitation to this forum.

2. Distinguished Retirees, you would recall that one of the salient objectives of the Pension Reform Act (PRA) 2004 is that every person who worked in either the Public or Private sectors of the Federation as well as the Federal Capital Territory receives his/her retirement benefits as and when due. Section 15 of the PRA 2004 empowers the Commission to regulate, supervise and ensure effective administration of pension matters in Nigeria. In line with its mandate, the Commission has sought to establish uniform set of rules, regulations and standards for the administration and payments of retirement benefits to retirees.

3. Pursuant to this obligation, the Commission prepared and released the Regulation on the Administration of Retirement and Terminal Benefits which served as the basis for RSA holders to commence retirement under the CPS in July 2007. It is noteworthy that contributors had continued to retire seamlessly such that as at the end of February, 2014, 84,097 retirees are receiving their monthly pensions by programmed withdrawal through their various Pension Fund Administrators (PFAs). Similarly, the Commission collaborated with the National Insurance Commission (NAICOM) to issue the Regulation on Annuity in 2010, thus allowing RSA holders to retire by annuity through the purchase of annuity contracts from Life Insurance Companies. Presently, there are 8,479 retirees who are receiving their monthly pensions through annuity. Therefore, there is a clear imperative for the Commission to facilitate adequate sensitization and public enlightenment in order to create awareness on these regulations which also encapsulate the retirees’ rights and privileges. This forum is to serve as a platform for the Commission to engage all existing retirees under the CPS in order to get feedback on their pension issues in retirement with a view to seeking ways of making life more comfortable for them within the ambit of the law.

4. In line with its consultative supervisory approach, the Commission engages relevant stakeholders for input into its regulations and guidelines. It is our hope that your feedback and suggestions would guide us in identifying areas of possible changes and improvements to our regulations. We also expect you to utilize the opportunity provided by this forum to seek clarifications on any grey areas directly from the Commission. In addition, the forum will afford various retirees in the zone a common platform on retirement benefit issues.

6. Distinguished Retirees, you would, without doubt, agree that the Contributory Pension Scheme has eliminated one of the major challenges associated with the old Defined Benefit, Pay-As-You-Go scheme, in the area of irregular payment of monthly pension benefits. It is indeed gratifying that as opposed to uncertainties encountered in receiving monthly pensions, today these benefits are remitted seamlessly on due dates to individual retirees’ bank accounts without any unnecessary hassles. Notwithstanding, the Commission remains committed to institute further measures aimed at improving the retirement benefit administration processes to enhance the comfort of our senior citizens who have given much to the collective progress of our dear nation. We are therefore, looking forward to fruitful deliberations at this Forum. We would be glad to share in your experiences on retirement benefit payments processes.

8. Distinguished guests, I would like to conclude my remarks by restating that the modest achievements recorded by the Commission in the last nine years would not have been possible without the support and understanding of all stakeholders, especially our esteemed retirees. I therefore urge you to sustain your support for the CPS and remain as its ambassadors in projecting the laudable successes of the pension reform. I wish you all fruitful deliberations and a successful Retiree Forum.

Thank you and God bless.


Thursday, 27 March 2014

Insurers trail behind PFAs, as 84097 retirees take programme withdrawal, 8479 annuity

Commissioner for Insurance Fola Daniel
Acting DG PenCom Mrs Chinelo Anohu-Amazu
Chuks Udo Okonta

Life Insurance companies seem not to be taking full advantage of  
the opportunities provided by the Pension Reform Act (PRA), as they are sluggishly trailing behind Pension Fund Administrators (PFAs) who are dominating the business of retirement and terminal benefits.

 According to the National Pension Commission (PenCom), as at the end of February 2014, 84,097 retirees are receiving their monthly pensions by programme withdrawal that is administered by pension fund administrators, while a paltry sum of 8,479 retirees get theirs by annuity offered by life insurers.

Insurers have hinged their inability to break into the market on de-marketing by pension operators, an allegation the operators have denied.

Industry observers, who are not pleased with the situation, have called on insurers to stop lamenting, but be proactive in marketing and design of good products.

Director-General Nigerian Insurers Association (NIA), Sunday Thomas, urged insurance operators to fight the alleged de-marketing of annuity business by pension funds administrators through development of good products that suit the needs of retirees.

He noted that insurers and pension operators ought not to fight over annuity and programme withdrawal as the law has specified the roles to be played by the operators.

He said the menace would have stemmed from the operators' lack of adequate knowledge of how the two businesses operate, adding that they were designed to complement each other.

He said: “When we heard of the issue of de-marketing between the operators, I had cause to write to PenCom and copied NAICOM. I believe it is due to lack of adequate knowledge of the subject.

"I happened to be among those who were instrumental to give effect to the law, when I was with NAICOM. And annuity was not designed to be a conflict between the institutions. But the problem may probably be due to lack of proper understanding. The two are supposed to complement each other.

"The role of programme withdrawal is totally different from life annuity. There was a time the former Director-General of PenCom, was encouraging insurance companies to come up with products that will attract retirees and he gave a figure of which out of the total number of retirees, it was very small number that went by way of life annuity.

"If I am an operator, de-marketing will not bother me too much, all I need to do, is come up with good products that would sufficiently be endeared in the minds of the retirees. I would go ahead and market the products and engage in public awareness."

He noted that the association would intensify efforts on creating awareness on annuity and its importance in the life of a worker.        

The National Pension Commission (PenCom) has also called on insurers to intensify efforts in marketing annuity business instead of complaining of de-marketing.

PenCom said the complain by some life insurers that they are denied annuity business by PFAs is uncalled-for as the Pension Reform  Acts  (PRA) 2004, has spelt out the roles to be played life insurers and PFAs in managing retirement funds.

Great Nigeria Insurance Plc unveils new board


Chuks Udo Okonta


Great Nigeria Insurance Plc has unveiled its new board members following the conclusion of the divestment process.

At the Company’s 48th Annual General Meeting held in Lagos, the new Chairman, Tokunbo Talabi, in his maiden address assured the shareholders of the ‘board commitment to bringing to bear, their various wealth of experience to ensure optimum performance by the organisation’.

While thanking the previous board for the ‘good job done’, he emphasized that the Corporate Governance policy will be strictly pursued. Talabi who is a business mogul formally introduced the other board members at the occasion. They are;  James Naiyeju, Mr. Bade Aluko, Arch Bishop Felix Alaba Job, Mrs. Foluso Onabowale, Dapo Otunla, and Mrs. Cecilia Osipitan the Managing Director/CEO. Also introduced are Rotimi Olukorede and Mrs. Roselyne Ulaeto both as Executive Directors.


Commenting further on the Company at the occasion, Mrs. Osipitan who has been at the helms of the Company since December, 2009 assured that ‘with the conclusion of the divestment process, GNI Plc is now fully focused on the matter of growing its bottomline, implementing the re-engineering initiatives and customer service improvement programme’.

It will be recalled that following the Central Bank of Nigeria’s [CBN] Directive for banks with subsidiaries to either sell off their subsidiaries or adopt a holding structure, Wema Bank Plc, the majority shareholder of the 54 year old Insurance firm decided to sell her stake in the Company.

The successful bidding process which started in 2011 led to the new ownership of Great Nigeria Insurance Plc that was now unveiled at the impressive ceremony.

Great Nigeria Insurance Plc according to report and as part of its effort to improve on its turnaround time has only recently purchased a new software that will enable GNI Plc achieve this objective and it is in the process of going live with the new software.

As a measure of the growth of the organization, the Company in its recently released financial result witnessed a massive rise in the PAT with a 119% increase of N903m in its 2012 financial results when compared to the N399m of 2011.

GNI Plc’s gross premium as at 31st 2012 stood at N2, 881,13 Billion as against the turnover of N2,403,889 billion of 2011, this shows a 16.5% comparative increase.

Similarly, the total assets experienced a marginal growth of 13.8 per cent at N8.432billion as against the 2011 figure of N7.265billion. While, N833,12 million was paid out as claims to its various customers.

In the same vein, the retail products of the Company which are sold under its eBusiness platform has also started growing; one of which is Fireproof to cover against possible loss of properties through fire, another is Great Savers Delight; which is a savings investment scheme, Motorflex is an improved version of third party motor insurance policy and GNI Personal Accident Insurance product is for injuries sustained in accidents.




A.M. Best Special Report: Africa’s insurance markets: gearing up for sustained growth

Africa’s insurance and reinsurance markets continue to attract close scrutiny and rising interest from financial market participants in both the mature markets of the United States and Europe, as well as newer entrants from emerging BRIC (Brazil, Russia, India and China) countries. In addition, robust regional cross-border activity with Africa-based insurance groups buying other regional insurance companies has created a vibrant landscape, according to a new report from A.M. Best.
"Africa’s Insurance Markets: Gearing Up for Sustained Growth"
A.M. Best’s report titled, "Africa’s Insurance Markets: Gearing Up for Sustained Growth", states that a number of the 54 African economies are growing by 5% to 10% and more, much faster than the mature markets, with drivers such as energy, construction and mining projects. This has made them attractive to insurance groups in the United States and Europe, where growth has been more limited.

Despite strong average GDP growth for the continent overall, many insurance markets in Africa are small by international standards. Deniese Imoukhuede, associate director, analytics, said: "Insurance penetration, while growing, is low at less than 1% overall, and insurers have faced challenges that include political risks, greater competition and increases in minimum capital levels. However, from June 2011 to June 2012, 28 out of 46 governments in sub-Saharan Africa implemented at least one regulatory reform, making it easier to do business."

Africa’s insurers and reinsurers are poised to benefit from strong economic activity on the continent. Dr Edem Kuenyehia, associate director, market development and communications, added: "There are significant opportunities for direct insurers and reinsurers in key markets in Africa, particularly in fast-developing sub-Saharan markets such as Kenya, Nigeria and Ghana. However, companies need to stay focused on the economic and regulatory environment, given the diversity of markets on the continent."

To access a complimentary copy of this report, please visit .

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit

Copyright © 2014 by A.M. Best Company, Inc.


Disasters led to $45B in insurance losses in 2013


Associated Press

Disasters such as floods in Europe, winter storms in the U.S. and typhoons in Asia cost insurance companies $45 billion in 2013, a leading Swiss firm said Wednesday.

The sum represents only about a third of the $140 billion in economic losses, not to mention 26,000 lives lost, from 308 catastrophes and disasters around the globe last year, according to Zurich-based Swiss Reinsurance Company Ltd., known as Swiss Re.

As a whole, Asia was the region that suffered the most, with $62 billion in economic losses and more than 20,000 victims. But only $6 billion was paid in claims, reflecting the region's relative lack of insurance.

Typhoon Haiyan left 7,500 people dead or missing and caused $12.5 billion in damage to the Philippines and Vietnam, with insured losses of just $1.5 billion.

Europe suffered the two most expensive natural disasters in insurance terms.

The first was the massive flooding in central and eastern Europe in May and June, after four days of heavy rain that caused large-scale damage across Germany, the Czech Republic, Hungary and Poland. It led to $4.1 billion in paid claims on $16.5 billion in economic losses.

The second was the hail storm that hit Germany and France in late July, causing $3.8 billion in insurance payments on $4.8 billion in economic losses. Most of those claims — the highest ever caused by hail — came from heavily populated areas of Germany.

Altogether, Europe had economic losses worth $33 billion for $15 billion in insurance payouts.

The U.S., which suffered severe thunderstorms, tornadoes, hail and winter storms, had a total of $32 billion in damage of which $19 billion was insured.

The global figures for 2013 represent a big drop from 2012, when there were $81 billion in paid claims on $196 billion in economic losses, mainly from large-scale weather events in the U.S. such as Hurricane Sandy, Swiss Re said.

Source Fresnobee

MH370 mystery triggers insurance sale among fliers to South East Asia

Subhro Niyogi

While it is mandatory for travellers to America, Canada, UK and Australia to purchase medical insurance, those flying to South East Asia or Gulf rarely bought insurance.

KOLKATA: The agonizing suspense over the disappearance of a Malaysia Airlines Boeing 777-200 ER aircraft with 239 passengers and crew has left air travellers so rattled that several have cancelled travel plans till the mystery is solved. Those who cannot avoid travel are scurrying for insurance cover just in case something happens.

"In the last few days, we have witnessed a sharp rise in purchase of travel insurance by fliers to South East Asia. The mystery surrounding the disappearance of flight MH370 that was flying from Kuala Lumpur to Beijing appears to have triggered the panic purchase," said National Insurance Co general manager S Bhattacharya.

While it is mandatory for travellers to America, Canada, UK and Australia to purchase medical insurance, those flying to South East Asia or Gulf rarely bought insurance. That trend, Bhattacharya hoped, would change from now on. "Insurance is a protection against ailments and mishaps that can be financially draining when one has to spend in foreign currency. In addition, the policy offers protection against a host of other unfortunate occurrences like inordinate flight delay, baggage loss, accident or even hijack," Bhattacharya pointed out.

The cover on hijack distress allowance is an added one at National Insurance but is part of the basic plan at Iffco-Tokio and Bajaj Allianz. While a person can insure oneself against a plane accident for $10,000-$25,000 by paying a single premium of Rs 1,105-1,712, he or she can also get $50/day distress allowance for four-six days in case of hijack.

Seven in 10 international passengers from Kolkata travel to the region, either on leisure or business or a combination of both, with Thailand the no.1 destination followed by Malaysia and Singapore.

Travel Agents' Federation of India chairman Anil Punjabi, who has been advising passengers to purchase insurance, says fliers are scared. "Everyone is jittery. Unless the mystery over flight MH370 is resolved and we get a rational explanation, the sense of unease will remain. The situation was okay in the first few days because the aircraft was presumed to have crashed. But as the mystery remains unsolved and speculations do the rounds, the situation is becoming grave," he said.

Many have simply lost the appetite for travel. Businesswoman Anita Nankani, a frequent traveler to South East Asia and Gulf, has just postponed her trip to Dubai because she does not feel confident about air travel at the moment. "I was supposed to go to Dubai but am extremely skeptical since the Malaysia Airlines flight's disappearance. How can such a large aircraft disappear in this age? I want to know what happened to the aircraft and the people in it. Did it crash? Has it been hijacked? Once the answer is out and we reconcile to the facts, I can resume traveling. Till then, I don't see flying as a leisure option," said Nankani.

Vishal Jairath, South Asia head of VFS Global, a company that processes visa applications to Malaysia and 16 other countries, said they were yet to feel the ripple.

"Travelers to the region would obviously be tense. It is an unforeseen event. It is the airlines and travel agents community that will face most of the queries," said Jairath, who returned from Kuala Lumpur barely two days before the flight disappeared on March 8.

Senior citizens Vandana and Kumar Asvani had planned a trip to China and Kuala Lumpur but cancelled it. "I cannot accept what's happened and don't have the heart to take the risk. An accident can happen once in a blue moon but if an aircraft can disappear, there's no telling when there can be a repeat," said Kumar.

Members of the travel trade industry fear the uncertainty may affect travel plans in the summer holiday season. While 70-80 passengers fly to Malaysia from Kolkata daily during the off-peak season, it shoots up to 250-300 a day during peak period. It isn't just flights to Malaysia that will get hit but those to Thailand and Singapore as well because they are all around the Gulf of Siam and Andaman Sea, the hottest beach destinations in the region.

Punjabi, who has been facing a barrage of queries from his clients, says he has no answers to offer for most of them. "I am as puzzled by the incident as they are. There is anxiety and uncertainty among passengers. And this isn't just among those travelling for the first time internationally. Even frequent fliers and businessmen are feeling the jitters. Since they can't avoid travel altogether, I am advising them to purchase insurance," said Punjabi.

Source The Times of India