UK plans to make insurance executives more accountable

* BoE says no reversal of "burden of proof" at insurers

* Industry reassured won't be treated like banks (Adds industry comment, background)

By Huw Jones

Chief executives and other senior officials at insurance companies in Britain will be made more directly accountable to regulators for their decisions under plans announced by the Bank of England on Wednesday.

The plans follow those the Bank's Prudential Regulation Authority (PRA) has already drawn up for senior bankers, although they are less demanding in some respects.

Under the proposals, insurers will have to allocate specific responsibility for developing and embedding the culture of their firms to one or more senior managers. The watchdog also plans to introduce new conduct standards for these managers.

"Policyholders are best served by insurance companies with senior managers who can be held to account and who are individually responsible for the decisions they make," PRA chief executive and BoE Deputy Governor Andrew Bailey said.

Regulators have come under fire from lawmakers for bringing so few bankers to book after lenders had to be bailed out by taxpayers in the 2007-09 financial crisis.

Under the so-called "reversal of burden of proof" proposals for banks, top managers would have to prove to regulators they were unaware of or had challenged dubious behaviour at the time.

This has alarmed bankers, with two directors of HSBC set to leave the bank because they are unhappy with the new rules, Reuters reported last month.

The plans for insurers are slightly different, recognising the differences between the industries, the PRA said.

Regulators would have to show misconduct by an insurance official was deliberate or that behaviour fell below reasonable standards. The sanctions that could be imposed against insurance officials are also in line with those already available, such as fines, bans and public warnings.

The Association of British Insurers (ABI), an industry body, said it was reassured the plans recognised the differences between banks and insurers.

"We will be working with our members... to ensure that the regime is fit for purpose and ensures a continuing flow of high level talent into the insurance industry," it said.

The new regime for insurers such as Prudential and Aviva will apply to chief executives, chief finance officers, chief risk officers, heads of internal audit and chief actuaries.

At the Lloyd's of London insurance market, it will apply to chief underwriting officers and underwriting risk oversight functions.

A public consultation will run until Feb. 2 and the new rules will be rolled out from late 2015.

The watchdog will also publish a further consultation on how non-executive directors at insurance and banking firms will come under the new accountability rules. (Editing by Louise Heavens and Mark Potter)




Source: Reuters

LASACO Assurance pledges good times for customers

Ladipo-Ajayi

Chuks Udo Okonta

The Managing Director of LASACO Assurance, Olusola-Ladipo-Ajayi has underscored the commitment of the company to sustaining its customer centric posture to remain a dynamic and vibrant player in the nation’s financial services sector. This has manifested in several strategies being deployed to develop innovative products and services to align with the aspirations of the customers.

LASACO Assurance, according to Ladipo-Ajayi, has established a solid reputation excellence customer service delivery and prompts claims settlement. The company since inception has thrived on the platform of qualitative customer’s service delivery. The brand does not only have focus on quality service delivery but also places a high premium on delighting the customers. The brand delights the customers to win through brand loyalty. It has been able to secure greater levels of loyalty from its customers through a dynamic service delivery.

Since inception, Lasaco Assurance plc has continued to re-inventing the wheel to ensure that customers derive good benefits out of their relationship with the company. Expectedly, Lasaco Assurance has never been tired of building on such assets of integrity, reputation and good corporate identity as a means of deepening its bond with the customers. With this strive; it has therefore remained a reference point for maintaining a solid pedigree as a forward looking and vibrant organization.

The company has over years re-invented the rules of customer service. It has developed a strategic blueprint to position itself as a one stop shop for excellent customer service. Lasaco Assurance has a mission to sustain the quality of life and it has not reneged on this premix to provide customer centric service while also raising the bar of service delivery.

The brand has also achieved its corporate existence on a strategic roadmap to deepen consumer experiences. It has been able to determine its service delivery portfolio and review it on consistent basis. This clearly aligns with the brand values of excellence, professionalism, integrity, customer focus, trust, accountability, creativity and team work. Lasaco Assurance has proven to delight customers by building a strong relationship. Through it service delivery; the brand has created several emotional touch points to deepen customer experience of its brand.

Lasaco Assurance with its pedigree and reputation for sustaining quality has increased its brand voice as a brand renowned for excellent service. This has led to increased customer awareness of the brand. Its service delivery pedigree has also enhanced brand awareness and equity.

The brand has endeavored to create value for not only its customers but also stakeholders as well. It has enabled customers to know, feel and experience it in more compelling ways. The personality of the Lasaco Assurance brand is service and this has been the differentiating edge for the brand. It has over the years adopted strategies that will add value to its corporate identity. This has manifested in several innovative and creative product development.

The Lasaco Assurance brand has gained significant edge as it focuses on its integrity and good governance practices. The company boosts of some of the finest brains and through bred professionals in the industry, The CEO, Mr. Olusola Ladipo-Ajayi is a professional with technical expertise, in depth knowledge of the industry and strong management skills. He has been able to provide virile and qualitative leadership that has continued to ensure a stable brand. A strategist endowed great intellectual acumen; he remains a prized asset to the brand’s navigation in the court of the customers.

His leadership is complemented by crop of insurance technocrats who understands the dynamism of insurance and the place of customers for a sustainable operation.

The Lasaco Assurance management is poised to steer the brand in the right direction in order to remain relevant in the market place. Its testimonial is better appreciated in the light of its superlative performance in 2013 business year. Rising from a loss position of N180 million to a net profit of N412 million in 2013, no doubt attest to the brand customers’ management mechanism.

Guinea Insurance takes CSR programme to primary schools

 

From left: Polycarp Didam - Managing Director, Taiwo & Kehinde Ajeigbe of LMLG Primary School, Fadeyi, Ufot Hanson (Team Lead, Corporate Services), Mojisola Adegboye (Ag. Group Lead, Marketing), Wole Fayemi (Group Lead, Technical) & Yinka Adebiyi (Team Lead, Private Sector Marketing), during the presentation of Special Prize items to pupils on Monday at the school premises in Fadeyi, Lagos.

 

 

Chuks Udo Okonta

Guinea Insurance (GI) Plc, in line with its CSR initiatives aimed at offering new lease of life to educational institutions at the bottom of the pyramid, has donated educational materials ranging from: Note books, Biros, School bags, Note pads, T-shirts and key holders to three primary schools in Lagos.

A statement by the firm's Team Lead, Corporate Services, Ufot Hanson said the second phase of its 2014 CSR initiative tagged "Engaging Tomorrow’s Leaders Today," had been activated in three primary schools namely: Fadeyi Primary School, Lagos Mainland Local Government (LMLG) Primary School and Onayade Community Primary School, all sited in a large school compound at No. 9 Shiro Street, Fadeyi, Lagos State.

The Managing Director, GI Plc, Polycarp Didam, at the event, reaffirmed the company’s resolve to continually encourage academic and moral excellence from the grassroots because, it was considered a universal truth that youths are tomorrow’s leaders. "Tomorrow’s leaders should be assured, flexible, selfless and ready to collaborate, this, we believe, will come to pass only when we make certain that the youths of today are properly groomed and continually nurtured to imbibe the elementary guidelines of leadership, which we reckon, is deeply rooted in excellence. Hence, our charge to oblige this clarion call"

In the same vein, the Divisional Director, Corporate and Legal Services, Isioma Omoshie encouraged the pupils to be conscientious with their studies to enable them reach out for greater heights in life. In her words: "Imagine a world without schools and colleges! Impossible, right? No matter how much we hate waking up early for school or studying all night for those tests and exams, we all know that education is very important because, it is much easier for us to become successful and realize our dreams as compared to those of us that are not educated."



From left: Pupils of Fadeyi Primary School, Lagos Mainland Local Government (LMLG) Primary School and Onayade Community Primary School on queue to receive their gift items from Chioma Ihejirika (Team Member, Retail Marketing) and others

An array of educational items donated by the company, were presented thus: 45 pupils won the special prize item i.e. branded school bags for excelling in: Academics, Sports, Morals, Neatness, Punctuality and Creativity. 41 Academic and Non-academic staff were appreciated for their astute presence of mind, high probity and dogged embrace of positive, organised teaching character and outlook, despite the numerous setbacks elicited by lack of adequate infrastructural facilities in the schools. They also, received packaged prized gifts, each containing: note pads, t-shirts and key holders. On the whole, notebooks and biros were distributed across-board to all pupils of the three schools.

In appreciation of this laudable gesture by GI Plc, The Head teachers of the schools i.e. Fadeyi Primary School, Lagos Mainland Local Government (LMLG) Primary School and Onayade Community Primary School: Messrs. Muritala Seidat Abosede, Shobande Benedicta Ekundayo and Ezeoke Philomena Ikwuoma respectively, expressed their heart felt gratitude for the company’s compassionate support which according to them, would greatly encourage both the Pupils, Academic and Non-academic staff alike to strive for the very best at all times. In conclusion, the Head teachers further expressed hope that the ensuing partnership with GI Plc would be continuous as it would make learning and teaching more efficient.

From left: Group photo session of Guinea Insurance Plc team with Academic and Non-academic staff of: Fadeyi Primary School, Lagos Mainland Local Government (LMLG) Primary School and Onayade Community Primary School.

Clearline HMO canvasses professionalism for health insurance operators

Chuks Udo Okonta

Clearline International has called on health insurance operators to esteem professionalism.

The Executive Director, Operations/Medical Services Clearline HMO, Dr. Isaac Akinsefunni Akintunji, who disclosed this, said professionalism is very critical to engender growth in the health care sector. He stated that without professionalism, health care insurance will not attain desired level of growth.

Akintunji who bemoaned sharp practices in the health care sector said the health Insurance scheme in Nigeria is just evolving and professionalism is a potent catalyst to accelerating its growth.

He asserted that Health maintenance Organizations and health care providers need to collaborate and ensure that all stakeholders adhere to professional standards.

Akintuji who also added that quality assurance is an integral part of professionalism charged health insurance operators in the country to ensure a quality service delivery to instill trust and confidence in the health insurance scheme.

The medical expert disclosed that Clearline HMO has focused on providing the best service and take the issue of quality assurance seriously. The company according to him engages health providers in consistent communization in order to enhance professionalism and quality service.

Clearline HMO also responds promptly and pro-actively to the varying needs of the health care providers while also supporting health care providers with the technical expertise they need to work efficiently.

Fitch Assigns Old Mutual South Africa's Subordinated Debt 'AA(zaf)' Final Rating

Fitch Ratings has assigned Old Mutual Life Assurance Company South Africa's (OMLACSA) (Issuer Default Rating (IDR) of AAA(zaf)/Stable) issue of subordinated debt securities of ZAR1bn a final rating of 'AA(zaf)'.

The notes are rated two notches below OMLACSA's IDR of 'AAA(zaf)' to reflect their subordination and loss absorption features, in line with Fitch's notching criteria. The assignment of the final rating follows the completion of the bond issue and receipt of documents conforming to the information previously received.

The final rating is the same as the expected rating assigned on 21 November 2014. KEY RATING DRIVERS The securities have a 10-year maturity, callable after a period of five years and are issued in two tranches, one with a fixed and one with a floating coupon.

The ZAR700m floating notes pay coupons at a rate of 3m Jibar + 220bps on a quarterly basis and the ZAR300m of fixed notes pay a coupon of 9.255% semi-annually. Both issues have a step-up of 110bps after the first call date on 27 November 2019.

The scheduled maturity date is 27 November 2024. The notes include interest deferral features, which would be triggered on a breach (or potential breach on payment of interest) of the statutory solvency requirements. According to Fitch's methodology, this subordinated bond is classified as 100% capital due to regulatory override within Fitch's risk-based capital assessment and is classified as 100% debt for the agency's financial leverage calculations.

OMLACSA's financial leverage remains low for its rating category and interest coverage is expected to remain strong. RATING SENSITIVITIES The ratings on the subordinated debt securities are notched down from the issuer's rating and are therefore sensitive to changes in OMLACSA's National Long-term rating. Contact: Primary Analyst Anna Bender Associate Director +44 20 3530 1671 Fitch Ratings Limited 30 North Colonnade London E14 5GN Secondary Analyst Harish Gohil Managing Director +44 20 3530 1257 Committee Chairperson Chris Waterman Managing Director +44 20 3530 1168 Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: elaine.bailey@fitchratings.com.




Source: Reuters

U.K. regulators approve Africa-focused reinsurer One Re

One Re Ltd., a nonlife Africa-focused reinsurer has been approved by U.K. regulators to do business in the United Kingdom, the company said Wednesday.

Based in London, One Re is solely focused on Africa, and most of the executive management are African and have worked in Africa's insurance industry for over two decades, One Re CEO and co-founder Andrew Lewis said in a statement. The company is backed by an initial investment of $50 million from the co-founders.

"There is undoubtedly a return in global risk appetite. Sub-Saharan African markets have benefitted from renewed investor interest, which has provided an increase in demand for insurance and reinsurance in Africa," Mr. Lewis, said in the statement.

Training and building local insurance knowledge and skills in African markets will be a priority for One Re, Mr. Lewis said.




Source: Business Insurance

China’s Deposit Insurance Seen as Risk for Small Banks

China’s plan to introduce a deposit insurance program may exacerbate a liquidity shortage at smaller banks and increase their chance of failure as savings shift to the biggest state-controlled lenders.

While the move could limit systemic risks, it may fuel competition for deposits and drive up lenders’ borrowing costs as savers divert money to stronger banks or those that offer higher interest rates, according to Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia Ltd.

China may offer customers deposit protection as soon as the start of 2015, the official Xinhua News Agency reported, citing unidentified sources. The insurance would help to prepare China’s financial system for bank failures as the economy slows and authorities allow banks to pay higher interest on deposits.

"Competition for large deposits will clearly increase, with pricing and the perceived financial strength of the banks being the key factors for consumers," Antos wrote in an e-mail. "We expect to see a shift of large deposits to the megabanks which, being government-owned, are viewed as stronger institutions."

The government may cap coverage at 500,000 yuan ($81,000) and set different premium levels based on a bank’s regulatory rating under the plan, Economic Information Daily reported today, citing a person close to regulators.

Multiple government departments, including the People’s Bank of China and the China Banking Regulatory Commission, are preparing the program, Xinhua said.



Implicit Guarantee

The nation’s savers had amassed 112 trillion yuan of deposits by the end of October, PBOC data show. Industrial & Commercial Bank of China Ltd. (3988) and its three largest state-owned peers held 43 percent of that total.

Chinese banking shares rallied in Hong Kong and Shanghai today. ICBC surged 5.5 percent to close at 4.04 yuan, the highest since September 2013, while its Hong Kong-listed shares rose 1.5 percent to HK$5.26. Bank of China Ltd. gained 8.1 percent in Shanghai and 3.6 percent in Hong Kong.

"We haven’t seen anything like this for A-share banks in quite some years," said Antos. "A few years ago you could not give the shares away for free. Now they are being snapped up enthusiastically. The economy is not as robust and the banks really have not changed their business practices much in the intervening period."



Exit Strategy

The central bank last week moved further toward freeing up interest rates by raising the cap banks can pay on deposits to 1.2 times the benchmark rate from 1.1 times. That may make it more costly to attract and retain deposits, putting a strain on finances of smaller lenders.

Deposit insurance is "a clearly defined exit strategy for troubled banks," Judy Zhang, a Hong Kong-based analyst at BNP Paribas SA, wrote in a note today. "It protects the public interest and shows the government is accelerating financial reform to gradually break its implicit guarantee of the financial system. However, it may lead to a deposit shift from small banks to large and medium-sized banks in the short term."

Smaller banks face the risk of withdrawals by corporate depositors to counterparts with strong capital bases and extensive distribution networks, Zhang said. Beside liquidity risk, smaller lenders may have to bear higher funding costs to keep customers, putting pressure on their earnings, she said.

To contact Bloomberg News staff for this story: Jun Luo in Shanghai at jluo6@bloomberg.net

To contact the editors responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net Russell Ward

Source: Bloomberg

Top insurance broker JLT to launch India ops next month

By Mayur Shetty

Europe's largest insurance broker Jardine Lloyd Thompson (JLT) is set to launch its operations in India next month following an acquisition of stake in Sunidhi group's Independent Insurance Brokers. This is the first investment by a global firm following the global financial crisis.

The joint venture has received the necessary government clearances. The company has appointed Sanjay Radhakrishnan, senior vice-president at Bharti Axa General Insurance, as head of its Indian operations. Speaking to TOI, Radhakrishnan said that as a specialist broker JLT had unique products covering cyber insurance, political risks and covers in the renewable energy space.

One of the new products the company is looking at is a unique group health policy offered as part of its suite of employee benefit plans. "Typically, group health policies offer the same benefit for all employees. We have introduced a flexi benefit programme where the employee can choose the level of benefits. We help insurance companies in pricing this product," said Radhakrishnan




Source: The times of India

Breaking news: AXA to acquire 77% stake in Mansard Insurance for N43.14bn

Chuks Udo Okonta

 AXA, a worldwide leader in insurance and asset management announced today, it has entered into an agreement to acquire 100 per cent of Assur Africa Holdings (“AAH”) which holds a 77 per cent stake in the composite insurance company Mansard Insurance plc (“Mansard”). Under the terms of the agreement, the total cash consideration payable at closing would amount to Euro 198 million (N43.14 billion).

AXA said in a statement, that it would include the acquired operations within its Mediterranean and Latin American Region.

This transaction would allow AXA to enter the highly attractive Nigerian market through a very reputable local company, led by a talented management team. Moreover, Mansard would be able to capitalize on AXA’s extended distribution knowledge, unique product skills and actuarial know-how, to accelerate further its development and leverage its competitive advantages. The closing of the transaction is expected before the end of 2014.

“This acquisition is a unique opportunity for AXA to enter the largest African economy with leading positions in all business lines and to get exposure to the fast-growing Nigerian retail insurance market. AXA will benefit locally from the knowledge of an experienced and successful management team and from a profitable platform. Thus, this transaction represents a further step in our acceleration strategy, which is at the heart of our Ambition AXA plan, and is in line with our belief that insurance is instrumental to foster economic development, by providing communities with protection and risk management expertise”, said Denis Duverne, Deputy Chief Executive Officer of AXA.

Mansard is the number four insurance provider in Nigeria with operations in both Property & Casualty (#4 with five per cent market share) and Life & Savings (#5 with four per cent market share). The company is well established in commercial lines, which represents nearly two thirds of its revenues, and has been developing successfully its retail business, achieving a growth of ca. 40 per cent per annum on average over the past three years. Mansard has built a strong competitive advantage through its multi-channel approach, with a strong focus on proprietary networks.

Managing Director Mansard Group, Tosin Runsewe said: “We are delighted to join the AXA Group, a global leader in Life & Savings, Property & Casualty and Asset Management. It is indeed a befitting home for the Mansard Group given our leading position in the same business lines within Nigeria and our unflinching drive to consistently create exceptional value for all our stakeholders. Leveraging on our complementary strengths as well as common values and long-term vision, we can now deliver even higher levels of product innovation, underwriting capacity and operational excellence to our corporate and retail clients. We view with much excitement the opportunity to bring our strong entrepreneurial orientation to bear in delivering on AXA’s sub-Saharan African expansionary ambitions.”

ABOUT MANSARD

Mansard is a composite insurer founded in 1989. It is the #4 player in the Nigerian market, with strong positions in both Property & Casualty (#4 with five per cent market share) and Life (#5 with four per cent market share). Commercial lines business represented 68 per cent of GWP in 2013, while the retail business, which experienced a GWP growth of ca. 40 per cent per annum on average from 2010 to 2013, was at 32 per cent.

Mansard’s distribution strategy relies on brokers and salaried sales-force for commercial lines and on bancassurance partnerships and agents for retail lines. The agency channel is the fastest growing distribution network.

Mansard has 240 employees and is headquartered in Lagos, Nigeria. It is listed on the Nigerian Stock Exchange.

In 2013, Mansard recorded GWP of NGN 13.6 billion (or Euro 64.3 million). From 2010 to 2013, Mansard achieved a GWP growth of 22% per annum on average. 2013 Net income was NGN 2.1 billion (or Euro 9.9 million), a 31 per cent increase over 2012.

ABOUT AXA IN AFRICA

AXA´s presence in Africa consists of operations in Cameroon (#4 in P&C with 10 per cent market share and revenues of Euro 19 million), Gabon (#5 in P&C with 14 per cent market share and revenues of Euro 23 million), Ivory Coast (#5 in P&C with seven per cent market share and revenues of Euro 16 million), Morocco (#3 in P&C with 16 per cent market share and revenues of Euro 250 million; #5 in Life with 10 per cent market share and revenues of Euro 71 million), Senegal (#1 in P&C with 17 per cent market share and revenues of Euro 18 million), as well as greenfield operations in Algeria (ca. one per cent market share In P&C with revenues of Euro 11 million and nine per cent market share in Life with revenues of Euro 7 million).

 

ABOUT THE AXA GROUP

The AXA Group is a worldwide leader in insurance and asset management, with 157,000 employees serving 102 million clients in 56 countries. In 2013, IFRS revenues amounted to Euro 91.2 billion and IFRS underlying earnings to Euro 4.7 billion. AXA had Euro 1,113 billion in assets under management as of December 31, 2013.

The AXA ordinary share is listed on compartment A of Euronext Paris under the ticker symbol CS (ISN FR 0000120628 – Bloomberg: CS FP – Reuters: AXAF.PA). AXA’s American Depository Share is also quoted on the OTC QX platform under the ticker symbol AXAHY.

Shoderu charges brokers on survival measures in North

Shoderu

Chuks Udo Okonta
Insurance Brokers in Northern Nigeria, have been enjoined to be creative in product marketing to survive the current challenges confronting that part of the country.

The President of Nigerian Council of Registered Insurance Brokers (NCRIB) Ayodapo Shoderu, gave the charge yesterday, at the investiture of new executives of the Kano Chapter of the council.

Shoderu lamented the challenges poised to insurance and the economy generally in the North following the grinding security challenges in the region.

He specifically told the brokers who are professional intermediaries in the insurance value chain, to study their environment as well as people’s needs and come up with tailor made insurance policies to suit their needs.

In the same token, the NCRIB Boss also implored government in the region to stem up strategies for combating the security challenges so that the economy of the area could be afoot again.

According to him, the importance of the North to the nation’s economic growth cannot be undermined going by its antecedents. He explained that the Northern part of Nigeria constitutes the industrial hub of the nation, considering the existence of large industries sited there.

"Permit me to state that in spite of all odds, if you are doggedly determined, the sky can only be your starting point. This is definitely an auspicious moment to admonish all my professional colleagues to brace up to the challenges confronting our practice, and strive at all times to be ingenious.

"My take is that if other professions and trades are thriving in Kano State in spite of the present challenges, Insurance Brokers can also thrive, if you brace up and evolve products that will naturally meet customer’s needs and aspirations".

In his acceptance speech, the newly elected Chairman of Kano Chapter, Olalekan Olaniran craved the indulgence of all stakeholders in the industry for support and cooperation at all times stressing the need for the broking arm in the northern market to wake up to fully participate in the activities of the nation’s economy.

He said, "Insurance Industry plays a pivotal role in engineering of a nation’s economy hence the industry players cannot afford to be on the fence in the scheme of events within the nation’s economy. For us to be reckoned with by the government and other players in the economy, we must have to make ourselves relevant at all times.

"The window of opportunities which the law on local initiative contents afforded our industry has not been fully tapped as Commissioner for Insurance Fola Daniel, has challenged our industry for not taking full advantage of the law. Of course, we cannot be there to take full advantage of the law if we are not organized and work together to provide and share information that will be useful to the members of the industry.

"Another reason why our industry must have to wake up fast is that insurance penetration in Nigeria is considered to be too low compared to the population and thereby contributing very small to the GDP of the nation. We cannot expect to be respected in the communities of the nations where comparative analysis of our GDP is nothing to write home about.

"Here in the North, insurance acceptance is still very poor in spite the advantages which the large population and massive land provide the region. The government of the northern state is advised at this juncture to re-appraise their policies to embrace insurance in order for us in the north to catch up with the economy of the southern Nigeria.

"There is no how we can achieve economic parity in the north with the south where economic wastes are always passed back to the government. Incidents that lead to economic waste all over the world are fully commercially insured by any prudent government as losses emanating from the insured incidents can be recouped from the commercial insurers and thereby allowing the government to focus on their traditional responsibilities of providing infrastructures and security for the citizens."

Also, a Northern based Past President of the Council, Dr. Mohammed Koguna encouraged the national secretariat not to be too far from the local chapters particularly, the northern chapter in view of the fact that insurance awareness there is still low compared to the south.

‘Over 1000 police families to receive compensation soon’

By Omobola Tolu-Kusimo

Over 1,000 families of Nigerian police officers and men who died or sustained injury during active service between 2012 and last year will soon receive adequate compensation, The Nation has learnt.

The victims are those who were not covered as a result of the non-payment of insurance premium on the Group Life Assurance Scheme of Federal Government workers to insurers following the enforcement of ‘No premium, no cover’ policy by the National Insurance Commission (NAICOM) in the insurance industry.

Assistant Commissioner of Police and Head Insurance Department, Nigeria Police Force, Kayode Turner disclosed this in an interview with The Nation.

He said the Inspector-General of Police Mohammed Abubakar had been working with the Budget Office to pay the affected families.

He said following the enforcement of the ‘No premium, no cover’ policy’by NAICOM, the money to be paid to the families cannot be termed as insurance claims any longer but compensation because no premium was paid to the insurers.

Turner assured that going forward, premium on police Group Life Assurance Scheme will be paid up front.

He noted that the police presently have insurance cover running for the year, as insurance premium has been fully paid.

He believes premium should not be tied to quarterly allocation of the budget releases.

He however stated that NAICOM ought to give a special concession to the police and other security forces in paying their premium owing to the nature of their job and the time when the Federal Government budget allocation is released, knowing full well that premiums are paid from the budget which comes every January after most of these polices may have been due.

workers in Ministries, Departments and Agencies (MDAs), such as the Nigeria Police Force (NPF), Central Bank of Nigeria (CBN), Economic and Financial Crimes Commission (EFCC), Federal Ministry of Education, and Federal Ministry of Justice, Federal Ministry of Power, among others, who die in active service are not eligible to get compensation.

The Pension Reform Act states in Section 9(3) that employers shall maintain life insurance policy in favour of their employees for a minimum of three times the annual total emolument of the employee.




Source: The Nation

Some insurers budget for fines – Investigations

Daniel

Chuks Udo Okonta

Determined not to comply with statutory regulations, some insurance operators now make provisions for fines in their budgets, thereby making it easy for them to flout laws and pay penalties.

An expert who is knowledgeable about this new illicit device told Inspen, that the operators at the beginning of the year, resolved on the laws they are to comply with and those they are to flout and make budgetary provisions to cater for the penalties.

He said one for the laws the operators budget for is the section of the Insurance Act 2003, that stipulates the time for submission of annual accounts, adding that though the law states that accounts should be submitted not later than June 30, and failure to comply attracts a daily N5,000 fine, the errant operators flout the law, relying on their planned budget to pay the fines, even for a year.

He noted that some operators are hellbent on flouting stipulated rules, stressing that they are never prepared for the change being preached by the regulator- National Insurance Commission (NAICOM) and other concerned parties.

The expert noted that instead of the errant operators to comply with rules, they go about castigating NAICOM of highhandedness.

Commissioner for Insurance Fola Daniel, who is worried about this ugly development and several others, had accused the operators of blotted overheads, stressing that money that would have been used for developments and paid to shareholders as dividends are expended on fines.

He also frown at the submission of annual accounts by companies before Christmas, adding that it shows that either the company is lacking integrity issue or they are withholding some information to the public.

He noted that going forward insurance companies must comply with all requisite regulatory requirements without plea subsidies from the commission, stressing that the Commission has resolved to issue appropriate regulations that would enthrone these best practices. 

“It is high time we all stepped up our game and learn to play by the rules. It is only by so doing that we can achieve real growth and development in the industry and make meaningful contribution to the economy”, he said.

He assured that the commission will continue to create the right environment for ethical behaviour and conversely, where it identifies actions detrimental to the interest of the industry, it shall take corrective steps as part of its mandate.

Operators kick as NAICOM re-introduced N50, 000 advertorial processing fees

Commissioner for Insurance, Fola Daniel

• Why we re-introduce fees – NAICOM

Chuks Udo Okonta

Many insurance operators were said to be shocked yesterday when they got a circular from the National Insurance Commission (NAICOM) mandating them to commence payment of N50, 000 advertorial processing fees, a development some of them have kicked against.

Some operators that spoke with Inspen, said NAICOM has no justification for demanding a fee for processing advertorials as it is its responsibility to approve the advertorials. They noted that the process of approval should not be taken for income generation.

They lamented that the payment would be a double burden on them, as they are also meant to pay approval fee to the Advertising Practitioners Council of Nigeria (APCON).

An operator called on NAICOM to reduce the fee, stressing that it is too high for the operators to bear.

Responding to the misgivings expressed by the operators, NAICOM said the fee was re-introduced to curb the abuse been perpetuated by some operators, who flood the commission with advertorial materials for process and approval, but would fail to publish them as tolls for creation of awareness for which they are designed.

Head, Corporate Affairs, NAICOM 'Rasaaq 'Salami, told Inspen that the commission in a bid to ascertain the amount the operators deplore on creation of awareness, observed that many of the advertorials approved were not made public.

He said the operators were meant to pay the fee in the past, but the commission suspended the collection to encourage operators to advert having observed that only fee were adverting and promoting awareness about the products and services offered by the industry.

He said the re-introduction will spur the operators to make public advertorials approved, as they would now, have to consider the amount incurred to secure the approvals. He noted that because the processing and approval were done at no cost for the operators, many of them took the efforts of the commission for granted by not making the advertorials public.

PRA 2014: Insurers may lose group life business

PenCom logo

Chuks Udo Okonta

The word ‘The solution to a problem is a problem’ can be best used to describe the provision on Sec 4(6) of the Pension Reform Act (PRA) 2014, which has put the group life assurance at the discretion of employers, a development that is presently causing apprehension  among insurers.

Although Sec 4(5) of PRA 2014, mandated every employers to have group life insurance policy in favour of each employee, Sec 4(6) PRA 2014 which reads: “Where the employer failed, refused or omitted to make payment as at when due, the employer shall make arrangement to effect the payment of claims arising from the death of any staff in its employment during such period” seem to have created a window for employers to do away with insurers and carter for the settlement of their employees after their death.  

Experts, who have observed the gap, said the provision on Sec 4(6) PRA 2014 is a great threat to group life business as some employers may hind under it to do away with insurers and make arrangement for their staff after their demise.

They said the provision Sec 4(5) of PRA 2014 would have been left to stand with no exception created Sec 4(6) PRA 2014.

They expressed worry over the continuous loss of insurance businesses, adding that if adequate measure is not taken, group life which has been a major chunk of insurance business and yields good premium to the industry may be taken away, as crafty employers may take advantage of the gap.    

Insuring opportunities yet to be fully utilized - Soladoye

Soladoye

Chuks Udo Okonta

Concerned about the state of insurance development, the Managing Director Riskguard-Africa Nigeria Limited Yemi Soladoye, has identified numerous insuring opportunities that have been left fallow and not tapped by insurance industry operators.

According to him, the present state of insurance can be jump-started if the operators would raise their sleeves and pursue the identified opportunities amongst several in the society.

This is what he said about the under-utilised opportunities: The Workmen’s Compensation Act 1987 – Sec 40 – we did not touch occupational diseases.

·            The National Health Insurance Scheme Act 1999 – Sec. 45 – No complimentary coverage

·            The Abuja Commodity Exchange – 1999 – Agric and Micro Insurance

·            The Nigeria Agricultural, Cooperative and Rural Development Bank (NACRDB) Recapitalization – 2000 – Agric and Micro Insurance

·             The Bank of Industries (BOI) Recapitalization of 2000 – Enterprise Properties

·            The privatization of NICON, NIG RE – government Accounts

·            The CBN Universal Banking Guidelines – 2001 – Bancassurance

·            The Small and Medium Enterprises Equity Investment Scheme Guidelines–2002–SME Insurance

·            The NCRIB Act 2003 –Market Penetration through Partner Broker

·            The Insurance Act – 2003 –Sections 64, 65, 67, 68 – 85% of MTP and clause C Marine Imports are fake.

-           The SMEDAN Initiative – 2004 – Enterprise Property, Credit life and Key man Insurance.

·                     The Pension Reform Act 2004, 2014 - Group Life, Annuity and Gratuity.

·                     The Banking Consolidation Guidelines 2004 – Collaboration and Competition

·                     The Insurance Consolidation Guidelines-2005 – Local Market Development

·                     The Mortgage – backed Securities Initiative-2005 – Mortgage Insurance

·                     The Micro Finance Bank Guidelines – 2007 and the Intervention Funds– Micro Insurance

·                     The Capital Market Crash – 2008 - Insurance as certainty in un-certainty

 Soladoye noted that all these insuring opportunities were under-utilized due to the absence of diverse distribution channels.

 

Photo: The Chartered Insurance Institute of Nigeria presentation of "Insurance Textbook for Senior Secondary Schools" to the Ondo State Goverment

President, Chartered Insurance Institute of Nigeria (middle) Bola Temowo; presenting the "Insurance Textbook for Senior Secondary Schools" to the Ondo State Goverment represented by the Honourable Commisioner for Education, Ondo State, Arch. Jide Adejuyigbe (right). And observing, is the Chairman of the Ondo State Parents Teachers Association (PTA). The event took place in Akure recently.

Why we dropped self-regulated bill - NCRIB

President NCRIB, Ayodapo Shoderu

Chuks Udo Okonta 

The Nigerian Council of Registered Insurance Brokers (NCRIB)  has said it was an error on its part to pursue the self- regulatory bill which was considered not to be in the overall interest of the industry, promising a continuous support for the industry regulator, the National Insurance Commission (NAICOM).

The bill which was at second reading at the National Assembly, has been opposed by other constituent arms of the industry, hence, making the NCRIB to write to the National Assembly to stop the amendment of proposed section.

At a joint insurance industry consultative committee meeting held in Lagos, the  leadership of the NCRIB,  promised to work with other arms of the industry to move the sector forward.

Part of the resolutions at the meeting which was attended by the current and past leaderships of the different arms including the Chartered Insurance Institute of Nigeria (CIIN); Nigerian Insurers Association (NIA); Institute of Loss Adjusters of Nigeria (ILAN), and the NCRIB, agreed to pursue industry agenda both within and outside government as a group.

This will be supported by a joint Insurance Industry National Conference that would be supported by NAICOM to commence next year.

A.M. Best Assigns Ratings to Custodian and Allied Insurance Limited

LONDON--(BUSINESS WIRE)--A.M. Best has assigned a financial strength rating (FSR) of B (Fair) and an issuer credit rating (ICR) of “bb” to Custodian and Allied Insurance Limited (CAI) (Nigeria). The outlook assigned to the ratings is stable. CAI is the wholly-owned non-life subsidiary of Custodian and Allied Plc (CAP) (Nigeria). CAP’s (previously known asCustodian and Allied Insurance plc - the former operating parent) role was redefined in 2014 as the non-operating holding company of the Custodian group of companies.

Concurrently, A.M. Best has withdrawn the FSR of B (Fair) and the ICR of “bb” of Custodian and Allied Insurance plc. The ratings have been withdrawn due to the change in the organisational structure of the Custodian group.

The merger of CAP with Crusader (Nigeria) Plc (Crusader) in 2013, a financial services group writing both insurance and pension business in Nigeria, resulted in a reorganisation of the Custodian group. In addition to CAP becoming the new non-operating parent of the newly formed organisation, CAP’s general insurance business was transferred to CAI, which held the non-life operation of Crusader General Insurance Ltd, the former wholly-owned subsidiary of Crusader. CAI is the largest insurance entity within the group, representing approximately 90% of consolidated gross written premiums. The group also includes subsidiaries relating to life, pensions and trustee business.

The assigned ratings on CAI reflect its solid risk-adjusted capitalisation, adequate operating performance and strengthened competitive profile, following the merger with Crusader. A negative rating factor is the company’s underdeveloped risk management framework.

CAI’s risk-adjusted capitalisation is maintained at a solid level, although some erosion is anticipated in 2014 due to rapid growth in premium volumes as the company takes advantage of its enhanced profile in the domestic market. Despite CAI’s expansion plans, the company’s risk-adjusted capitalisation is expected to remain supportive of its current rating level, underpinned by robust earnings derived from its improving technical earnings and solid investment returns. The company’s return on equity is expected to remain strong, in excess of 20% in the near term.

CAI’s general insurance strategy remains unchanged following the merger, with growth targeted within the retail segment of the market. The company has historically maintained a good competitive profile, primarily operating in the commercial sector. The acquisition of Crusader allows CAI to benefit from the former’s established profile in the retail segment of the market. Gross premium volumes are expected to increase annually by approximately 20% in the near term. Given the company’s underdeveloped risk management framework, A.M. Best considers there to be material risk associated with its rapid growth plans.

Positive rating actions could occur if CAI demonstrates strong technical earnings and maintains risk-adjusted capitalisation at a supportive level, whilst demonstrating developments to its risk management framework.

Any deterioration in CAI’s operating performance or significant erosion in its risk-adjusted capitalisation could place negative pressure on the ratings. A decline in Nigeria’s economic fundamentals could also negatively affect the company’s ratings.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Analyzing Insurance Holding Company Liquidity
• Catastrophe Analysis in A.M. Best Ratings
• Equity Credit for Hybrid Securities
• Evaluating Country Risk
• Insurance Holding Company and Debt Ratings
• Rating Members of Insurance Groups
• Risk Management and the Rating Process for Insurance Companies
• Understanding BCAR for Property/Casualty Insurers
• Understanding Universal BCAR

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

This rating announcement has been issued by A.M. Best Europe – Rating Services Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.