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Insurance Sector Records 35.7% Premium Growth in 10 Years

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Insurance - Investors King
  • Insurance Sector Records 35.7% Premium Growth in 10 Years

The insurance sector has in the past ten years achieved an average growth rate of 35.07 per cent in both life and non-life classes of business.

A breakdown of this showed that life business recorded a higher growth rate of 27.64 per cent, while non-life grew by 7.43 per cent in the last 10 years.

Available statistics from the latest edition of the Nigeria Insurers Association’s annual digest showed that life business witnessed highest increase in premium of 85.8 per cent in 2008m, but recorded poor performance in 2016 when it recorded -0.50 per cent increase in premium generation.

However, in 2011, life business premium grew by 37.21 per cent followed by 2014, when premium from life business grew by 35.02 per cent. In 2012, premium from life business grew by 28.25 per cent while in 2017, it grew by 27.59 per cent.

For the non-life segment, the insurance sector witnessed highest increase in premium in 2008, when the sector’s premium grew by 22.1 per cent. This was followed by 2009, when the industry’s premium in non-life business grew by 19.6 per cent and was closely followed by 2011 and 2012 when it increased by 11.80 per cent and 11.63 per cent respectively.

Nevertheless, the sector recorded the worst performance in premium generation in 2015 and 2014 when growth stood at -3.50 per cent and -1.31 per cent respectively.

In motor insurance business segment, another class of non-life insurance business, the sector recorded a net written premium of N33.859 billion.

in 2017.

Among the underwriting firms that participated in this class of business in 2017, NEM Insurance earned the highest premium of N4.370 billion. NEM was closely followed by Axa Mansard Insurance which recorded N3.080 billion and Leadway Assurance – N3.071 billion.

The least premium earner in the motor insurance class of business for the period was the Nigerian Agricultural Insurance Corporation(NAIC) which earned N49.351 million premium.

In fire insurance class of business, the industry recorded the highest premium in 2017, when it garnered N35.375 billion followed by 2016 when it earned N30.773 billion premium and 2015 when it earned N27.36 billion premium.

The least premium in fire insurance business was earned by the sector in 2008, when the industry realised only N15.618 billion premium.

Speaking on the sector’s performance the Chairman, NIA, Mr. Tope Smart, said the sector’s performance during these period was negatively affected by the economic recession experienced in 2016.

He, however, said despite the downturn in economic activities, operators continued to improve their drive and commitment for premium increase.

The immediate past Chairman, NIA and Managing Director Consolidated Hallmark Insurance Mr Eddie Efekoha, said the total quantum of businesses written by insurance companies grew from N315.96 billion in 2016, to an estimated N363 billion in 2017.

He said in 2017, insurance firms had to grapple with challenges of epileptic power supply and dilapidated infrastructure such as roads and other public facilities, all which according to him, exposed the industry to increased cost of operations.

“This coupled with a suffocating tax regime impacted the bottom line of insurance companies,” Efekoha said.

According to him, despite the challenges, the insurance industry, during the period under review continued to perform its role of financial intermediation and business restoration in line with its mandate.

“The volume of business written by the market grew from N315.96 billion in 2016, to an estimated N363 billion in 2017, representing an expected increase of 15 percent over 2016 figure,” he said.

Efekoha, said to ensure a more robust performance in the current business year, the industry operators in collaboration with the National Insurance commission (NAICOM) embarked on various initiatives to deepen insurance penetration.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Finance

Tanzania: African Development Fund Approves $116 Million Loan to Upgrade Southern Road Corridor

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The Board of Directors of the African Development Fund on Wednesday approved a loan of around $116 million to the Tanzanian government to upgrade a 160-km Mnivata-Newala-Masasi road corridor in the southern part of the country.

The Bank’s loan represents 98.71% of the project cost; the government of Tanzania will provide the remaining 1.29% in funding.

The project will upgrade the roadway, including the 84-meter Mwiti bridge, to bituminous standard. The works also have social components, including the provision of potable water, education and medical infrastructure, the establishment of cashew nut processing units, and extension of entrepreneurial training to women and youth.

The upgrade is expected to open up rural areas in the region and enhance the Mtwara Development Corridor, which links Mtwara Port and Mbamba Bay port on Lake Nyasa. Exporters, importers, small-scale cross-border traders, farmers, transporters are all expected to benefit.

“The periodic isolation of such a significant population worsens vulnerability and undermines social inclusion. Improved road connectivity would therefore build the resilience of the people and widen livelihood opportunities within the Mtwara Development Corridor and the surrounding districts,” Bank Director General for East Africa Nnenna Nwabufo said.

Overall, the five-year project will improve mobility and accessibility for about 1.1 million people in Mtwara, Tandahimba, Newala and Masasi districts and facilitate integration with neighbouring Mozambique, Malawi and Zambia.

Currently, the districts of Tandahimba and Newala, with an estimated combined population of 509,000 people, are mostly cut off, while connection with the Mtwara port area for essential supplies is severely constrained during rainy seasons due to the state of the road.

The project will advance Tanzania’s current five-year Development Plan (2021-2026) and aligns with the Bank Group’s Country Strategy Paper (2021-2025) which emphasizes sustainable infrastructure for a competitive economy and an improved private sector business environment for job creation, as well as two High-5 strategic priorities: Integrate Africa and Improve the quality of life for the people of Africa.

At 30 June 2021, the Bank Group’s active portfolio in Tanzania comprised 22 operations (19 public and 3 private) with a total commitment of about $2.4 billion.

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Banking Sector

FirstBank Expands Its International Money Transfer Network, Reinforces its Commitment to Customer Service

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In furtherance of the need to expand diaspora remittance inflow into the country, First Bank of Nigeria Limited has increased its network of International Money Transfer Operators (IMTOs), targeted at easing the accessibility of its customers to receive money from close to 100 countries across the world in a safe and secured manner. With over 750 branches across the country, customers can receive money from the nearest FirstBank branch closest to them.

Over the years, FirstBank has been in partnership with Western UnionMoneyGram, Ria, Transfast, and WorldRemit. The bank is also in partnership with other IMTOs which include Wari, Smallworld, Sendwave, Flutherwave, Funtech, Thunes and Venture Garden Group to promote remittance inflow into the country, thereby putting Nigerians and residents at an advantage in receiving money from their families, friends and loved ones across the world.

Beneficiaries can receive remittance in US dollars in any of our over 750 branches spread across the country. Customers without an existing domiciliary account can have dollar account automatically created for their remittances. You can also receive inflow directly into your account through Western Union.

In addition, FirstBank has launched its wholly owned remittance platform named First Global Transfer product to promote the international transfer of funds across its subsidiaries in sub-Saharan Africa. These subsidiaries include FBNBank DRC, FBNBank Ghana, FBNBank Gambia, FBNBank Guinea, FBNBank Sierra-Leone, FBNBank Senegal.

Reiterating the Bank’s resolve in promoting diaspora remittances, regardless of where one is across the globe, the Deputy Managing Director, Mr Gbenga Shobo said “at FirstBank, expanding our network of International Money Transfer Operators is in recognition of the significant roles diaspora remittances play in driving economic growth such as helping recipients meet basic needs, fund cash and non-cash investments, finance education, foster new businesses and debt servicing.

We are excited about these partnerships, as it is essential to ensure our customers are at an advantage to receive money from their loved ones and business associates, anywhere they are, across the world.”

FirstBank pioneered international funds transfer and remittances over 25 years ago and has been at the forefront of promoting cross border payments in the country, having started the journey with Western Union Money Transfer. The Bank’s wealth of experience and operation in over 750 locations nationwide gives it the edge in the market.

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Finance

Private Sector Seeks FG’s Directive on VAT Payment

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The Organised Private Sector of Nigeria (OPSN) on Sunday in Lagos called on the Federal Government to urgently make a pronouncement on the ongoing controversy over VAT payment so that businesses will know what to do.

OPSN chairman, Mr Taiwo Adeniyi, made the call at a news conference and said delays in addressing the issue could cause negative effects on businesses, most especially in the collection and remittances of VAT.

“We are aware that by Sept. 21 we get penalised if we do not pay or remit the VAT for the month of August.

“We are also aware that laws are not made in retrospect. It then means that even if those laws have been enacted, particularly the Lagos State law which came into effect in September, it will not affect the payment by businesses in the state.

“Due to our remittances, we have issues with the fact that the law for Rivers was made in August and the majority of the businesses in Lagos usually will have a relationship with the Rivers State Inland Revenue too.

“The confusion in the public space is the reason we are calling on the government to come to our aid as we want to pay.

“It is for the government at the center to make a pronouncement as to what becomes of us,’’ he said.

Adeniyi, who is also the President of, Nigeria’s Employers Consultative Association (NECA), said that the ongoing challenge had the potential to make businesses pay double VAT in view of demands by the FIRS and state governments.

He said that businesses, as the collecting agents, were practically unclear on the authority to remit to and without a clear path, this would further aggravate the pain on businesses.

“It is a popular saying that where two elephants fight, it is the grass that suffers.

“It is no longer news that Nigerian businesses have been battling with myriads of challenges, making the survival of enterprises and ease of doing business in the country among the worst in this part of the world,’’ he said.

There has been controversy over the collection of VAT after a Federal High Court ruled that it was not the duty of the Federal Government to collect the tax.

VAT is normally collected by the Federal Government since the military era and the money is shared by the three tiers of government.

Following the court ruling, however, Lagos and Rivers states passed laws that allowed them to collect VAT.

FIRS, which used to collect the VAT on behalf of the Federal Government, has challenged the court ruling at the appellate court.

OPSN comprises the Manufacturers Association of Nigeria, the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture, NECA, Nigeria Association of Small Scale Industries and the Nigeria Association of Small and Medium Enterprises.

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