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Insurance Sector’s Assets Hit N1.82tn on Recapitalisation Deadline

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Insurance Sector’s Assets Hit N1.82tn on Recapitalisation Deadline

Despite the impact of COVID-19 pandemic on the economy, the insurance industry attracted some investments that boosted its assets, investigation has shown.

Many of the underwriting firms started sourcing for foreign investors to bring in new capital since the National Insurance Commission ordered the firms to beef up their capital requirements in 2019.

Figures obtained from the Central Bank of Nigeria’s report on ‘Insurance sector (general and life) consolidated balance sheet’ revealed that the industry’s asset rose by N410bn from N1.41tn as of the end of third quarter of 2019 to N1.82tn as of the end of third quarter of 2020.

According to the CBN report, the figure which stood at N1.26tn as of the end of 2018 rose to N1.61tn as of the end of 2019.

The statistics further revealed that the assets rose to N1.52tn, N1.79tn and N1.82tn as of the end of first, second and third quarters of 2020 respectively.

NAICOM had mandated that 50 per cent of the minimum paid-up capital for insurance and 60 per cent for reinsurance must be met by 31 December 2020.

The regulatory body had stated that insurance companies that failed to satisfy the required minimum paid-up capital by December 31, 2020 would be restricted on the scope of business they could transact.

Life and general insurance companies were asked to shore up their existing minimum paid-up capital from N2bn and N3bn to N4bn and N5bn respectively by the end of December 2020, and meet the final minimum paid-up capital requirements of N8bn and N10bn respectively by the end of September 2021.

Composite companies and reinsurance firms were asked to shore up from existing minimum paid-up capital of N5bn and N10bn to N9bn and N12bn by end of December 2020 and to N18bn and N20bn respectively by the end of September 2021.

Some operators had urged NAICOM to waive the first phase of its segmented recapitalisation.

The underwriters also urged NAICOM to consider their challenges by amending some of the requirements in the recapitalisation directive.

The operators said they were more concerned about the aspect relating to attainment of certain thresholds by 31 December 2020, failing which the commission would restrict the scope of business insurance and reinsurance companies would transact.

According to them, the huge impact of COVID-19 on the financial services sector and the national economy at large, coupled with the situation that was worsened by losses from the nationwide #EndSARS protests in the later part of 2020 affected them.

However, as NAICOM’s directive remained, some displeased operators dragged the regulator to court, using some shareholders’ associations.

On December 9, 2020, the House of Representatives asked NAICOM to suspend the December 31, 2020 deadline set for operators in the insurance industry to recapitalise.

This led the commission to suspend the first phase of the recapitalisation, leaving the second phase scheduled to end by September 2021.

However, some underwriters had declared on their own that they met the requirements before the first phase of the recapitalisation was suspended.

The Managing Director/ Chief Executive Officer, SUNU Assurances Nigeria Plc, Samuel Ogbodu, said the company successfully completed the first phase of its recapitalisation plan by increasing its shareholders’ fund to N6.61bn in 2020 from N3.47bn in 2019.

NSIA Insurance also said it successfully completed the phase 1 of its recapitalisation exercise to fulfil the requirements for the mandatory minimum paid-up share capital policy for a composite insurance firm in Nigeria.

FBN General Insurance said it was one of the few general insurance businesses to meet the first phase of recapitalisation before the directive was put on hold.

Lasaco Assurance Plc also said it scaled the first hurdle of the recapitalisation before the suspension.

During the public hearing on Consolidated Insurance Bill 2020 organised by the House of Representatives Committee on Insurance and Actuarial matters in Abuja, the Nigerian Insurers Association recommended introduction of Risk Based Capital in the Consolidated Insurance Bill.

It described it as the right capital model for the insurance industry in order to align the Nigerian insurance market with international best practice and reposition the industry for accelerated growth and development.

In adopting risk based capital adequacy template, the Chairman, NIA, Mr Ganiyu Musa, said the association took cognisance of the need to consider insurance risk, market risk, credit risk, and operational risk as well as the need to apply such capital charges on assets and liabilities (all capital resources inclusive).

He hinged the association’s position on the 2013 IMF report on the Nigerian insurance industry which prescribed the risk based capital model as most suitable for the Nigerian insurance market.

According to him, the IMF report was duly acknowledged and admitted by the National Insurance Commission as the right capital framework for the market, as it sought to limit the capital required by operators to the level of risks they can carry.

When the Bill is eventually signed into law in line with this proposal, he said, it would lay to rest the contentious issue of the definition of capital which had been a major point of the association’s engagements with the NAICOM on the recapitalisation.

“We are convinced that risk based capital adequacy template is the best fit for the insurance industry in Nigeria especially given the fact that the 2013 IMF report has prescribed it and the commission agreed with it,” he stated.

He added that this would also align the definition of insurance with the various positions such as International Association of Insurance Supervisors recommendations.

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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Airtel Partners AXA Mansard, Unveils Mobile Health Insurance via USSD

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Airtel Nigeria and AXA Mansard, have entered a strategic partnership to deepen access, participation and enrolment in health insurance for more Nigerians.

The partnership by Airtel and AXA Mansard is in response to the Federal Government’s goal, through the National Health Insurance Scheme, to provide easy access to healthcare for all Nigerians by leveraging on the USSD channel, an easy-to-use and interactive platform.

By dialing the shortcode, *987*7#, Airtel customers can now conveniently enroll for affordable and robust health insurance plans from AXA Mansard, with access to over 1,000 hospitals nationwide for quality healthcare services.

Commenting on Airtel’s partnership with AXA Mansard on the Mobile Health Insurance, the Head Mobile Financial Services, Airtel Nigeria, Muyiwa Ebitanmi, said the mobile health insurance initiative demonstrates Airtel’s commitment to providing innovative and relevant solutions that will empower more Nigerians to conveniently access best-in-class health insurance value offerings.

“Airtel Nigeria is always exploring innovative ways and platforms that will make life easier, more meaningful and more enjoyable for Nigerians. With this initiative, we are not just delivering bespoke health insurance services to the doorstep of more people, we are also leading a quiet revolution that will drive and deepen health insurance inclusion by removing the many barriers that have hitherto excluded many well-meaning Nigerians from participating in the sector.”

Speaking about the Mobile Health Insurance initiative, the Head, Emerging Customers and Digital Partnerships Group at AXA Mansard, Mr. Alfred Egbai, stated that “our research has shown the value and importance of having a health insurance plan to the public especially for the emerging customers in the country, but for many reasons, the uptake of insurance products has been low”.

He continued, “In order to mitigate these challenges and satisfy the health needs of the retail consumer whilst also encouraging the uptake of health insurance in the country, we have partnered with Airtel Nigeria to provide a solution that gives users a convenient way to purchase and manage their AXA Mansard micro-insurance plans.”

Malaria Cover, Inpatient, Outpatient, Specialist medical consultations, Immunizations, Family planning, Ambulance services, Dental care and more are some of the covers provided in the AXA Mansard Health plans.

“The challenges to the implementation of health insurance schemes hitherto include a low level of awareness, affordability, ineffective distribution systems and inefficient payment models.

“The partnership between Airtel Nigeria and AXA Mansard is aimed at solving these challenges and assisting Nigerians to access a viable Health Insurance Scheme,” he said

Airtel Nigeria, as a socially responsible organization, will continue to partner with industry leaders to bring products and services that will touch the lives of its subscribers in very positive ways.

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AXA Mansard Launches MyAXA Plus – A Better, Faster, and More Convenient Mobile App

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MyAXA App- Investors King

AXA Mansard Insurance Plc, a member of the AXA Group and global leader in insurance and asset management, today announced the launch of its new “MyAXA Plus” mobile application.

This follows the launch of the company’s first mobile app in 2017 and further underscores the company’s desire to deliver delightful and relevant, cutting-edge financial solutions to its customers and the larger society.

“MyAXA Plus” has been very well received because it provides a much improved, seamless, and satisfying experience that puts users at the heart of every feature and action on the app.

The features available at launch include:

  • Make Claims: Customers can make claims on their insurance policy, enabling fast reporting of incidents and payment of claims by the company.
  • Book Hospital Visits: HMO customers of AXA Mansard can receive care at over 1,700+ hospitals, and with MyAXA Plus, they can also pre-book hospital visits, reducing their wait time while also getting faster access to specialist consultations.
  • Renew Insurance Policy: Customers, by providing their car plate number on the app, can also renew their motor insurance policy within a few minutes.
  • Invest & liquidate funds: Investors, whether with a high or low-risk appetite can find the right investment options on the app. Also, liquidation of funds and crediting of the customer account is completed within 5 minutes via the app.
  • Data-driven advice: App users can make informed decisions by checking the market rates and trends before investing funds, reading articles by experts, and interacting with a robot-advisor that uses information provided by the customers to suggest the right products and insurance cover in seconds.

In addition, MyAXA Plus allows registered and unregistered users to generate instant quotes of any product; use the BMI calculator; read blog articles; check investment trends & rates; calculate returns on investment; calculate the market value of any car; and contact sales agents for more information.

“After launching the first of its kind MyAXA mobile app which gave customers a consolidated, single point of access to their general and life insurance; health insurance; assets and savings accounts in 2017, our team set out to build a more advanced solution to further empower customers to achieve their financial goals and access quality healthcare, wherever and however they choose,” said Mr. Bayo Adesanya, the Chief Digital Innovation Officer at AXA Mansard.

“We are committed to achieving the singular goal of putting our customers first, in this instance, by building an app that incorporates their feedback on desired features and improvements, as well as including other market-leading innovations. We urge our existing and future customers to start using MyAXA Plus today.”

To download MyAXA Plus by AXA Mansard Insurance, visit App Store for iOS users and the Google Play Store for Android users respectively.

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NAICOM Partners FRSC To Enforce Compulsory Motor Insurance

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The National Insurance Commission (NAICOM) has partnered with the Federal Roads Safety Corps (FRSC) on the enforcement of compulsory motor insurance in the country.

The move will ensure that about 10 million uninsured vehicles in the country are captured into the insurance industry. The insurance industry is expected to generate additional revenue of N50 billion through this.

Mr. Sunday Thomas, the Commissioner for Insurance/CEO, NAICOM, spoke during a courtesy visit from The Corp Marshall, FRSC, Boboye oyeyemi, and his team, he said the partnership is needed to enforce vehicle insurance as part of the compulsory insurances, stating that, this move will eradicate insurance racketeers while ensuring that those who fail to comply are adequately prosecuted.

He promised that the regulatory body and FRSC will work out an effective plan for the enforcement of 3rd party motor insurance in the country.

Boboye Opeyemi, on his part, appreciated the concerns of the insurance regulator, noting that the road safety corps is more than ready to work with NAICOM to ensure vehicles on Nigerian roads carry genuine insurance certificates.

Newsmen had earlier reported that, of the estimated 13 million vehicles on Nigerian roads across the country, only three million of them have at least third-party motor insurance certificates, leaving about 10 million vehicles uninsured.

The 10 million uninsured vehicles, according to findings, were the ones owned by the government and private individuals and companies.

Investigation shows that some of these 10 million vehicles parade fake motor insurance papers, while some did not have any insurance coverage even as few who had genuine insurance papers before, have failed to renew when their previous motor insurance cover expired.

To this end, these uninsured vehicle owners newsmen findings show, have violated the Federal Roads Safety Corps(FRSC) Act which mandates all vehicles on Nigerian roads to carry at least a third-party motor insurance policy.

Third-Party Vehicle Insurance comes at a fixed price of N5,000 for privately used saloons and SUVs, while commercially used vehicles are charged N7,500 and in some cases, N5,000.

Using the N5,000 insurance valuation of which each vehicle should at least carry, the insurance industry can recoup N50 billion premium income annually if all the 10 million vehicle owners could be compelled to have genuine insurance certificates.

Low enforcement of compulsory motor insurance, according to market observers, has been responsible for the insurance apathy of road users.

To recoup the N50 billion, newsmen learned that, prior to this engagement, insurance operators, under the auspices of the Nigerian Insurers Association (NIA) have engaged Lagos State in the past on enforcement of motor insurance through their licensing offices. Similarly, there were already ongoing discussions with Kaduna, Niger, Kogi and Ogun States to ensure that motorists get genuine insurance cover at the point of renewing their vehicle particulars at licensing offices across the aforementioned states.

The chairman, NIA, Mr. Ganiyu Musa, had earlier disclosed that the industry is embittered about what it is losing to insurance racketeers and non-insurance of vehicles, disclosing that, the association, on behalf of the insurance industry, is engaging five states with plans to extend to other states as the time progresses.

According to him, “we are also working closely with the state vehicle Inspection service on enforcement of Third Party Motor Insurance in the state. We are also engaging Niger, Kaduna, Kogi and Ogun States, and remain hopeful that other states will see value in the platform and embrace it. Out of the estimated 13 million vehicles in Nigeria, only about 2,939,767 Third Party Motor policies are in force as of Apr 26, 2021.”

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