The global insurance market in the first half of 2021 was inundated with claims from natural disasters and catastrophes as well as claims from civil unrest, a report by the global insurance broker, Aon has revealed.
According to the report, claims from the risks are estimated to have reached $42 billion for the first half of 2021. Aon in the report stated that the claims are 2 percent higher than the 10-year average.
In Nigeria, while both the Nigeria Insurers Association (NIA), which is the umbrella body of insurance underwriters and the regulator, the National Insurance Commission (NAICOM) are still collating the actual claims figure paid by insurers within the period, many insurers are still battling with a backlog of claims resulting from the October 2020 EndSARS protest.
Insurers told explained that the EndSARS protest claims are already clashing with their claims responsibilities in the first half of the year.
According to NIA, there are a total of 1,661 protest-induced claims as a result of the #EndSars protests, of which 143 substantiated claims worth an N105.0million have been settled.
A similar experience is shared by South African insurers as reports from that clime said losses from week-long riots were estimated at over $690 million.
According to Reuters, claims from damage and theft from businesses affected by civil unrest in South Africa are likely to be between ZAR7bn ($484m) and ZAR10bn ($692m).
The news agency said the riots and looting which started on July 9 and ended July 17, left more than 117 people dead, hurt thousands of businesses and damaged major infrastructure, including telecommunications towers, in some of the worst civil unrest in decades.
It said the unrest triggered by the jailing of ex-president Jacob Zuma failing to appear at a corruption inquiry, widened into an outpouring of anger over poverty and inequality.
South African Special Risks Insurance Association (Sasria), a state-owned insurer set up after private firms stopped underwriting risks relating to political violence due to unrest during apartheid, has received around ZAR100m in claims so far, its managing director Cedric Masondo told Reuters, adding this was expected to rise significantly.
Aon, said that while $42 billion of first-half catastrophe insured losses is only 2 percent higher than the 10-year average ($41 billion), it is 39 percent higher than the 21st Century average ($30 billion) and 101 percent higher than the average of all years since 1980 ($21 billion).
In total, Aon estimated that natural disasters cost the global economy around $93 billion in the first half of 2021.
It stated, “The economic loss tally is some 32 percent lower than the previous decade ($136 billion), 16 percent lower since 2000 ($110 billion), but 9 percent higher than the average of all years since 1980 ($85 billion). All of these numbers remain preliminary, “it stated.
Aon’s data comes from a minimum of 163 natural disaster events that occurred in H1 2021, which was below the 21st Century average (191) and median (197).
In terms of loss of life, it said natural disasters claimed 3,000 lives during the first half, which is well below the long-term average (since 1980) of 38,900 and the median of 7,600.
Across the events, Aon counted 22 that drove billion-dollar economic losses, the majority of which were weather-related.
The global broker said there were at least 10 separate billion-dollar industry catastrophe loss events on an insured loss basis, it also said the costliest of them all was the US winter storm and freezing weather delivered by the polar vortex, which Aon pegs at the generally accepted $15 billion levels.
It added, “After that, the severe weather event in Europe in June drove a $3.4 billion industry loss, the Fukushima offshore earthquake a $2.5 billion loss and another US severe weather event $2.5 billion as well.”
AIICO to Realise N2.9 Billion in Profit in Nine Months Ended September 2022
AIICO Insurance Plc has projected a gross written premium of N63.333 billion from January to September 2022.
Investors King observed from the company’s earnings forecast signed by the Managing Director (MD), Babatunde Fajemirokun, that the leading insurance company expected to generate a net premium income of N51.938 billion, while the commission received is estimated at N1.747 billion, bringing the total insurance income to N53.685 billion.
AIICO forecasts net claims incurred to be N34.096 billion, while the underwriting expense (commission and maintenance) is estimated to be N7.190 billion. Change in life fund on the other hand would peak at N12.092 billion, according to this projection.
For underwriting costs, the company expected to spend a total of N53.378 billion in the period.
Profit before tax was estimated at N3.177 billion while the profit after tax for the 9 months prediction is N2.995 billion.
AIICO further estimates Profit from discontinued operations at N3.389 billion while profit after discontinued operations would be N6.385 billion.
The insurance firm explains that the Non-Life business represents 28% of the stated GWP while the Ordinary Life, Group Life and Annuity businesses represent 53%, 11% and 8% respectively.
Further, investment income will be driven mainly by bond investments and investments in other short-term financial assets.
Likewise, the reinsurance expenses is projected at an average of 12% of the projected gross written premium.
AIICO’s further estimations include:
- Cash and cash equivalents – Opening N25,490 billion
- Cash and cash equivalents – Closing N25,495 billion
Finance Minister Encourages Literacy Education on Insurance
The Minister of Finance Budget and National Planning, Zainab Ahmed has said that deliberate attention must be given to the low insurance literacy and education in the country.
Ahmed stated this while commissioning the new National Insurance Commission (NAICOM) portal during the weekend.
“The country’s low insurance literacy and education must be addressed, and that methods for insurance education, awareness, and enlightenment must be implemented,” she said.
“I believe with the commissioning of the NAICOM Portal today, the long overdue digital transformation of the insurance industry has begun with the attendant effect of increased penetration, reduction in the numbers of fake insurances, efficient service delivery and improving public trust in Insurance,” the minister added.
Ahmed mentioned that this also demonstrates the market’s abundance of growth opportunities, citing the need to develop new innovative products based on data and customer preferences, as well as the introduction of new distribution channels beyond what is currently available to reach new segments of the market.
While Ahmed praised the insurance regulator for this achievement, she pointed out that underwriters’ bad response to claim settlements has significantly contributed to the current public impression of the insurance industry, as well as a lack of trust and confidence in it.
“Indeed, prompt claims payment is the best advertisement for the industry, therefore all genuine claims that have been duly verified and due process followed, should be paid promptly.
“The Commission must put in place mechanisms to ensure Insurance companies meet their obligations to policyholders by paying claims promptly as that is the major reason they exist in the first place. Claims payment determines the valuable structure of the industry in the economy”, she stated.
She further urged stakeholders in the industry to consciously and intentionally expand insurance’s reach from major cities and a few states to other parts of the country, particularly rural areas, noting that low penetration in the retail end of the market must also be addressed through a vigorous push for inclusive insurance such as ‘microinsurance’ and ‘takaful’.
Investors King gathered that the NAICOM project was enacted to assist the regulator in transforming its operations, driving regulatory and supervisory functions, increasing operational efficiency, and improving business results using technology and data.
Stanbic IBTC Insurance Launches ‘The Good Life’ Campaign
Stanbic IBTC Insurance, a subsidiary of Stanbic IBTC Holdings, has launched its life insurance campaign. Themed ‘The Good Life’, the campaign is geared towards creating awareness about the benefits of having insurance cover.
To kick off the campaign, a launch event was held where executives of Stanbic IBTC as well as several veterans within the creative industry spoke passionately about the need for Life insurance and the edge Stanbic IBTC Insurance delivers with bespoke and inclusive life assurance packages.
The event held at IBTC Place on Walter Carrington Crescent, Victoria Island, Lagos, also featured an unveiling of the official music video which featured actors Kate Henshaw and Segun Arinze and musician, Ric Hassani – singing their hearts away to the tune of “Insurance Cover Me.”
In his opening remarks, Dr Demola Sogunle, Chief Executive, Stanbic IBTC Holdings said Many Nigerians were just beginning to understand the importance of insurance but as an organisation, Stanbic had been very deliberate about educating both young and old about the advantage that the right insurance cover provides to life and property.
“Today, in taking that effort further, we launched what we have tagged: The Good Life Campaign to advocate the value that comes from having Life Insurance and the availability of multiple Life Insurance solutions from our Life Insurance Company, Stanbic IBTC Insurance.”
Speaking on the rationale behind the insurance campaign, Akinjide Orimolade, Chief Executive, Stanbic IBTC Insurance, said having a life insurance package is a necessity as it guarantees peace of mind and aids preparedness for unprecedented occurrences. He urged Nigerians to get life insurance covers and shun the belief that insurance can only be bought by only rich or old people.
“The Good Life campaign is aimed at creating awareness of several fully customised, innovative, life insurance solutions that enable Nigerians easy access to the good life. As professionals with vast knowledge of the insurance market, we can offer the most suitable policies for our retail and corporate clients, based on extensive research and conscientious needs assessment. Having a life insurance cover is a smart thing to do, especially in these uncertain times, especially as it covers beneficiaries from financial hassles when life happens.”
Stanbic IBTC Insurance has comprehensive insurance covers like Credit Life, Group Life, Education Endowment, Annuity, Sunset Plan and Term Assurance, amongst others.
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