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Insurance Sector Records 35.7% Premium Growth in 10 Years

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  • 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 market.

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Finance

FG Implores Parastatals to Promote the Country’s Digital Economy Initiative

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digital economy

FG Tells MDAs to Promote the Country’s Digital Economy

The Ministry of Communications and Digital Economy under the management of Dr. Isa Pantami, has implored all the federal government parastatals to promote and safeguard the country’s digital economy initiative.

Dr. Isa Pantami, while presenting the keynote address in a virtual forum organised by the Association of Telecoms Companies of Nigeria (ATCON),  said based on the negative effects of COVID-19 pandemic, the demand for critical data infrastructure and broadband is now high.

The minister urged government parastatals to put in effort to uphold and promote government’s digital economy initiative designed to reduce the effect of the pandemic on the nation. He also disclosed that the interests of all Nigerians would also be protected by the government.

Federal government will continue to develop its digital economy policy for a digital Nigeria. Both the Nigerian Communications Commission (NCC) and the National Information Technology Development Agency (NITDA) that are under the supervision of my ministry, now have special departments that promotes digital economy initiative and I urge them and all other parastatals under my supervision, to ensure that they promote the digital economy initiative of the federal government in order to maintain investor’s confidence and to protect the interest of Nigerians, especially telecoms consumers.

Government on its part will ensure that the interests of telecoms companies and the interest of Nigerians are protected. Government is currently addressing the challenges in the cost of investments such as the issue of vandalisation of telecoms infrastructure, and President Muhammadu Buhari has officially directed all security institutes, through the Office of the National Security Adviser (ONSA), to protect telecoms investments in the country,” Pantami said.

The Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, when making his presentation said “The COVID-19 pandemic rapidly and sharply ravaged the globe, Nigeria is no exception. Governments therefore, faced unprecedented challenges from COVID-19 pandemic. The impact affects most sectors of the global economy, ranging from health, to education, to finance, to trade and investment.

While explaining the Commission’s efforts at resolving consumer-related issues, Danbatta noted that less than 500,000 people activated Do-Not-Disturb (DND) code as at 2015 when the code was introduced by the Commission but presently, over 22,722,366 people line on the code.

He also made it known that the commission has resolved 98 per cent of service-related complaints received from telecoms consumers from January 2019 to April 2020.

according to Danbatta “the Commission has monthly engagements with operators as well as quarterly industry working group on Quality of Service and Short Codes, and is currently monitoring 2G Key Performance Indicators, while the KPIs for 4G are being prepared.

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Mambilla Power Project: FG Spends N1.2bn on Survey, Sensitisation 

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power project

FG Releases N1.2bn for 3,050MW Mambilla Hydroelectric Power Project

The Federal Government has released a total sum of N1.2 billion to the Taraba State Government for the 3,050 megawatts Mambilla Hydroelectric Power Project to finally take-off.

Investigations have revealed that the funds were released for the sensitisation of host communities around the site where the plant is to be constructed and survey works.

The N2 trillion power project is to be located in Sardauna Local Government Area of Taraba State after four decades of on and off planning.

Checks revealed that Sale Mamman, the Minister of Power, visited Taraba State last week, where he met with Darius Ishaku, the State Governor, and discussed the final take-off of the 3,050MW project, among other things.

Mamman on Wednesday had tweeted some of the highlights of his Wednesday visit, saying the Federal Government and Taraba State Government discussed how to speed up the project.

He said, “I paid a visit to the Taraba State Government House where I met with the governor and brother.

“We held discussions centered on how to speed up the final take-off of the Mambilla Hydroelectric Power Project and other power issues affecting the state.

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FBN Holdings Boost First Bank CAR With N25 Billion Capital Injection

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FBN Holdings

First Bank Boosts CAR With N25 Billion Capital Injection

FBN Holdings Plc announced it has boosted the Capital Adequacy Ratio (CAR) of its commercial banking subsidiary, First Bank of Nigeria Limited by N25 billion.

According to the statement released by the bank on the Nigerian Stock Exchange website, the capital injection represents part of the net proceeds of the company’s divestment from FBN Insurance Limited.

It noted that the capital injection upped the bank’s Capital Adequacy Ratio to 16.53 percent –before capitalising year to date profit– as at June 2020.

Oyewale Ariyibi, the Chief Financial Officer of the Company, was quoted as saying “the divestment is in line with the Group’s medium to long term strategic objectives. The divestment has unlocked significant value embedded in the former subsidiary which is being leveraged to strengthen the core banking business for which the Group is renowned“.

Ariyibi further stated that the Company’s objective is to increase capital across the Group in order to drive business growth, enhance efficiency and improve overall shareholders’ value.

Uk Eke, the Group Managing Director, who commented on the company’s performance for the first half of 2020 said “The H1 2020 financial results are impressive and reconfirm our consistent focus on enhanced shareholder value. Despite the difficult operating environment, the results demonstrate our capacity to deliver exceptional services to our customers in these uncertain times. Looking ahead, we remain cautious, but confident that our business is fundamentally strong to surmount any future challenge towards delivering superior financial performance“.

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