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Australian insurers are looking to reinforce their claims provisions and execute capital-raising actions to bolster their solvency positions following the recent business interruption (BI) test case, according to AM Best.

The case considered the application of certain infectious disease exclusions in BI policies. The unanimous ruling by the New South Wales Court of Appeal against the arguments made by the insurers brings into sharp focus the potential downside risk for the industry, said Best. The ratings agency said it expects the question of pandemic BI coverage to remain a significant source of uncertainty for Australian commercial insurers.

According to Best: “The re-evaluation and refinement of loss provisions for potential Covid-19-related business interruption exposures are expected to lead to an adverse impact on commercial insurers’ operating earnings. The extent to which this affects capital positions remains to be seen, although Best views companies with strong financial flexibility and a track record of accessing capital markets as being best placed to contend with adverse capital implications. Some smaller insurers exhibit limited financial flexibility due to their ownership structures and therefore may have less ability to raise significant additional capital if required.”

Myles Gould, director, analytics, AM Best, said: “Another key factor relevant when determining the financial impact of potential business interruption exposures for insurers is with regard to their ability to make recoveries from reinsurance programmes. Loss triggers may be a source of dispute with reinsurers, such as in the event of non-alignment of policy exclusions in primary wordings and reinsurance contracts.”

Alex Rafferty, associate director, analytics, AM Best, added: “This test case outcome remains only one piece of a much larger puzzle, with a number of other business interruption contract triggers yet to be evaluated ahead of understanding the full liability for insurers. Additionally, this test case decision could be appealed.”

Separately, S&P Global Ratings said that potential payouts for BI claims will be manageable: “We expect the additional claims cost as a result of the test case ruling will vary by insurer and depend on specific policy cover. Payouts may also be subject to further legal avenues. Our expectation is that while there will be a hit to current-year earnings, the impact on ratings is negated by conservative reserving, reinsurance protection and maintenance of robust capital buffers.”

A new insurance group, based in London, has been launched with £800m in capital. The new insurer, Inigo, will open for business in the 2021 year of account, subject to approvals from the Corporation of Lloyd’s, and will commencing underwriting on 1 January 2021.

Inigo is being founded by Richard Watson, former chief underwriting officer of Hiscox, who stepped down from the group last year after 33 years, along with Russell Merrett, former managing director of Hiscox London market, and Stuart Bridges, former chief financial officer of both Hiscox and ICAP. Sir Howard Davies, chairman of NatWest Group and a former chairman of the Financial Services Authority, has been appointed as chairman of Inigo.

The capital was raised from a consortium of global investors, including funds controlled by Caisse de dépôt et placement du Québec, Enstar, J.C. Flowers & Co., Oak Hill Advisors, Qatar Investment Authority, Stone Point and Inigo’s management team.

Inigo has signed an agreement to acquire certain insurance underwriting assets of StarStone Underwriting, including its Lloyd’s Syndicate 1301 and its managing agency – from Enstar Group – subject to regulatory approvals. According to Inigo, these are intended to form the foundation for its operations as a specialty insurer, writing a streamlined portfolio of insurance and reinsurance risks. It stressed that no legacy underwriting will be transferred to Inigo.

The new insurance group said it believes that current conditions are ideal to launch a new insurance business, at a time when demand across a number of classes of insurance and reinsurance is high.

Mr Watson said: “This significant capital raising, together with our acquisition, gives us the platform we need to turn Inigo from a concept into reality. We believe that 2021 will mark the beginning of an exciting growth phase for Lloyd’s and the London insurance market; and Inigo will contribute to growing the specialty and reinsurance marketplace, as it returns to profitability. Sir Howard Davies joining our board validates our vision for Inigo and our determination to provide credible additional capacity and services to customers and brokers.”

He added: “We are fully supportive of the direction that John Neal, Lloyd’s CEO, is taking the market, making it a more attractive and efficient place in which to trade. For a company like ours, entirely focused on underwriting, London also has the depth of young talent we need to develop the analytical and data-led approach that is at the core of what we hope to do.”

The Global System for Mobile Communications (GSMA) 2020 report revealed that there has been 5G trial runs in Nigeria, Gabon, Kenya and Uganda but the possibility of mass deployment of the 5G network is still not guaranteed, as there are significant levels of unused 4G capacity.

Also, the 4G adoption rate is still relatively low, creating opportunities for the operators to increase their stakes in 4G. and MTN launched their first major 5G networks in Sub-Saharan Africa in 2020.

The telecoms operators offered 5G mobile and fixed wireless access (FWA) services in several locations across South Africa – this appears to be a welcome development, as the South African government had already assigned temporary spectrum in the 3.5 GHz range in the wake of the Covid-19 pandemic.

Obviously, the proximate opportunity to be harnessed for the 5G in South Africa is to use FWA to bridge the gap in fixed broadband connectivity for homes and businesses.

As a boost to mop up the unused 4G capacity, the partnership between Safaricom and Google to finance the acquisition of 4G smartphones, provides the desired momentum as low-income consumers pay for 4G devices in convenient and flexible daily installments.

According to the report, it is expected that over the next five years, the number of smartphone connections in Sub-Saharan Africa will almost double to reach 678 million by the end of 2025 — an adoption rate of 65%.

It is expected that by 2025, there will be a little below 30 million mobile 5G connections in Sub-Saharan Africa, equivalent to almost 3% of total mobile connections.

The mobile market in the region will reach several important milestones over the next five years: half a billion mobile subscribers in 2021, 1 billion mobile connections in 2024, and 50% subscriber penetration by 2025.

The achievement of these critical milestones would be predicated on the operators’ commitment in providing reliable infrastructural networks across the region.

Between 2019 and 2025, the operators in the region would have expended/invested about the sum of $52billion in infrastructure rollouts.

The GSMA represents the interests of mobile operators worldwide, uniting more than 750 operators with almost 400 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organizations in adjacent industry sectors

Qatar Air has commenced its inaugural flight to Abuja, Nigeria with the first Nigerian female Boeing 787 pilot, Adeola Ogunmola Sowemimo.

This was disclosed on Friday by the Director-General, Nigerians in Diaspora Commission, Abike Dabiri, via her official Twitter handle

She tweeted, “Today, Qatar Air operated its inaugural flight to Abuja, Nigeria. And our own Adeola Ogunmola Sowemimo was on the right seat as she assisted Captain Khan Sameer Ali. Adeola is the first Nigerian female Boeing 787 Pilot and the first Nigerian female Pilot to fly for Qatar Airways.”

Sowemimo, who graduated in 2011 from the US-based Sunrise Aviation Academy and started her aviation career there, became the first Nigerian female pilot to work for Qatar Airways in the Middle East — a region which is challenging for women hoping to become pilots.

She is also the first female Nigerian to fly the Boeing 787 Dreamliner for Qatar Airways and the first Nigerian female pilot to fly the Boeing 767 Aircraft across the Atlantic Ocean, which puts her in the same league with Kenya’s Captain Irene Koki and Ethiopia’s Captain Amsale Gulau.

Stanbic IBTC Holdings PLC, a member of Standard Bank Group has announced the establishment of its wholly-owned life insurance subsidiary, Stanbic IBTC Insurance Limited after obtaining all required regulatory approvals as well as a license from the .National Insurance Commission

Stanbic IBTC in a notification at the Nigerian Stock Exchange on Friday said the establishment of the new subsidiary essentially complements the bouquet of product offerings as it continues its goal of being the leading end-to-end financial solutions provider in Nigeria.

“In this regard, SIIL will aim to facilitate long term insurance for already financially included individuals and will seek to become the preferred Insurer in the Life Insurance Business,” the group said.

Stanbic IBTC Holdings PLC is a full-service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management.

The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade deals between Africa, China and select emerging markets. Standard Bank Group is the largest African financial institution by assets. It is rooted in Africa with strategic representation in 21 countries on the African continent.

Standard Bank has been in operation for over 158 years and is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure

FBS reinsurer, Stabic IBTC Ins.,Heir insurer, two others get Naicom’s operating license

Four insurance and on reinsurance – Heir Insurance Limited (General); Stanbic IBTC Insurance Limited; Heirs Life Assurance Limited; Enterprise Life Assurance Company Nigeria Limited and FBS Reinsurance Limited granted operational licences by the National Insurance Commission (NAICOM).

The handing over the licenses to the companies were carried in the Commission’s head office in Abuja today

Heir Insurance Limited (General), has picked, Olaniyi Stephen Onifade, as its Managing Director, Stanbic IBTC Insurance Limited, picked, Akinjide Orimolade, as Managing Director; Heirs Life Assurance Limited, picked, Abah Okoriko and Enterprise Life Assurance Company Nigeria Limited, picked, Fumilayo Abimbola Omo.

FBS Reinsurance Limited is led by the former Commissioner of Insurance, Fola Daniel.

FBS is bringing together, professionals with proven experience from the brokerage and underwriting units of the industry including Bala ZakariyaU, the former managing director of Niger Insurance who currently plays in a support unit of the Nigerian aviation industry, Ahmed Olaniyi Salawu of the Standard Insurance Consultants, and Wole Oshin Bankole of the Custodian Investment Plc that has just taken a plunge into the property sector by taking a large chunk of the United Property Development Company, a subsidiary of the UACN Plc..

Others are Ebele Ofunneamaka Okeke, from Nnewi North, Anambra who rose to the position of the Head of Nigerian Civil Service before her retirement, and also, Yusuf Hamisu Abubakar, a lawyer, and an accomplished administrator and businessman with vast experience at the senior executive level in power and communication sectors.

The reinsurance firm is required to pay the new N20 billion capitalisation stipulated by the commission under the reform exercise for it to start a business in the industry.

The Algerian insurance market recorded, in H1 2020, a turnover decline of 13.5 percent. The latter went from 78 billion DZD (654.59 million USD) during the first six months of 2019 to 67.4 billion DZD (520.61 million USD) twelve months later.

Such decline is mainly due to the economic crisis caused by the Covid-19 pandemic, according to data published by the Algerian Union of Insurance and Reinsurance Companies (UAR),

With the exception of the fire activity, engineering and motor insurance declined by 40 percent and 11 percent tespectively during the period under review. Personal insurance fell by 13 percent mainly due to a 55 percent drop in travel insurance. In Algeria, travel insurance is classified as a personal insurance activity.

The turnover of the Q1 2020, including all activities, amounted to 40.6 billion DZD (326.41 million USD) against 42.7 billion DZD (354.23 million USD) as at 31 March 2019. Thus degrading by 4.9 percent over one year.

As at 31 March 2020, the direct market accounted for 97.7 percent of total premiums, that is, 39.6 billion DZD (318.37 million USD), a decrease of 5.3 percent over twelve months. International reinsurance acceptances have increased by 11.3 percent to reach 951.9 million DZD (7.65 million USD) against 855.4 million DZD (7.096 million USD) in 2019.

The P&C activity accounted for 87.8% of total premiums, that is 35.6 billion DZD (286.21 million DZD), thus declining by 5.3 percent This activity is driven by motor insurance which, with 56.2 percent of the total portfolio, recorded 20 billion DZD (160.79 million USD) in premiums. A decline of 6.9 percent compared to the 21.5 billion DZD (178.36 million USD) recorded at the end of Q1 2019.

It is followed by the Fire and Miscellaneous Risks (IRD) activity which recorded 13.3 billion DZD (106.93 million USD) : up by 0.2 percent with 37.3% of market share. The transport, agriculture and credit insurance activities come next. As for personal insurances, they recorded a 5.1 percent drop in collections that were set at 3.98 billion DZD (32 million USD).

Nigeria generated the sum of N416.01 billion from Company Income Tax (CIT) in the third quarter of 2020. This was revealed in the Company Income Tax by Sectors report, recently released by the National Bureau of Statistics (NBS).

According to the report, the total CIT generated increased by 3.48% in Q3 2020, compared to N402.03 billion recorded in the previous quarter (Q2 2020). It reduced by 20.13% compared to N520.89 billion recorded in the corresponding quarter (Q3) of 2019.

Company income tax generated year-to-date sums up to N1.11 trillion as against N1.26 trillion in the comparable period of 2019.

ProfessionalServices including Telecoms generated the highest amount of CIT with N55.52 billion generated, closely followed by Other Manufacturing with N42.03 billion.

Banks& Financial Institutions generated a sum of N24.05 billion.

Mining generated the least, closely followed by Textile and Garment Industry and Local Government Councils with N120.93 million, N167.51 million, and N321.72 million generated respectively.

Out of the total amount generated in Q3 2020, N244.70 billion was generated as CIT locally, while N70.34 billion was generated as foreign CIT payment. The balance of N100.97 billion was generated as income taxes from other payments.

In terms of sectors with the highest increase in company income tax remittances, the Automobiles and Assemblies sector grew its CIT by 994%, from N81.6 million in Q2 2020 to N892.7 million. It was closely followed by the Gas sector, which grew its CIT by 626% to stand at N4.76 billion from N655.5 million.

On the flip side, transport and haulage services recorded the highest decline in company income tax, as it reduced by 76% to stand at N7.35 billion from N31.1 billion. This is closely followed by Banks and financial institutions, which declined by 51% to stand at N24.1 billion.

Nigeria Accident Investigation Bureau, AIB, yesterday released three final accident and serious incident reports and two Safety Bulletins.

The Bureau also issued 16 Safety Recommendations that can help in preventing similar accidents or serious incidents from reoccurring in the future.

The Bureau released reports on the serious incident involving a Gulfstream G-IV aircraft owned and operated by Skybird Air Ltd with registration marks 5N-BOD which occurred at Nnamdi Azikiwe International Airport Abuja on 12th September, 2018.

It also released the final report on the Serious Incident involving a Boeing 747-200 aircraft owned and operated by Kabo Air Ltd with nationality and registration marks 5N-JRM which occurred at Sultan Abubakar Airport, Sokoto (DNSO), Sokoto State on 4th October, 2013.

AIB also released the report on the Serious Incident involving a B737-500 aircraft owned and operated by Aero Contractors Company of Nigeria Ltd with nationality and registration marks 5N-BLG, which occurred on Runway 18R, Murtala Muhammed International Airport, Ikeja, Lagos on 9th April, 2016.

On the Gulf stream accident , the report said the causal factor was the “delayed response by the crew to recognize that the ground spoilers and thrust reversers were locked out led to the runway overrun”.

It further said the contributory factor was “the delayed deployment of ground spoilers which led to the flight crew’s problems in stopping the airplane within the remaining available runway length.

AIB also recommended that SkyBird Air Limited should ensure that all their cabin crew are adequately and properly type rated on specific aircraft to be flown by a cabin crew member in accordance with the Operations Manual.

It sdded that “SkyBird Air Limited should ensure that all flight release documents are duly signed by the commander of the flight before departure and appropriate copies kept on board the flight”.

“Inappropriate visual approach profile at night with no vertical guidance” was the causal factor of the Kabo Air aircraft crash according to the released bureau report. It also said the contributory factors are the “Unserviceable Visual Approach Slope Indicator (VASI) on Runway 26 and the Decision to land on the non-precision runway 26 at night”

For the Aero Contractors aircraft crash, the Bureau said the causal factor is the “Excessive rudder application by the crew after touchdown”. It also said the contributory factors are; “Reduced visibility due to heavy rain on touchdown and the decision to continue approach in an unfavourable weather condition with crosswind component of 090˚ /15kt”.

Three Safety Recommendations were made to avoid future occurrence. They are : “ Aero Contractors Company of Nigeria Limited should lay more emphasis during flight crew simulator trainings, on the effects of excessive rudder application at high speeds during landing roll, particularly on wet/contaminated runways. Secondly, “ Aero Contractors’ management should sensitise their crew members on the necessity of reporting notifiable occurrences”, amongst others.