All Posts in "Month: November 2020"

America International Insurance, AIG’s  net income dropped 57 percent to $281m in the third quarter of 2020 as the firm’s general insurance business booked $790m of catastrophe losses, net of reinsurance.

But AIG said that on an adjusted basis – stripping out fluctuating items and $458m of investment losses from the sale of Fortune Re third-quarter net income was 23 percent higher at $918m.

Third-quarter cat losses increased underwriting losses at general insurance to $497m for the period, up from £249m in Q3 2019. The business’s combined ratio was 3.5 percentage points higher at 107.2 percent

Covid losses during the quarter totalled $185m, booked to travel and contingency accounts and Validus Re. They added 3.1 points to the combined ratio.

Cat losses during the quarter included $605m of non-pandemic losses, in particular for US windstorm and wildfires.

Third-quarter adjusted pre-tax income for general insurance fell 18 percent to $416m, while life business surged 51 percent to $975m.

General insurance gross premiums were 4 percent lower at $8.25bn, while net premiums were down 11 percent to $5.9bn.

AIG’s international general insurance business booked an underwriting loss of $89m in Q3, an increase of 39 percent. It added just $17m to group adjusted net income in the quarter. International general insurance net premiums closed the quarter 3 percent lower at $3.16bn.

AIG’s North American general insurance business saw underwriting losses widen 81 percentto $334m for Q3.

For the nine months to 30 September, AIG swung to a net loss of $5.9bn from a profit of $2.4bn in 2019. After adjustments it recorded a profit of $1.9bn, from $4.3bn a year earlier.

AIG also said it plans to spin off its life and retirement unit through an IPO or staggered private sale, initially focusing on just under 20% of the business.

The firm doesn’t think the split with general insurance will require any additional capital for either unit, but the insurer will restructure debt.

Patoma Admin by — November 12, 2020 in Insurance 0

As digital technologies evolve, companies are finding new ways to speed up processes, reduce costs and strengthen their brand recognition in the market. Firms are continuing to boost investments in artificial intelligence, machine learning and big data and expand use of telematics, mobile phones and table computers. We explore some of the innovative initiatives and challenges that companies face in three different emerging markets.

South Africa: In the experimental stage

Although brokers continue to dominate the insurance market across Africa, the industry is quick to embrace digital solutions. As customer needs evolve, insurers struggle to strike the right balance between their legacy operations which contribute to a large revenue and the opportunities that the new digital landscape will generate.

Most customers still purchase insurance policies through financial advisors, insurance agents or brokers. However, a recent EY survey found that customers in South Africa are more likely to use digital channels to check and compare policies than their UK counterparts. The challenge remains of converting the browsing into a successful sale still prevails in these markets. .

While mobile and digital applications are targeted to specific markets, such as funeral insurance, major initiatives are transforming back-office operations to become more cost-effective and reliable. Boosting the company’s back-office efficiency without endangering the brokerage relationship will be key. Traditional insurance firms have focused on making sales processes easier for the digital customer, but primarily in non-life products because of the strong position brokers and intermediaries still possess in life coverage.

It is too early to judge success, but executives often need to explore the potential of a new distribution model. While most insurers see the benefits of digital strategies, only a few have implemented them. As digital sales increase, expect companies to launch products that enhance the customer journey.

India: Agents and brokers still reign

Even though digital channels have become a more significant method for selling insurance across India, brokers and agents continue to be the dominant point of sales. While the younger generation of consumers evaluate and assess insurance products online, the actual sale usually requires a face-to-face conversation with the agent.

By developing an end-to-end sales tool for the front-line sales staff, we are helping Indian firms develop a robust “hybrid model” where digital tools help agents find the right products to sell to the right customers. Equally significant, the move to digital sales allows agents to develop and store customer data based on their daily client interaction. Over time, this will allow agents to change their sales approach from a service delivery model to one where they own and manage client relationships, thus leading to cross-selling opportunities.

While customers for non-life policies, like travel or motor insurance, are rapidly moving to embrace digital solutions, agents will continue to be a cog in the life insurance market. However, harnessing digital applications on mobile phones can reduce friction, boost efficiency and improve the quality of sales, which may be the optimal means of servicing the Indian market.l

Bancassurance accounts for nearly one-third of all revenue generated by financial institutions in Brazil, mainly from commissions and asset management fees. As digital banking gains momentum, banks must find new ways to present their insurance products to their would-be customers even though many customers still expect personal interactions to secure a sale.

We focused our efforts with key banking clients on streamlining the distribution process within banks to reduce the time required for underwriting and processing life insurance products. The new system identifies the technical requirements to develop a policy and rapidly generates price quotes. Such a business processing system is critical for smooth communication and integrating banking and insurance.

Looking ahead, the largest growth opportunity in the Brazilian market will be most likely to emerge from annuity and universal life products which will continue to be distributed mainly by banks. Increasingly, banks must recognize the need to establish an insurance operating model that works for mobile and internet banking. This will require them to develop specialized teams that are able to sell more customized insurance solutions. New business models would leverage the customer data they receive from both, banking and insurance operations, to develop tailored products for individual clients.

Dgital will not replace agents

The three emerging markets illustrate how distribution is changing for the insurance industry. The rise of digital platforms will help insurers speed up processes and further reduce costs. In markets like South Africa, telematics is being used to assess driver behavior in underwriting automobile insurance, while smartphones in India help confirm coverage of new policies.

Though many products lend themselves to digital solutions, agents and brokers still matter and play an important role. The relationships they have developed with customers cannot be readily displaced. As a result, direct or online distribution will take time to mature in these markets, but the future looks promising.

Summary

Digital solutions offer ways for insurance companies in developing countries to reimagine how they connect and engage with customers. While distribution is changing for the industry, the rise of digital platforms will help insurers keep up pace of distribution and achieve business goals

Patoma Admin by — November 12, 2020 in Insurance 0

Cameroon Reinsurance Company, a new national company will be launched with FCFA 15 billion ($27.1 million) of capital.

Kapital Afrik informed the publication that the reinsurer is in the final stages of its formation, and is awaiting legal approvals.

The launch of a national reinsurer in Cameroon was under discussion as early as July 2019, after the government appointed consulting firm Finactu to assist in the creation.

Now, Kapital Afrik says that local re/insurers, government authorities and partners have reached an agreement on the make-up of the company.

Local insurance and reinsurance companies will own 51 percent of Cameroon Re’s capital, a strategic partner (preferably a reinsurer) will hold 34 percent, the State of Cameroon will hold 10 percent and the remaining 5 percent will be held by other miscellaneous parties.

Several other African nations currently operate a state-backed reinsurance company, including Morocco, Tunisia, Kenya, Senegal and Nigeria.

Cameroon itself used to have operate the Caisse Nationale de Réassurance (CNR), but this reinsurance initiative was liquidated back in 2000.

Patoma Admin by — November 12, 2020 in Insurance 0

Lagos State Governor, Babajide Sanwo-Olu, has disclosed that the state’s overall 2020 budget performance improved from 56 percent at the end of the first quarter to 77 percent at the end of the third quarter of 2020.

This was revealed by the Governor at the presentation of the 2021 budget to the Lagos State House of Assembly, yesterday.

Sanwo-Olu xplained that the trend of the state’s budget performance had been progressively better, and he was optimistic that by the end of the year, a performance level of at least 86 percent would be achieved irrespective of the challenges.

In May 2020, the government of Lagos State was compelled to slash its 2020 budget by 21percent from N1.169 trillion to N920.5 billion, in line with new economic realities.

The Lagos State House of Assembly approved the revised budget in August 2020 with a 10 percent reduction in recurrent expenditure and a 24 percent reduction in capital expenditure.

The revised 2020 Budget Appropriation Bill approved by the House has a total revenue of N812.47billion and a deficit financing of N108.01billion. The recurrent expenditure is N413.41billion, while capital expenditure is N507.06billion, making the capital to recurrent ratio 55:45.

The Governor stated that as of September 2020, Lagos State’s total revenue performed at 98 percent while total Capital Expenditure and total Recurrent expenditure performed at 71 percent and 83 percent respectively

Patoma Admin by — November 11, 2020 in News 0

By admin

The Corporate Affairs Commission (CAC) has disclosed its readiness to implement a new technology that will change the face of company registration in Nigeria, in accordance with global best practice. With the new technology, customers can print their certificates with verifiable QR Code from anywhere in the world amongst others.

When fully deployed, the new technology amongst others will enable the Commission dispense certificates with the mandatory requirement that 2 Directors must sign every document and be substituted with the opportunity for companies to appoint a single Authentication Officer mandated to sign transactions on behalf of the company.

This disclosure was made by the Registrar General of CAC, Alhaji Garba Abubakar, at a dinner held in his honor by the Alumni Law Class of 1988, Ahmadu Bello University.

Abubakar revealed that the new technology will be deployed as soon as the gazetting is achieved, to enable interested Nigerians register the much-awaited one-man company, limited liability partnerships, limited partnership, and many other initiatives captured in the law.

He stated that upon migration from what he called the ‘semi-automated system’ to a fully automated one, some form of validation of records for companies will be introduced free of charge in a bid to fill some gaps in the existing database.

While thanking the organizers for honoring him, Abubakar restated his resolve to ensure selfless service to the country in order to justify the confidence reposed in him by President Muhammadu Buhari.I

In his remark, the Chairman of the organizing committee, A.K. Ajibade SAN, extolled the good virtues of Garba Abubakar and thanked the Almighty God for reuniting them 32 years after to celebrate one of their own, irrespective of their tribe or religious affiliation.

Meanwhile, on his own, the BOT Chairman, A.U. Mustapha SAN, and President of the class, Dr. Ibrahim Abdul, both noted with delight that President Muhammadu Buhari selected the right man to be the Registrar General of the Corporate Affairs Commission and prayed for his success

Patoma Admin by — November 10, 2020 in Industry, Trade & Investment 0

A consortium composed of the Canadian Intact Financial Corporation and the Danish insurer Tryg is interested in acquiring Royal & Sun Alliance (RSA for £ 7.1 billion ($9.3 billion).

RSA Insurance Group plc is a British multinational general insurance company headquartered in London, England. RSA has major operations in the United Kingdom, Ireland, Scandinavia & Canada. It provides insurance products and services in more than 140 countries through a network of local partners

If the transaction is approved, Intact will retain RSA’s Canadian and UK operations while Tryg will take over RSA’s operations in Sweden and Norway. The British insurer’s business in Denmark will be managed by both companies

It later fleshed out the details to reveal the pair are ready to pay £7.1bn, with Intact paying £3bn and Tryg paying the balance.

Following a takeover, RSA would be broken up, with Toronto-based Intact keeping RSA’s Canada and UK and International operations – which include the More Than brand – while Tryg would own RSA’s Sweden and Norway operations. Intact and Tryg would co-own RSA’s business in Denmark.

Investors have reacted ecstatically. Shares of RSA, which had fallen by 19% since the beginning of the year, shot up by 46% after news of the approach leaked into the market.

Shares of RSA are valued at 685p each under the proposal while investors would also receive the already-announced half year dividend of 8p a share. The last time shares of RSA were changing hands at that sort of level was back in December 2008.

Patoma Admin by — November 10, 2020 in Insurance 0

Covid-19 costs for France is estimated  at €86 billion ($100.57 billion) in 2020.

It is the short-time work scheme that costs the most with €34 billion  ($39.76 billion).

In second place comes the solidarity fund with €19.4 billion  ($22.68 billion). It is intended to provide assistance to small businesses and self-employed workers.

Exceptional health expenditures are estimated at nearly €12 billion ($14.03 billion).

The exemptions from social security contributions enjoyed by companies impacted by Covid-19 amount to €8.2 billion ($9.59 billion). Ultimately, social benefits represent €2 billion ($2.34 billion).

Other costs include credits and exceptional aid for the motor and aeronautics industry as well as for self-employed workers and SMEs.

Patoma Admin by — November 10, 2020 in News 0
PenCom set to launch RSA transfer style

The National Pension Commission (PenCom) is set to launch the Retirement Savings Account (RSA) transfer system come November 16, 2020.

The transfer sustem which will enable contributors under the Contributory Pension Scheme to transfer their accounts from one Pension Fund Administrator (PFA) to another once in a year.

The Commission made this known in a statement Monday in Abuja

According to it, “The National Pension Commission (the Commission) wishes to inform all stakeholders and the general public, especially Retirement Savings Account (RSA) holders under the Contributory Pension Scheme, that the Commission has concluded arrangements for the take-off of RSA Transfers.
Accordingly, RSA holders may transfer their accounts from one Pension Fund Administrator (PFA) to another once in a year, in line with Section 13 of the Pension Reform Act 2014.
The activation of the RSA transfer process will engender competition and improve service delivery in the pension industry, while asserting the right of RSA holders to determine which PFA manages their pension contributions and retirement benefits.”
Patoma Admin by — November 9, 2020 in Others 0

By admin

Ethiopian Airlines has taken delivery of two new wircrafts A350-900 to add to it’s fleet thus expanding businesses.

The company at the weekend took delivery of two of the 10 new Airbuses A350-900 it ordered in 2017, bringing the total number of its Airbus fleet to 16

The Chief Operating Officer, Mesfin Tasew stated that the addition v leatly shows that Ethiopian Airlines is founded on a strong vision, capacity to execute its vision even though it has similar challenges to other airlines.

According to him, “The airline has been operating A350-900 planes for the last four years”.

“Ethiopian is taking delivery of these aircraft at a time when the entire air transport industry is under a big challenge caused by Covid-19, he said”

He pointed out that Ethiopian had transported around five tons of humanitarian aid, medical supplies and IT equipment from France to Addis Ababa in partnership with Airbus Foundation and other European donors.

The humanitarian aid, medical supplies and equipment, were delivered to Ethiopia’s Ministry of Health and a humanitarian organisation which runs a children’s hospital in Ethiopia.

Meanwhile, Health State Minister Seharela Abdullahi, said this kind of support is crucial in countries with poor infrastructure such as Ethiopia.Citing the critical role played by Ethiopian Airlines since the outbreak of the coronavirus pandemic, she added, “I would like to thank Ethiopian Airlines for their tremendous support in the fight against Covid-19.

Patoma Admin by — November 9, 2020 in Aviation 0 

By Favour Nnabugwu


The Managing Director of Royal Exchange General Insurance Company, (REGIC), Mr. Benjamin Agili said the company has acquired an Integrated Environmental Solutions, IES,  and Enterprise License Program, ELP to drive business digitally.

In  an interview with Patomabusinesonline in Lagos, Agili said that REGIC as a company, could not afford to be left behind in digitalizing its business operations.

He said the company is currently undergoing a digital transformation that would place it  in the best position in the industry.

"We are undergoing digital transformation;  we have just acquired a new business core Integrated Environmental Solutions, IES,  and we are still at the implementation stage, which is an Enterprise License Program, ELP which is a compliant from the end."

"We intend to do just like the name implies digital transformation, we intend to drive our business digitally and expand our retail lines," he said.

The REGIC Chief Executive Officer said that the digital solutions will enable  "Our customers, our marketers, especially our retails customers and our line customers to shop from the comfort of their homes or wherever. If you have a tablet you should be able to start a transaction and complete the transaction from the comfort of your home."

He stressed that the Royal Exchange wants to be a fit company, we continue to reinvent ourselves. Any particular company that has failed to reinvent itself and adjust to the changes that are happening in the market will not be fit for the period we are in".

Agili said the company at third quarter we are growing reasonably in excess of 12 percent of previous year, we are also ahead of budget in terms of all indicators to our financial statement in terms of profit before tax and all other issues. We are also very excited with our claims issues, combined issues and all the other issues. I can only say that we are doing very well".

Despite the harsh business environment and the covid-19 pandemic, he said "REGIC still want to continue to do more and that is not to take away the fact that it has been a difficult year in terms of the challenges, the impact of COVID-19 on the general market, and recently the #EndSARS protest and the impact and the collateral damage of the impact of COVID on the industry".

"Definitely,  as a  reputable and as a big company, we are not going to be left behind from the negative impact of the destructions that followed the #EndSARS protest but we are prepared"

Following the destruction of the #ENDSARS and the after effect,  he affirmed that the company received a lot of claims and that is not to say, they authenticate their claims and we will settle afterwards.

"We have a lot that have registered claims but we are waiting for their documentation and the necessary adjustment and authentication of those claims. We expect particularly those business premises that had riot and civil commotions extension, where it is not covered in the policy, it will not be covered".

He  disclosed that the company was  receiving a lot of demand on riot, strike and civil commotion which it subscribe to as soon as the National Insurance Commission releases guidelines on them.

"We have also recently been experiencing a lot of demands for riots and civil commotions extensions which I believe the insurance industry is also addressing it, and finding how do we adjust because,  it is becoming a major issue in our market,  and so we have to price it appropriately until we are able to accommodate it".

"You will recall that almost this time last year, we had a similar incidence and we had a massive destruction following the xenophobia protest that led to the destruction of most of the retail outlets;  the insurance industry came out and paid substantially. And if it becomes a recurring decimal , we have to look at it and see how we can accommodate this risk effectively in our business".
Patoma Admin by — November 8, 2020 in Insurance 0