LASACO Assurance P1c, an active player in Nigeria’s sector said it had obtained regulatory approvals to reconstruct its issued and fully paid-up Share Capital of 7,334,343,421 Ordinary shares of S0kobo each in the ratio One (1) new Ordinary share for every Four (4) Ordinary shares previously hetd by the shareholders of LASACO Assurance Plc.

In a notice at the Nigerian Stock Exchange, LASACO said the move followed the approval of the shareholders at the 39th Annual General Meeting of the company held on 8th October, 2019.

To enable the reconstruction of the shares, the company had given notice of the suspension of trading on the shares of LASACO for two weeks beginning from Monday Ist February, 2021 to Friday 12th February, 2021 both days inclusive.

“The Register of shareholders shall be closed for this period to enable the Central Securities Clearing Systems P1c.(CSCS) and Apel Capital Registrars Limited, the Registrars to LASACO, to finalize the Reconstruction of the shares and produce a new Register for the Company,” the notice said.

The hardening reinsurance market could mean higher prices for corporate insurance buyers into 2021 and signal a period of restricted coverage and reduced underwriting flexibility. The hardening reinsurance market is likely to exert more influence on the primary commercial P&C and specialty markets than has been the case in previous years, according to Clarissa Franks, managing director and risk management placement leader at Marsh UK.

“Reinsurance is vital to insurers’ ability to operate and is a key operational expense. As insurers seek to improve profitability, it may not be feasible for insurers to absorb additional reinsurance costs, which may result in price increases for buyers,” she told Commercial Risk Europe.

Changes in the direct and facultative reinsurance market during the past 18 months have affected the ability of some insurers to offer the same level of cover they once could, according Ms Franks. Now the treaty market, the mainstay of reinsurance protection for most large insurers, is also showing signs of change, she explained.

Many specialty property insurers had come to overly rely on facultative reinsurance, which is traditionally used by primary carriers to address specific risks or regions such as high concentrations of catastrophe risks, or very large corporate insurance programmes, according to Ms Franks.

However, following a run of catastrophe losses in 2017 and 2018, as well as efforts by Lloyd’s to root out underperforming business, the facultative market has contracted, forcing some insurers to suddenly adjust line size and capacity, she explained.

Perhaps more significantly, treaty renewals in the second half of 2020 point to further changes in the reinsurance market, with price increases and coverage restrictions in some “topical areas”, said Ms Franks. “The ramifications for P&C and specialty treaty renewals so far this year has been for coverage and exclusions for communicable diseases,” she said.

“The theme coming through is that there may be a level of inflexibility from insurers due to reinsurance conditions,” said Ms Franks. “If you are a corporate buyer, you will be used to getting bespoke cover. Now, some cover – like communicable diseases or silent cyber – may not be available, no matter how confident the underwriter is, because there is no longer reinsurance protection available,” she said.

Treaty reinsurers are mandating exclusions for communicable diseases in some lines, as well as for silent cyber and civil unrest in property coverages, Ms Franks continued.

“Now, insurers have little choice as reinsurers are mandating exclusions. This is true for silent cyber, where reinsurers seek to identify and minimise cyber cover in non-cyber P&C insurance,” she said.

Reinsurance capacity remains adequate for most lines, however, it is “tightening” for certain loss-affected areas, such as financial, retro and US auto, according to Ross Howard, global executive chairman of Lockton Re. Risks that have experienced major losses are “truly hard”, he told CRE.

For example, reinsurance capacity for directors and officers insurance is “seriously tightening” as a number of players have withdrawn from the market, making it harder to place programmes. Reinsurers are also growing more cautious of cyber exposures, in part due to a rise in ransomware claims and concern for systemic risks, exacerbated by the pandemic, according to Mr Howard.

Specialty lines with poor loss records are under increased scrutiny and subject to price increases, according to Gianfranco Lot, head of globals, reinsurance at Swiss Re. Marine, energy and aviation, as well as specialist property areas like engineering and mining are undergoing a “correction”, while trade credit insurance is in sharp focus given the impact of the pandemic on the global economy, he said.

Like other reinsurers, Swiss Re is taking a tougher stance on casualty reinsurance at renewals, in part a reflection of social inflation and low interest rates, according to Mr Lot. “The US liability market is hard. Capacity in the reinsurance market has reduced and reinsurers are demanding improved conditions. Prices have been pushed up in the past 18 months and we expect they will do for some while longer,” he said.

Faced with higher reinsurance costs, insurers have a number of options. These include passing on the additional costs, absorbing increases or restructuring their reinsurance programmes and primary insurance offerings. “Increased reinsurance pricing will, at the very least, help sustain pricing on the primary side,” said Michael Van Slooten, head of business intelligence at Aon Reinsurance Solutions.

“Reinsurance buyers will have to pay more for their cover, but I would argue that they are receiving enough at the front end to cope. There does need to be a catchup as reinsurers’ earnings are well below expectations,” he added.

Changes in the reinsurance market are driven by the need to address poor results, according to Mr Van Slooten. Reinsurers’ earnings have fallen due to a combination of factors, including catastrophe losses, social inflation, low interest rates and the effects of almost a decade of market softening, which eroded premium rates by as much as one third in some lines, he said.

“The reinsurance sector remains well capitalised despite a run of losses, which has helped keep a lid on rates. But we are at a point where tolerance of poor earnings has gone and management teams are under pressure to increase earnings. Increasing today’s pricing is really the only lever left to reinsurers,” he added.

Unlike past hard market cycles, current hardening is not a consequence of falling capacity, explained Mr Van Slooten. In fact, reinsurance market capital has proved resilient despite the pandemic, and some new capital has flowed into the market. According to Aon, global reinsurer capital was broadly flat during the nine months to 30 September 2020.

Despite recent catastrophe events and a global pandemic, reinsurers remain well capitalised, agreed Carlos Wong-Fupuy, senior director of global reinsurance ratings at AM Best. He expects the hard market to continue throughout next year.

“In order to compensate for previous losses, we would expect the hardening market to last through 2021. This assumes a continued period of historically low investment returns, a required return on capital aligned with a more uncertain underwriting and economic environment, and improved market discipline, with no material influx of naive capacity,” he added.

In response to hardening rates, there have been a number of capital-raising initiatives and startup (re)insurance companies formed. For example, in December, Inigo and Vantage were launched with $800m and $1bn of capital respectively, while Conduit Re floated in London with a $1.1bn capitalisation.

“While not insignificant individually, currently they do not represent a material addition to the $470bn that we estimate as combined capital for the whole market. Combined with the existing third-party capital capacity – which may marginally decline this year, we still anticipate in total a slight reduction compared to the previous year,” said Mr Wong-Fupuy.

“Given the current global pandemic and economic situation in general, we believe most new entrants may face a challenging environment dominated by a flight to quality that favours more established, highly rated competitors,” he said.

Reinsurance market conditions will contribute to higher prices in most commercial lines in 2021, but there are a number of other trends contributing to continued upward trajectory of prices in the insurance market, said Jennifer Marshall, director at AM Best. “It’s difficult to separate the specific effect of the hardening reinsurance market from those other trends but, clearly, the reinsurance market is contributing to the dynamic,” she said.

“We expect that insurers will carefully re-evaluate their reinsurance needs, and it’s likely that there will be some increased retentions and reductions in excess layers, particularly for more opportunistic buys made when reinsurance market conditions were softer. This may drive some change in primary market capacity, as insurers reduce availability of increased limits and excess coverage. Changes in insurance policies, particularly bespoke programmes for large commercial insureds, may be needed if reinsurers implement and maintain stricter policies about what underlying exposures they will cover,” she added.

Universal Insurance Plc, has rolled out  insurance products called Okada Personal Assurance & Safety Scheme (Okada Pass), which are to ensure the safety of Okada riders and their passengers in Nigeria.

Okada Pass plan is uniquely designed to provide cover for personal accident to the insured Okada rider. The products will also be sold as an individual policy and as a group scheme to Okada riders.

The plan is a compensation plan for riders in case of an accident. The premium amount to pay will however depend on the Type of Plan you choose.

The Okada Personal Assurance & Safety Scheme (Okada Pass) comes in five different plans:

Jeje Cover- With as low as N2,300 yearly premium a rider can get paid up to N50,000 for Medical Expenses; N100,000 for Permanent Disability; N100,000 for Death; N50,000 for Third Party Liability and 10,000 for Repair Assist (Owned damage).

Carry -Go Cover: Enables the rider to get paid up to: N75,000 for Medical Expenses; N150,000 for Permanent Disability; N150,000 for Death; N65,000 for Third Party Liabilities and N15,000 for Repair Assist (Owned damage). This cover attracts a yearly premium of N3,400.

The No-Shaking Cover comes with an annual premium of ₦4,000 which covers the Rider and enables him to get paid up to: N80,000 for Medical Expenses; N200,000 for Permanent Disability; N200,000 for Death; N70,000 for Third Party Liability and N20,000 for Repair Assist (Owned damage).

Under the Confaam Cover, riders are expected to get N80,000 for Medical Expenses; N200,000 for Permanent Disability; N200,000 for Death; ₦70,000 for Third Party Liability; ₦20,000 for Repair Assist (Owned damage) and ₦20,000 for Passengers Medical Expenses. The premium for this cover is ₦4,400 per year.

The Digital Bike Cover allows policyholders to pay a yearly premium up to N10,400 which qualifies them to get paid up to N100,000 for Medical Expenses; ₦250,000 for Permanent Disability; ₦250,000 for Death; ₦75,000 for Third Party Liability; ₦50,000 for Repair Assist (Owned damage); ₦50,000 for Passengers Medical Expenses and ₦250,000 for Goods/Parcel (Annual Limit).

Speaking on the product, the Managing Director, Mr Benedict Ujoatuonu, stated that Okada Pass is an innovative product that provides benefits to Okada riders.

According to Ujoatuonu, “If you take a look at the level of accidents that involve the Okada riders every day on Nigerian roads, they are high and most often you discover they are left without any form of Benefits that come from insurance. So, this is what our Okada Pass is coming to take care of”.

“We provide them with personal accident Cover that makes sure that when they sustain any injury that requires medical attention,they will get it from the policy. Even if it is disability which is very rampant in Okada business, they will be covered by our policy. We will compensate the family of the rider if it results to death. Our Okada Pass is an innovative insurance product which has everything they need in the Cover.”

He urged Okada riders and their groups to embrace the new products so that they can create benefits for their members which will in turn sustain their business.

With an asset base of over N11Billion, authorized, share capital of 16Billion units and N8Billion paid-up respectively,Universal Insurance Plc. is a General Business organizationregistered to underwrite General Insurance business.

The Managing Director revealed that the Company is now fully computerized to drive excellence in service delivery adding that they are widely known for providing peace of mind to their clients and enriching their quality of life through their partnership in the management of the risks they face.