All Posts in "Month: February 2021"

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The Indian government has an increase in the permitted foreign direct investment in insurance companies from the current 49 percent to 74 percent

In her Budget 2021-2022 speech, minister of finance Nirmala Sitharaman said: “I propose to amend the Insurance Act, 1938 to increase the permissible foreign direct investment limit from 49 percent  to 74 percent in insurance companies and allow foreign ownership and control, with safeguards.”

She added: “Under the new structure, the majority of directors on the board and key management persons would be resident Indians, with at least 50 percent of directors being independent directors, and specified percentage of profits being retained as general reserve.”

AM Best called the move an opportunity for significant inflow of capital into the country’s fast-developing insurance market. “The increase will allow Indian insurers greater financial flexibility in additional capital-raising, and over time is expected to support a bolstering of the industry’s solvency.

Aside from the government’s mandate for control of the companies to remain with resident Indian citizens, which may be a limiting factor for foreign insurers looking to hold majority interest, a specified percentage of profits is also to be retained as a general reserve, which will contribute to the strengthening of companies’ capital positions,” said the ratings agency.

It added: “Best is of the opinion that the Indian insurance industry is likely to attract significant overseas capital, which is crucial to strengthening the solvency of the overall industry, particularly for the general insurance companies, which recorded declining capital buffers over the last few years. The raised foreign direct investment cap should also enable insurers to expand underwriting operations further, which will contribute to growing insurance penetration in the country.”

The move was broadly welcomed by industry in India. Indian business paper Financial Express said the increase “will help insurance companies to raise funds to ensure their solvency is maintained in line with growing business needs”, adding: “This may also help increase M&A in the sector while paving the way for PE funds to enter the space.”

The paper quoted Manoj Purohit, partner and leader – financial services tax, BDO India as saying: “This will also augment foreign inflows and help attract more foreign companies.”

In another Indian business paper, Business Standard, Vighnesh Shahane, managing director and chief executive officer at Ageas Federal Life Insurance, said it was a move in the right direction. “Insurance is a capital-intensive business and [after] the pandemic many Indian partners are not in a position to invest further capital in their companies. Certain companies also require capital infusion to conserve solvency margins. The Covid-19 pandemic has shown that further penetration of insurance in India is needed and for that, capital infusion is required. The foreign direct investment hike will give the foreign promoter an opportunity to buy out its cash-strapped Indian partners if required and provide the needed cash infusion,” he said.

It also quoted Anuj Shah, a partner at Khaitan & Co: “This one reform will overhaul the insurance sector with a newly found tailwind of foreign capital and knowhow. The finance minister has also proposed that foreign ownership and control (which was not available until now) will be permitted with safeguards. While we wait to see the final notification, this is indeed a very welcome move for the insurance sector.”

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Patoma Admin by — February 8, 2021 in Insurance 0

The Federal Government of Nigeria through the Nigerian Civil Aviation Authority (NCAA) has lifted the suspended order place on Emirates Airlines after much discussion late yesrday eveingb

The suspension placed a 72-hour suspension on outbound Emirates flights from Nigeria

A February 4, 2021, circular signed by NCAA Director-General, Musa Nuhu, accused Emirates Airlines of violating guidelines put in place by the Presidential Task Force (PTF) on COVID-19.

The authority further accused the airline of airlifting passengers from Nigeria using rapid antigen tests conducted by laboratories not approved by regulatory authorities.

“Emirates Airlines has not been in compliance with the two options given by the PTF as records obtained from Nigerian Airspace Management Agency (NAMA) indicates that Emirates Airlines operated the flights from both Murtala Mohammed International Airport, Lagos and Nnamdi Azikwe International Airport, Abuja” the circular read.

“Emirates should suspend its operations to Nigeria (Lagos and Abuja) effective 72 hours from midnight on Thursday, February 4, 2021.

“During the 72-hour leeway, Emirates Airlines is only authorised to bring passengers into Nigeria. Outbound passengers are not authorised.”

The NCAA stated that more sanctions would be imposed on Emirates Airlines for the violations of COVID-19 protocols.

It added that the airline would be informed as to when to resume operations.

Patoma Admin by — February 5, 2021 in Aviation 0
FG to kick Kano- Maradi, Kano-Dutse railways Feb. 9

Breaking: FG to kick start Kano-Maradi, Kano-Duste railway, Tuesday

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The Federal government has announced Tuesday, 9 February, 2021 for the ground breaking ceremony of the Kano-Maradi railway project.

This project is one of many rail projects planned by the President Buhari administration with the aim of linking the entire country by rail and boosting economic development.

Minister of Transportation, Rt. Hon Chibuike Rotimi Ameachi disclosed this on Friday via his twitter handle.

”We are pleased to announce the Ground breaking of the Kano-Maradi, Kano-Dutse Railway Project, slated for Tuesday. Our
@NGRPresident @MBuhari would do the honours. Work begins.”

Patoma Admin by — February 5, 2021 in Others 0

Total pension assets under the Contributory Pension Scheme rose by N2.1tn to N12.3tn at the 2020 from N10.2tn at the end 2019, latest statistics from the National Pension Commission showed on Thursda.

According to the latest statistics from the National Pension Commission showed N8.13tn of the funds was invested in Federal Government of Nigeria Bonds.

According to the figures, N858.46bn and N92.91bn were invested in domestic and foreign ordinary shares respectively.

It added that N1.68tn and N161.39bn were also invested in local money market securities and mutual funds respectively.

As part of efforts to boost services in the industry, PenCom opened the transfer window to enable workers in the Contributory Pension Scheme to change their pension companies.

PenCom said RSA holders may transfer their accounts from one Pension Fund Administrator to another once in a year, in line with Section 13 of the Pension Reform Act 2014.

Prior to this launch, the commission said it had successfully developed the RSA transfer application, a robust electronic platform that would enable seamless RSA transfers.

In addition, it said the commission had conducted extensive workshops for licensed pension operators and state pension bureaus in readiness for the event.

Patoma Admin by — February 5, 2021 in Others 0

AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb+” of Custodian and Allied Insurance Limited (CAI) (Nigeria).

The outlook of these Credit Ratings (ratings) is stable. CAI is the wholly owned non-life subsidiary of Custodian Investment Plc.

The ratings reflect CAI’s balance sheet strength, which AM Best categorises as very strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management (ERM).

CAI’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Partially offsetting factors include CAI’s high-risk investment portfolio, with a significant exposure to non-investment grade bonds, and its high dependence on reinsurance.

The ratings also factor in the company’s exposure to the high levels of economic risk, and very high levels of political and financial system risk associated with operating exclusively in Nigeria.

AM Best expects the ongoing development of CAI’s ERM framework to be a positive factor in sustaining the company’s balance sheet strength. In particular, the company’s internal risk-based capital model supports strategic decision making in areas such as reinsurance placement and capital management.

CAI has a track record of strong underwriting and overall profitability, as illustrated by a five-year weighted average (2015-2019) combined ratio and return on equity of 85.0 percent and 22.1percent  (as calculated by AM Best), respectively. In recent years, the company has benefited from significant foreign exchange gains related to the devaluation of the Nigerian Naira against the U.S. dollar, as it holds approximately two-thirds of its liquid assets in foreign currencies.

CAI has a leading position within its domestic market. Nonetheless, its business profile assessment is limited, reflecting its concentration in Nigeria.

Patoma Admin by — February 5, 2021 in Insurance 0

AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of AXA Mansard Insurance Plc (AXA Mansard) (Nigeria). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect AXA Mansard’s balance sheet strength, which AM Best categorises as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also reflect rating enhancement from AXA Mansard’s ultimate parent, AXA S.A. (AXA group).

AXA Mansard’s balance sheet strength is underpinned by risk-adjusted capitalisation that is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Capital consumption is significantly influenced by the company’s real estate holdings, which in 2019 equated to 56% of capital and surplus. The company’s BCAR scores are expected to have improved for year-end 2020, driven largely by internal capital generation and limited growth in underwriting risk. The balance sheet strength assessment also considers AXA Mansard’s exposure to the high levels of economic, political and financial system risks that are associated with operating in Nigeria.

AXA Mansard’s adequate operating performance reflects its modest overall profitability combined with volatile underwriting performance, as demonstrated by its five-year (2015-2019) weighted average combined ratio of 105%, which ranged between 98 percent  and 113 percent Historically, technical performance had been negatively impacted by the company’s high expense ratio, which exceeded 44 percent in the years 2015-2017. Overall operating profitability has been modest when factoring in local inflationary conditions, demonstrated by a five-year weighted average return-on-equity ratio of 11 percent supported by investment returns in excess of 9 perfect over the same period. AM Best expects AXA Mansard to generate a significantly improved result in 2020, with the company recording net income of NGN 5.7 billion (USD 14.7 million) for the first nine months of the year, a NGN 3.6 billion increase against the same period in 2019.

As AXA Mansard continues to execute its growth plan, AM Best expects the company’s prospective operating performance to benefit from a reduced expense ratio as a consequence of economies of scale.

AXA Mansard is a composite insurer concentrated in the Nigerian market. The company has an aggressive growth strategy within the health insurance line, which in 2018 led to it becoming a market leader in this segment. With support from the AXA group, AM Best expects the company to continue to evolve its risk management capabilities.

Patoma Admin by — February 5, 2021 in Insurance 0

NEM Insurance Plc recorded profit for 2020 rose to N4.084 billion from N2.378 billion in 2019 representing 71.72 percent be increase.

The company released its interim financial statement for the fourth quarter (Q4) ended December 31, 2020 with its  profit after tax jumped by 347 percent in Q4 2020 to N2.967 billion from N663.414 million in Q4 2019.

Its gross premiums written dropping slightly to N3.267 billion in Q4 2020 from N3.355 billion in 2019.

The gross premiums written for the full year rose to N22.036 billion from N19.760 billion in 2019.

The insurer improved on the profit after tax jumped by 347 percent in Q4 2020 to N2.967 billion from N663.414 million in Q4 2019

 

Patoma Admin by — February 4, 2021 in Insurance 0

The Federal Executive Council, FEC, meeting has approved the establishment of 20 new private universities in the country.

The Minister of Education, Adamu Adamu, made this known at end of the 32nd virtual council meeting presided over by President Muhammadu Buhari at the Council Chamber, Presidential Villa, Abuja on Wednesday..

The Minister said the approved universities will get their provisional licenses from the National Universities Commission (NUC), which they will use for the next three years while monitoring and evaluation will go on.

The approved universities are: Topfaith University, Mkpatak, Akwa Ibom State. Thomas Adewumi University, Oko-Irese, Kwara State, Maranathan University, Mgbidi, Imo State, Ave Maria University, Piyanko, Nasarawa State, and Al-Istiqama University, Sumaila, Kano State.

Others are Mudiame University, Irrua, Edo State, Havilla University, Nde-Ikom, Cross River State, Claretian University of Nigeria, Nekede, Imo State, NOK University, Kachia, Kaduna State and Karl-Kumm University, Vom, Plateau State.

Also approved are James Hope University, Lagos, Lagos State, Maryam Abacha American University of Nigeria, Kano, Kano State, Capital City University, Kano, Kano State, Ahman Pategi University, Pategi, Kwara State, and University of Offa, Offa, Kwara State.

Others are Mewar University, Masaka, Nasarawa State, Edusoko University, Bida, Niger State, Philomath University, Kuje, Abuja, Khadija University, Majia, Jigawa State and Anan University, Kwall, Plateau State.

Nine of the private universities are located in North Central, three in South South, two in South East, five of them in North West and one in South West.

Patoma Admin by — February 3, 2021 in News 0

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Patoma Admin by — February 2, 2021 in Others 0
Global Insurance increase to 22% in Q4 2020 but slowing down

Global insurance prices jumped 22 percent year on year in Q4 2020, compared to 20 percent, 19 percent and 14 percent in the preceding three quarters of last year, according to Marsh’s Global Insurance Market Index.

The findings suggest that although things are still getting tougher for buyers, the rate of market hardening may have begun to taper off.

Speaking on Marsh & McLennan’s Q4 and full year result call, the firm’s president and CEO Dan Glaser said the Q4 22 percent increase marks the 13th consecutive quarterly rise in the commercial P&C market.

He said global property insurance pricing was up 20 percent in the quarter year on year. This follows an average increase of 21vpercent in the third quarter of 2020, 19 percent in Q2 and 15 percent in Q1.

Global casualty rates were up 7 percent in the last quarter, said Mr Glaser. According to Marsh’s index, casualty pricing rose 6 percent in Q3, 7 percent in Q2 and 5 percent in Q1.

Global finpro risks saw the biggest price rise in the fourth quarter, with an eyewatering 47 percent on average. Finpro rates were up 40 percent in Q3, 37 percent in Q2 and 25 percent in Q1, according to Marsh.

The broker added that US workers compensation pricing declined modestly in the fourth quarter of last year.

Marsh’s index is skewed towards large accounts. But Mr Glaser said SME pricing also continues to rise, though the magnitude of increases is less than for the bigger buyers.

“At the January renewals, commercial insurance market conditions remained challenging across products and regions. Risks are able to be placed, although at higher prices and in some cases with less coverage and stricter terms. Insurance carriers continue to push for rate increases in the face of losses, low returns and interest rates,” said Mr Glaser.

He added that 1 January reinsurance renewals ultimately settled at the lower end of early predictions. But “negotiations were lengthy and complex, with a significant focus on coverage and structure”, said Mr Glaser.

Patoma Admin by — February 1, 2021 in Insurance 0