Pension fund invested in 3 Ijarah Sukuk by FG – Longe

By Favour Nnabugwu


Pension funds in Nigeria have invested about N85.07bn so far in the 3 rounds of Ijarah Sukuk issued by the Federal Government of Nigeria.

The Managing Director, AIICO Pension Managers Limited, Mr. Eguarekhide Longe made this point, while speaking on the State of Affairs on Islamic Finance in Nigeria.

In 2004-2014, introducing the new regulation leads to  pension reform act 2014, he said the investment regulation came up and in 2018 the National Pension Commission introduced a multi-fund structure as the past was single fund structure. In February 2019, the commission announce a fund six on ethical investment principles concept of Islamic finance to pension industry. According to him a lot of contributors prefer their money to be invested in ethical finance.

He highlighted 3 significant areas that the pension funds have embraced to achieve scale which include understanding pension reform; understanding the participation of pension Funds and Knowledge and Capacity Building

According to him, “It has been very useful as a lot of investors want to invest in Islamic Finance. Also, there was an introduction of implementation and framework to ensure that actual investing is done according to Islamic principles.”

Part of the regulation from the CBN is the prescription of a resident shariah advisor on each pension fund administrators or team will assure that things are done in right way. Also, there must be recognition that the fund 6 must-have Islamic shariah-compliant asset as well as conventional assets for a period up to 2025, where it will be shut out completely for the funds to absorb all contributions and make full investments.

He said pension managers believed  investing in projects that are being tied to specific assets, can be monitored, and determine that they meet their objective.

Longe acknowledged the fact that the Islamic finance sector in Nigeria continues to grow with increased interest for market participants, and a growing number of players including  two Islamic banks, four Takaful insurance companies, several microfinance banks and managed funds.

The first Sukuk issued in 2017  which was invested on physical roadshow, was successful and got 105 percent  subscription, the second sukuk got 132 percent subscription and the third Sukuk in 2020 got subscription of almost 470 percent

The webinar was organized by IFN OnAir Forum in partnership with Nigerian Exchange Group.

Africa’s insurance market ready for takeoff

By Favour Nnabugwu


Africa is one of the world’s hot regions for insurance. Steady economic growth in most countries combined with a largely underdeveloped insurance sector have positioned the continent as the second-fastest-growing region for insurance globally after Latin America.

Prior to the impact of COVID-19, the insurance market was expected to grow at compound annual growth rates (CAGRs) of 7 percent per annum between 2020 and 2025, nearly twice as fast as North America, over three times that of Europe, and better than Asia’s 6 percent.

With the continent now battling the novel coronavirus, our modeling in South Africa and recently published financial results across the continent indicate that these projections are likely to take a knock over the next three years.

The pandemic is profoundly affecting both lives and livelihoods, and consumers are cutting back on discretionary expenditure—including insurance in the face of income and market volatility. However, this impact is expected to delay rather than alter the pattern and potential of future growth.

And in some cases, the crisis may accelerate existing trends—notably the shift toward digital and remote channels, which has the potential to offer new opportunities to both insurers and consumers.

This article outlines the current state of the diverse African insurance market and the trends that are shaping it, and articulates five imperatives for achieving success on the continent. We believe that a strategic approach that takes into account the unique characteristics of African markets and looks to collaborate with regulators to drive reform and safeguard consumers could unlock significant value not just for industry players but for society more broadly at this critical time.

The African insurance market’s immaturity points to significant scope for growth
Africa’s insurance industry is valued at about $68 billion in terms of GWP and is the eighth largest in the world—although this is not equally distributed across the continent. Markets are inconsistent in terms of size, mix, growth, and degree of consolidation, with 91 percent of premiums concentrated in just ten countries. South Africa, the largest and most established insurance market, accounts for 70 percent of total premiums.

Outside of South Africa, we see six primary insurance regions in Africa. In the Southern Africa region, 54 percent of premiums are for life insurance. Nonlife insurance, however, plays a larger role in anglophone West Africa, North Africa, East Africa, and even more so in francophone Africa

The level of maturity in these six regions is low, relative to global reference countries, as measured by insurance density (premium per capita). While most African countries have experienced double-digit insurance growth in CAGR in local currency over the last five years, this has mostly been driven by economic growth, rather than deepening market penetration. Levels of insurance penetration

In Africa are half the world average measured as a percentage of GDP, and premiums per capita are 11-fold lower than the world average.

This points to significant scope for growth.

The bulk of the growth in Africa is likely to come from pensions and individual life insurance— which is the fastest growth line of business on the continent, although starting from a smaller base compared to nonlife insurance. While motor insurance is the largest contributor to nonlife insurance—driven by requirements for a compulsory minimum level of insurance, often third-party liability in countries like Morocco, Kenya, Nigeria, and Egypt—accident insurance, health insurance, and property insurance have all shown faster growth in recent years.

The prospects for growth in commercial lines are also good. In Nigeria, for example, commercial insurance has performed strongly, with oil and gas growing at 9 percent per annum and marine and aviation at 10 percent per annum between 2014 and 2018. In 2018, oil and gas insurance and marine and aviation insurance accounted for 34 percent and 11 percent, respectively, of nonlife gross premiums in that country. In Ghana, the Ghana Oil and Gas Insurance Pool (GOGIP) almost doubled from $25 million in 2016 to $48 million in 2019 and represents approximately 15 percent of total nonlife premiums in that country.

Across the continent, distribution channels also vary by region as well as between life and nonlife products. Brokers and agents remain the most prominent channels, although direct sales and bancassurance have increased their share. For example, in the Ghanaian life-insurance market, the bancassurance share of premiums has almost doubled from 7 percent in 2015 to 13 percent in 2019.

Key trends could unlock insurance growth in Africa

Insurance in Africa is on the move, and several trends show promise for the sector. Our analysis highlights five that will be pivotal in determining how the sector evolves in a postpandemic world.

Stimulating growth through structural reform

With the exception of Morocco, where there has been a big investment in agent networks, and Ghana where insurance growth is catching up to GDP, growth in Africa’s insurance sector is being driven primarily by economic growth rather than deepening market penetration. And where penetration is occurring, it is mostly accompanied by structural reforms. Market liberalization and deregulation, the enforcement of compulsory insurance, increased access through wider distribution, public–private partnerships, and regulation to support innovation and access have all been shown to build consumer trust and develop more resilient insurance industries with better-protected populations in comparable markets.

Consumers in Turkey, for example, have benefited from the enforcement of desirable compulsory insurance such as earthquake insurance on private dwellings and third-party liability insurance. And the Pension Reform Act of 2014 in Nigeria has benefited both consumers and the insurance industry alike, leading to a 70 percent growth in the sale of pension products in that country between 2012 and 2017.3 Similarly, private–public partnerships between insurers and governments, such as a scheme to subsidize agricultural insurance in Turkey, have played a key role in expanding the industry in some regions and ensuring that consumers who need it have access to relevant insurance products. While in India, the deregulation of the state-owned monopoly opened the market to private players as well as foreign investment.

Increasing access through digital innovation, wider distribution

The shift to digital channels in Africa is well underway, and with that comes greater expectations of service delivery. While we are seeing a number of insurers starting to digitize customer journeys, significant opportunities still exist to accelerate this in many markets.

To meet rising demand for digital solutions, Insurtechs have been quick to step in. For example, Naked, a fully digital player focused on motor and home insurance in South Africa, is offering competitive prices to customers by reducing its operational costs through automation—boasting a three-minute process to get a quote and to sign up. It also introduced differentiating features that could be activated through their mobile app—for example, CoverPause allows customers to reduce premiums for days they were not driving. Pineapple, which offers comprehensive personal insurance cover, has pioneered a decentralized digital and scalable model based on peer-to-peer lending. Among other innovations, its model allows customers to upload pictures of items they want to insure on a per-item basis, and image recognition is used to provide a quote within 60 seconds.

The COVID-19 pandemic has accelerated this trend, by driving demand for digital and remote channels, and we expect this to continue beyond the crisis. It is likely that online and mobile banking usage in several African countries will show a net increase of between 20 and 40 percent postcrisis and that the use of mobile payments will significantly increase, especially in those regions where mobile use is currently below average

Accelerating growth through competition, innovation, and disruption

Competition among players has already led to significant innovation and disruption in the African insurance market, with insurers leveraging technology to target specific segments or services and cut costs. Innovative partnerships between insurers and online platforms are also becoming more commonplace. We expect this trend to accelerate. In some instances, African countries may even leapfrog more developed markets.

In East Africa, for example, Blue Wave in Kenya is servicing the mass market, making microinsurance products accessible via mobile phone. Founded in 2019 with $300 thousand in seed funding, Blue Wave generates revenue by collecting administration fees from every subscriber and a commission from each premium. The company partners with insurers and aggregators such as mobile network operators, as well as banks and microfinance institutions, to sell its products.

It also leverages a mobile-based payments solution to reach customers. Solutions are offered in multiple languages, using simple terms, clear explanations, and avoid jargon to facilitate easy access.

In the meantime, Insurtech platforms such as Bismart, WazInsure and Kakbima are connecting customers to insurers, providing services such as quote comparisons, direct sales, and the tracking of policies and claims.

Five imperatives for insurance companies to succeed in Africa

Several African governments are strengthening regulatory and capital requirements of insurance companies to ensure their solvency and sustainability. This is expected to help create stronger and larger companies as well as boost job creation and capability building in the industry. Such reforms are also crucial to building consumer trust and public awareness, which lay the groundwork for governments to achieve a transformation agenda.

For example, countries in the West African Economic and Monetary Union (WAEMU) require the insurers of Conférence Interafricaine des Marchés d’Assurances (CIMA) to maintain a minimum capital requirement of 3 billion CFA francs ($5.5 million) for mutual companies (up from 800 million) and 5 billion CFA francs ($9.1 million) for limited-liability insurance companies (up from one billion).

Similarly, the National Insurance Commission (NAICOM), which regulates the industry in Nigeria, increased the minimum capital requirement for all insurance and reinsurance firms in May 2019; for composite insurers, the capital requirement increased from NGN 5 billion ($13.1 million) to NGN 18 billion ($47.3 million). The goal of these reforms is to strengthen the sector and enable the emergence of more solid market players. But it came with a lot of controversy and the end it was botched even as Commission looked at Risked Base Capital.

InTunisia, a new insurance code has been implemented to give the General Insurance Committee (CGA) greater public authority, ensuring better governance of insurance companies and modernizing the legal framework for life insurance, among other imperatives.

To meet these new capital requirements, a consolidation of smaller players is expected, especially in markets for nonlife insurance, which remain very local and fragmented. Fragmentation is still seen in many larger markets too. For example, the top five nonlife players in Kenya and Nigeria account for 38 percent and 39 percent of the market, respectively. Foreign players also may be attracted into the market to capitalize on the strong growth opportunities available, as these policies open the door for mergers and acquisitions.

Ensuring long-term growth prospects through Pan-Africanization

In the past six years, established insurers have tended to diversify across the continent. And expansion is likely to continue with further investment in Africa. While regional players will possibly benefit from greater integration as a result of expansion, for international players such as Sanlam, Allianz, Old Mutual, and AXA, the primary goal is to capture long-term growth. Sanlam, for example, has, through the purchase of Saham, gained a foothold in more than half of all African countries, and a top five position in six markets outside of South Africa, while Allianz has made acquisitions in Morocco, Nigeria, and, more recently, Kenya. French multinational AXA has a presence in nine African countries, while Old Mutual has a presence in 13 African markets.

Five imperatives for insurance companies to succeed in Africa

These trends highlight that Africa is an attractive growth prospect for both regional insurers and multinationals looking to enter the market. Nevertheless, the continent is not without its hazards and challenges. Five strategic considerations can help guide insurance companies on their journey to success.

Choose expansion countries wisely, focusing on cities

Because of wide variations between African countries, as measured by industry maturity and competitive intensity, and culture and language, a targeted approach to market entry is essential. In line with economic growth, most African countries have experienced double-digit GWP growth over the past five years, although the levels of competitiveness, using the market share of the top five players as a proxy, in each country varies.. Projected statistics show that GDP per capita will differ widely between countries and that growth will be largely concentrated in major cities.4 By 2025, Cairo is projected to account for 37 percent of total GDP in Egypt, and Nairobi will account for 27 percent of Kenyan GDP.5 It therefore makes sense for insurers to focus on specific growth geographies with faster-growing, less concentrated markets offering maximal opportunity.

Insurers that have adopted targeted expansions have been able to reap significant rewards, which has given rise to pan-African insurance companies with considerable reach and size. Their success signals two things: first, that the African insurance market is poised for growth; and second, that expansion can be strengthened through strategic acquisitions of existing companies in target regions.

Target unique customer segments, needs, and the power of partnerships

Insurance companies can drive innovation across products and channels to meet unmet needs and reach unserved customers. Partnering effectively can be a vital factor here.

For example, MicroEnsure, a company based in several African countries, operates on a partner-centric business model, collaborating with upwards of 70 insurance companies, 13 telecom partners, and approximately 90 financial-services providers and microfinance institutions to make insurance accessible to low-income clients and gain access to large existing client bases. About 85 percent of their clients have never had an insurance product before.

ACRE Africa focuses on distributing microinsurance products throughout the agricultural value chain. Operating in multiple countries, it has an extensive agent network to distribute products and provide farmer education. It partners with a mobile money-agency network to facilitate payments and works with several financial institutions to facilitate access to microinsurance products.

Already, ACRE covers about 1.7 million farmers in East Africa. Some of its innovative products include mobile-based weather-index insurance, hybrid-index and multiperil crop insurance, livestock cover, and a replanting guarantee.

In addition to innovating across products and channels, companies can develop an ecosystem approach through partnerships, as traditional industry borders continue to fall away. Some companies are rapidly building interconnected sets of services to secure customer stickiness and offer real synergies.

Partneringallows carriers to offset their lack of capabilities, such as the ability to offer health technology, for example. In a given ecosystem, insurers can play roles of either orchestration—a prime example is Discovery, which uses partnerships to integrate noninsurance services into the insurer’s realm—or participation, where insurers can participate in an ecosystem orchestrated by others.

Focus on digital-enablement of the agent to increase reach and productivity

The COVID-19 crisis means that digital-first for customers and intermediaries is no longer a choice but a necessity. Lockdowns and working from home have accelerated digital adoption and shifted expectations in the next normal, and interactions that are not digital or digitally enabled will no longer gain traction. As a result, leading players are moving quite aggressively on direct and digital, while boosting agent productivity through better tooling and customer self-service.

In addition, an expansion of mobile wallets, payment infrastructure, and enabling regulation of payment service banks and institutions in the past three years, particularly in West and North Africa, is expected to facilitate premium and claims payments.

Having digital as a core element of their strategy is key for insurers; however, the approach to digitization needs to be end to end, including back-office process automation for servicing and claims, as cost pressures mount and customers demand faster, real-time responses.

Collaborate with governments and regulatory bodies to help shape and reform the agenda

Regulatory reform has proved to be a strong enabler of deeper insurance penetration, and many countries in Africa are already seeing the benefits of new regulations. There is significant scope for insurers to collaborate with regulators on issues such as social security, solvency, and compliance requirements as well as around tax benefits of life savings and pension products. Insurers also have an important role to play in helping regulators understand and accept new underwriting models and data-driven outputs to speed up regulatory innovation, improve efficiencies, and give a broader set of consumers access to insurance products

Africa is set to see a larger working-age population than either China or India by 2034. To harness this potential, insurers will need to build the capabilities of frontline workers, including agents, brokers, and intermediaries and create robust processes to grow talent from within. There is also significant scope to harness the power of inclusion particularly women’s advancement.

The COVID-19 crisis has mainstreamed flexible working and working from home, opening up new avenues for talent acquisition. Having a structured approach to matching talent to roles that create value and effectively scanning the market for opportunities could yield a leapfrog opportunity in addressing scarce talent gaps at this time. Additionally, changing valuations may present opportunities for acquiring scarce skills through the acquisition of tech companies that were previously out of reach.

The global pandemic has created uncertainty and economic pressure across the continent, but the fundamentals for insurance growth remain solid. Now is the time to think more deeply about refining a strategic approach that leverages partnerships and is selective about which geographies to target while driving innovation across products and channels, expanding services, and upskilling the workforce.

Assisted by these choices, insurers will be strongly positioned to take advantage of the vast and under-penetrated African markets, helping to unlock greater security for consumers and contributing to social and economic security on the continent

365 days: Sunday Olorundare Thomas’ leadership like no other

By Favour Nnabugwu

The leadership is about inspiring people to do what they have never done or things that were hitherto impossible for them to do.

That is the stairs of the Commissioner For Insurance, Mr Sunday Olorundare Thomas, what he has been able to achieve in 365days, no one of his presdessessors were able to get to that level.

Thomas without boasting about his feats while recalling his One Year Experience On The Driving Seat”‘ relayed the various achievements of the Commission in the past one year.

The CFI also unveiled a 5-Point Strategic Plan (2021-2020) that will drive insurance business and deepen its penetration in Nigeria. According to him, “The Commission has been able to achieve stability in the insurance industry with evidence in the enhanced role the sector continues to play in the nation’s economy”

He disclosed that N9.2bn was set aside as group life premium for 2021-2022 cover for federal civil servants and paramilitary while the level of insurance participation in pension matters received boost. Joint guidelines was issued by the Commission and National Pension Commission (PenCom). The pension reach for insurers was achieved by the joint action of NAICOM and PenCom.

The oil and gas sector is critical to insurance industry  “There is a guideline in the works that will seal the leakages which hitherto made it difficult for the local content to make a mark for Nigerian participation. He assured that the law on Nigerian content will receive a boost from the guidelines, which no doubt will increase insurance” participation in this area.

“We also know that with the engagement we have had with the Nigerian context, there is going to be an increase in the oil and gas business. As I speak now, we have a committee working on the guideline to enforce the law in the Nigerian context. All the leakages we have had hitherto will be blocked”

On the need to expand the market . Thomas said two Takaful insurance companies have been licensed in addition to the existing two. Adding that the Commission is conscious of the fact that insurance sector is knowledge based while informed that there is on going development of more actuarial analysts capacity in the industry as the first step of having more qualified actuaries in the country.

“We know that the drivers of the economy are those at the lower levels of the pyramid and so we are taking financial inclusion very seriously. It is now a national policy. For the insurance sector we are far behind but we are doing a lot of catching up. To this effect, 4 micro-insurance companies have been licenced and an additional 2 are on the verge of being licenced”

Insurance as technology driven business, achieved a feat during the period under review. The Commission successfully completed the first phase of its portal. The portal started nine years ago, but until last year, nothing was happening. Today, the functioning portal is already up and running.

“The traditional method of distributing insurance is becoming outdated and inadequate to achieve the speed and the people we want to reach and we must begin to develop other channels. there are few of them that have been developed that are waiting for final touches before being released”.

In an attempt to increase insurance penetration in the country as well as increase government participation in insurance business, the Commission is currently engaging state governments to draw them closer and bring the gospel of insurance to their door steps. In the last one year, some states governors have been visited by the Commission.

The CFI said the need to think outside the box is essential if insurance industry in this country should move further,  “The traditional method of distributing insurance is out dated. So, the Commission is exploring other channels and will soon develop modern and effective channels, “We must begin to develop other channels. There are few of the channels that have been developed. We are waiting for final touches for them to be released”.

Ensuring the safety and protection of the sector, Thomas said that corporate governance become effective in the industry, from June 1, 2021.

In a bid to improve human capacity development, plans are almost completed to set up an academy in the risk bearing industry. Already, the Commission has acquired a property for it and is currently being worked on adding, “we are believing by the end of the third quarter or beginning of the fourth quarter 2021, NAICOM Academy will take off”.

The Commission is set to grow life and non-life insurance businesses as never before, Thomas emphasized. As part of this, NAICOM is exploring ways of attempting to enhance insurance development and growth through the operators’ participation in policy formation.

In the next two months, NAICOM will be ready to implement Risk Based Supervision policy, according to the Commissioner who said that “the relevant persons have been trained, the necessary skills acquired and the instrument that will enable the implementation, have been developed. Risk Based Supervision policy is a system in which the supervising authority, NAICOM will allocate time and resources to companies based on the level of risk inherent to their balance sheets.

On the enforcement of compulsory insurance, the Commissioner stated that NAICOM has embarked on various engagement measures across the country. Aside visiting state governments to solicit for their support, NAICOM is also working in collaboration with the Federal Road Safety Corps, Federal ministry of transportation, Federal Fire Service, among others.

South African woman gives birth to 10 babies – 7 boys, 3 girls

By admin



A South African woman has reportedly given birth to 10 babies at once, breaking a world record set just last month.

37-year-old Gosiame Thamara Sithole, already a mom of six-year-old twins, initially thought she was going to have eight kids. However, when she gave birth on Monday, June 7, she was surprised when 10 babies emerged, her husband, Teboho Tsotetsi, told the Pretoria News.

She gave birth by Caesarean section at a Pretoria hospital.
Husband Tsotetsi told Pretoria News: “It’s seven boys and three girls.

“I am happy. I am emotional. I can’t talk much. Let’s talk again in the morning please.”
Tsotetsi — who is unemployed — said that he “felt like one of God’s chosen children” even when he thought he was about to welcome eight kids.

Sithole, from Ekurhuleni, said that her pregnancy was natural and that she had not received fertility treatment, which has been linked to other multiple-baby births.

Sithole’s delivery of 10 babies at once would make it the first known birth of decuplets.

The previous record was claimed by Halima Cisse, who reportedly gave birth to nine kids — nonuplets — in Malia last month, May 2021.

A spokesperson for Guinness World Records listing told The Post Tuesday, June 8: “Guinness World Records is aware of the news that Gosiame Thamara Sithole has given birth to decuplets, and we send our congratulations and best wishes to the family.