IFRS 17 to cost Nigeria, 50 other countries $20bn

By Favour Nnabugwu


Ahead January 1, 2023, International Financial Reporting Standard (IFRS) 17 implementation, Nigeria and 50 other countries are to spend $20 billion for the global insurance industry.

The IFRS 17 implementation, which was issued by the International Accounting Standards Board, according to a survey by Willis Towers Watson (WTW), revealed that global insurance and reinsurance brokers recently polled 312 carriers from 50 countries ahead of the January 1st, 2023 IFRS 17 effective date.

While estimated costs vary significantly by insurer size, the overall global industry estimate of the cost of delivering IFRS 17 is $15 billion and $20 billion.

Additionally, WTW’s survey suggested that the average programme cost for the largest 24 multinationals stands at between $175 million to $200 million each.

Kamran Foroughi, Global IFRS 17 Advisory Leader at WTW, said: “This is an extraordinary figure that will naturally lead to many questions from boards and investors.

“For many, significant improvements will also be required in business processes and finance operations to deliver IFRS 17 efficiently and link with other metrics. With smart investment and the right people, an insurer’s IFRS 17 programme has the potential to help deliver long-term yearly savings to show against the daunting up-front costs.”

According to WTW, results from the survey also showed that issues relating to people, data, systems and processes are among the main challenges for carriers as they look to successfully implement IFRS 17.

Other findings from the comprehensive IFRS 17 survey include: Over 10,000 full-time equivalent employees will be required to deliver IFRS 17.

This presents major challenges for insurers’ recruitment and retention strategies, both within and beyond their IFRS 17 programs. Only 52 per cent of survey respondents believe that IFRS 17 earnings/equity will be slightly or much more helpful than current GAAP earnings/equity and 54 per cent believe that the need for non-GAAP reporting will either slightly or significantly increase.

Only 6 per cent of companies in 2020 had a good understanding of the business implications of IFRS 17 – this has now improved to 17 per cent. Insurers believe that the impact on a majority of KPIs is likely to be small. KPIs which are believed to be affected are related to measuring profit, new business, and return on capital/equity.

Large multinationals have made more progress on a scale from 0 to 5 (average: 3.5) than the remaining insurers (average: 2.6), with progress highest in EMEA (average: 2.9) lowest in APAC (average: 2.4). Nevertheless, much work remains and companies need to consider how best to ensure the benefits of the IFRS 17 programme.

“Strong doubts remain about whether IFRS 17 will lead to a more useful metric than current GAAP/IFRS standards. This is particularly true in more mature markets, where we do not see an improved KPI benefit commensurate with the costs, and insurers are actively planning new supplementary reporting to help explain business performance,” said Foroughi.

The Commissioner for Insurance, Mr. Sunday Thomas, at the inauguration in Lagos informed the group made up of the National Insurance Commission (NAICOM) staff, underwriters and experts from KPMG, said their assignment was to support the Commission in providing technical advice on the adoption of IFRS 17 Insurance Contract and IFRS interpretations on insurance-specific matters and their application within Nigeria.

Linkage Assurance eyes N700.8m profit for Q3 2021

By Favour Nnabugwu


Linkage Assurance Plc has released its earnings forecast for the third quarter for the period ending 30 September 2021 with gross premium written N2.070 billion.

The company projected a profit after tax of N700.838 million.

Cash/bank balance at end of the quarter is projected to rise to N3.634 billion from N3.593 billion at the beginning.

Earlier reports suggested that Linkage Assurance’s audited 2020 financial results with gross premium written rising by 28% to N8.3 billion from N6.5 billion in 2019 while profit after tax rose by 65% to N2.4 billion from N1.5 billion in 2019.

Enugu-Cameroon highway $430m ready before end of 2021 – AfDB

By Favour Nnabugwu


The African Development Bank (AfDB) has stated that the $430 million highway connecting the South East region of Nigeria from Enugu to Bamenda, in South West Cameroon will be finished before the end of the year.

This was made known by the Bank’s President, Akinwunmi Adesina at the 59th Ordinary Session of the ECOWAS Authority of Heads of State and Government in Ghana, citing that the project was part of its $16 billion worth of projects in West Africa alone.

He added that the Enugu-Cameroon highway would improve trade in West Africa, as it is also currently rounding up feasibility studies for an Abidjan-Lagos corridor by the end of 2021.

Risk management Key to future recovery – Karekezi

By Favour Nnabugwu


The Group Managing Director of Africa Reinsurance Corporation, Africa Re, Dr. Corneille Karekezi says covering a vast region split into many different situations and contexts hardening market.

Dr. Karekezi says that, as a region overall, rates have been fairly stable in the past year but with pockets where rates have been on the rise.

He points to certain lines in South Africa where rates have risen, alongside toughening terms and conditions.

Elsewherehe says, the hardening rates can be linked to losses, such as industrial losses in Nairobi and in parts of west Africa thath have led to changes in those select markets.

It is not just rates and terms and conditions under scrutiny in 2021, however. he says most regions have introduced Covid-19 exclusions and clarified wordings on infectious and communicable diseases.

“These exclusions have been expected,” leaving few insurers surprised by the actions taken by reinsurers and the international markets.

“The exclusions are now akin to war and nuclear risks,” he says, while another area of concern has been cyber liabilities, where the risks have risen dramatically during the pandemic and subsequent switch to working from home.

He admits the international market “has been gentler with us, with increases targeting some lines of business and some individual treaties and not as a global increase”.

Dr. Karekezi says the combined ratio has actually improved since 2019 results, and now that the Covid-19 exposure has been managed through exclusions, he does not anticipate any further declines. Investment income in the past year has also performed well and Mr Karekezi says the international markets have reacted positively to the results.

In 2021, it has been very much business as usual for Africa Re, which showed a return of 5.7% last year. The drop in income last year was offset by a reduction in reserves, says Dr. Karekezi.

African insurers, he says, are now looking to governments and multilateral institutions to support local economies as they bounce back from Covid-19 shutdowns. It has been a case of so far so good for the major African currencies, but Mr Karekezi hopes governments will act to stabilise any major drops in value.

It has not been entirely smooth sailing, however, and in 2020 the market did see a few challenging claims. However, Mr Karekezi is confident that problems have been ironed out and he is optimistic that the market is functioning well and settling valid claims promptly this year.

“Last year it was a struggle at times because of the lockdowns and not having the right people in the office or available at the right time. The worst period for most firms was from March to May 2020, but the industry has put that behind us now. The fact is we are managing claims adequately,” he says.

Those lockdowns actually worked positively in some ways, says Dr. Karekezi, as people bonded together to help clients and provide a good service. He believes the bonds between insurer, brokers and clients were strengthened in many areas.

He acknowledged that there are always outliers for example, some large corporate risks have been harder to place.

And there is the heightened cyber risk that corporates have had to face. Dr. Karekezi says: “The use of iPads etc did increase the risks, but it is something that many people have been able to manage.”

The other major challenge for much of Africa will be the impact of the pandemic on the economy. Mr Karekezi fears that tourism-dependent economies such as Mauritius, South Africa and Morocco have had a “serious hit” and it will depend on how the rest of the world reacts to support those countries.

“It will depend on liquidity in the US economy to revive and stimulate economies,” he believes, pointing to possible moratoriums on debt repayments as one way to stabilise African economies.

“African governments do not have the same flexibility in terms of supporting their economies as the more advanced economies. If Africa has to spend 7% of GDP on stimulus packages, there will be a big gap in the finances,” explains Mr Karekezi.

He adds that much will also depend on the vaccine rollout programme, which has been moving very slowly across Africa. Most observers think it unlikely that 40% of Africa’s population can be vaccinated this year, but that would make a huge difference to the sustainability of Africa’s economies and its businesses if it could be achieved, says Mr Karekezi.

The big lesson for Africa’s reinsurers in the wake of the pandemic will have been the need to improve their risk management framework and their culture, he says.

Underwriting and attention to detail on wordings will be improved, he predicts, and there will be greater clarity for insurers and their insureds. Reinsurers will also put in place greater business continuity and mitigation plans. “All the things needed to fuel solvency and build resilience,” says Mr Karekezi. “These are lessons that are obvious and welcome.”

However, he is mindful that the continent faces plenty of other challenges. “Climate change will impact Africa heavily, but there has been a shift. The political attitude has changed at least in the narrative. However, there is a question as to whether Africa has the means to make improvements.

“Some countries are making big efforts to build their resilience such as Morocco, where you can see the efforts to increase insurance access for individual business and communities, particularly for agriculture, pensions and also loss of income protection.

“It is a big issue that governments must take from Covid-19 and do more in terms of risk management. There is not much being done at the moment because the priorities lie elsewhere, but risk management is something that will come in due course as markets emerge from the pandemic, but more importantly as governments mature,” he concludes.

Qatar Airways expands routes Zambia, Zimbabwe from August 6

By Favour Nnabugwu



Qatar Airways is continuing its expansion in Africa with a new route launching to Lusaka, Zambia and Harare, Zimbabwe on August 6th.

The flag carrier of Qatar is excited to connect passengers to the two cities while meeting increasing cargo demand with the move.


The airline’s widebodies will be flying on what will become the firm’s fifth and sixth new African destinations launched since the beginning of the global health crisis. Amid this launch, Qatar Airways is set to transport plenty of goods with a total of 30 tonnes of cargo capacity per service. This operation will form part of a wider shipping network between worldwide center points in the likes of the United Kingdom, Germany, China, and the United States

Qatar Airways Group CEO, Al Baker took a moment to share how valuable routes in Africa are to his company. Overall. The airline has been expanding well across the continent, now conducting over 100 weekly flights to 27 destinations here.

“Africa continues to be an area of strong growth for Qatar Airways and launching this service will support the development of the economy and tourism sector in both countries,” Al Baker shared in a statement.

“Not only do we continue to rebuild our network after the pandemic, but we are actively expanding it with the addition of these two key destinations. These are the fifth and sixth new destinations in Africa added to our network since the start of the pandemic, taking our total new destinations added across the globe to 10.”

Qatar Airways 787-8

Qatar Airways has been determined to keep flight activity going despite the challenges of the pandemic. Photo: Getty Images
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Ramping up

The thrice-weekly flights will operate each Wednesday, Friday, and Sunday. Flight QR1455 will leave Doha at 02:20 to land in Lusaka at 08:50. The 787 will then depart the capital of Zambia at 10:20 to arrive at neighboring Harare at 11:20.

QR1456 will depart from the capital of Zimbabwe at 18:55 to land in Lusaka at 19:55. The jet will then leave Zambia at 21:25 to arrive back in Qatar at 05:55 the next day. All times are local.

Qatar Airways 787-8

The likes of Emirates, Ethiopian Airlines, and Kenya Airways all have fifth freedom rights on Lusaka to Harare routes – perhaps Qatar Airways could join with this approach. Photo: Getty Images

This announcement follows the Emirates’ update that it will be resuming flights to South Africa and Nigeria this Wednesday. Africa is undoubtedly an important area of business for Middle Eastern carriers, and they have long been in the race to increase operations in the continent.

All eyes on Africa

Qatar Airways sees massive potential in the African aviation scene. Abuja, Accra, and Luanda were all added to the carrier’s network last year, while Abidjan joined last week. Even closer to home, flights to Cairo and Alexandria have returned, following the easing of tensions between Qatar and Egypt.

Zimbabwe, Somaliland, South Sudan, Zambia, and the Democratic Republic of Congo are all countries on the airline’s radar, with the company presently partnering well with the likes of Air Côte d’Ivoire to reach corners that it doesn’t currently serve. Altogether, the operator is keen to scale up partnerships while increasing its own presence across the land.

Three of the top ten-non African airlines flying to sub-Saharan Africa are from the Middle East. Emirates, Qatar Airways, and Turkish Airlines hold over 11 million round-trip seats between them this year
Notably, there are promising recovery prospects for African aviation. Nearly 60% of the continent’s population hasn’t reached the age of 25 yet, and the number of people is expected to double by around 2050.

Moreover, several groups are part of a growing middle class that has been well-tuned to global trade and trends. Therefore, it’s not a surprise that Qatar Airways is eager to grow in Africa. Not only are there plenty of tourism opportunities, but there are also grand prospects when it comes to long-term commerce.

World’s top 20 insurance brokers earned $117.7bn in 2020

By Favour Nnabugwu


The world’s top 20 broking groups as measured by total insurance broking revenues in 2020 accounted for a combined 52.3 percent of fees and commissions earned in 2020

The total fees and commissions earned from insurance broking activity were worth about $117.7bn.

Of this, Insuramire said about $55.1bn was from commercial P&C insurance retail broking, $11.2bn from private P&C insurance retail broking, $37.6bn from employee benefits plus life and health insurance retail broking, $5.3bn from reinsurance broking, and $8.4bn from wholesale insurance broking.

Insuramore said the global pandemic had much less of an impact on insurance broking groups than it did on enterprises in some other industries.

It said that discounting inflation, growth in global broking revenues during the year is thought to have been between about 3% and 5 percent, with reinsurance and wholesale insurance broking plus both commercial and private P&C insurance retail broking tending to fare better than broking and administration of employee benefits.

An acceleration in M&A activity among broking groups was a feature of 2020, and the pandemic had the effect of encouraging such activity rather than diminishing it, with many hundreds of transactions concluded globally, said Insuramore.

The firm said further consolidation among insurance broking groups is taking place during 2021 but the sector will remain a comparatively fragmented one.

“Ordered alphabetically, Arthur J Gallagher, Aon, Marsh & McLennan and Willis Towers Watson are the four largest groups in commercial P&C insurance retail broking and employee benefits plus life and health insurance retail broking, and are also four of the five largest in reinsurance broking.

However, Amwins, Ryan Specialty Group and Truist Insurance Holdings are among the foremost competitors in wholesale insurance broking, with Confie (in the process of merging with Alliant) followed by HUB and AA Insurance Services likely to be the top three in private P&C insurance retail broking,” said Insuramore.

Nigeria Customs Service lay ledge hammer on unverified private jets

By Favour Nnabugwu


Nigeria Customs Service ,NCS, has threatened to impound unverified private jets in the country by July 6, 2021.

Customs said if jets owners fail to present relevant import clearance documents for verification within the stipulated 30 day period then they will be impounded.

This was disclosed by the NCS spokesman, Mr. Joseph Attah at a press briefing in Abuja yesterday. According to Attah, if any private jet owners fails to present relevant import clearance documents for verification within the stipulated 30 day period, the jet will be impounded by the federal government until the owner comes up with the relevant documents.

According to the Customs Spokesman, “The required documents for verification ” are aircraft certificate of registration, Nigerian Civil Aviation Authority’s (NCAA) flight operations compliance certificate, NCAA’s maintenance compliance certificate, NCAA’S permit for non- commercial flights and temporary import permit where applicable “.

Attah said : “Within two weeks into the 30 days verification period, only six owners of private aircraft have responded to the invitation, necessitating this update and reminder to those who have not responded, to do so in order to avoid possible detention of their aircraft.

“ We also know that some brought their private jets under a temporary import certificate, which has expired and not renewed. These are infractions.’

“At the end of the verification, some of the things we want to expose will come to light. We will make our findings known on July 6 after the expiration of the 30-day grace window.

“Those in default risk detention of their aircraft as nobody is above the law,” he added.

He also revealed that the NCS believes that owners of private aircraft are highly placed individuals who would be willing to comply with extant laws governing the importation of the aircraft they own; including payments of all appropriate duties and taxes.

“As an agency of government responsible for enforcement of laws governing imports and exports in Nigeria, NCS will not hesitate to invoke appropriate sanctions on any defaulting private aircraft owner immediately after the expiration of the verification period on Tuesday 6th July 2021.

“For the avoidance of doubt, private aircraft owners or their representatives are to report to Room 305, Tariff and Trade Departments, Nigeria Customs Service headquarters, Abuja, from 10 am to 5 pm between Monday, June 7 and Tuesday, July 6, 2021”, Attah added.

Cyber industry loss ratio at record-high 67% in 2020 – Aon

By admin


US cyber market shows that the overall industry loss ratio jumped up by 22.0 percentage points last year to reach a record high of 67.0 percent.

A reinsurance broker Aon, attributed that increase primarily the growing severity of ransomware claims, which included heightened incident response costs and extortion demands.

Aon’s US Cyber Market Update found that both the Standalone and Package segments saw their highest loss ratios since data collection began in 2015, with Standalone cyber policies recording a 25.7 percentage point increase (from 47.1 percent to 72.8 percent), and Package policies a 16.4 percentage point increase (from 42.3 percent to 58.6 percent).

The 2020 loss ratio increase appears to be primarily due to an increase in claim severity, as the average claim size rose more than 50 percent from $48,709 in 2019 to $74,354 in 2020.

However, claim frequency remained steady over 2020, averaging 5.62 claims per 1,000 policies, compared with 5.61 claims in 2019.

Additionally, Aon reported that US cyber insurance direct written premiums totalled $2.74 billion in 2020 – an increase of 21 percent over the $2.26 billion recorded in 2019 across both Standalone and Package products.

This also means that premiums have more than double over a five-year period, given that 2016 premiums totalled just $1.35 billion.

Meanwhile, cyber rates increased by 2.5 percent on average during 2020, which Aon sees as corresponding to period of time prior to insurers taking significant steps to address ransomware trends, including rate increases and underwriting actions later in 2020 and early 2021.

“Last year we said that we believe the next several years will be the proving ground for the cyber insurance thesis – that by putting a price on risk, insurers will help improve cybersecurity hygiene and reduce the cost of cyberattacks,” said Jon Laux, Aon’s Head of Cyber Analytics for Reinsurance Solutions.

“This remains true,” he added. “Insurers are pursuing many interesting tactics to address the claims environment, even as we see new developments opening in the threat environment. It’s a fascinating time in the industry. Stay tuned.”

Aon’s report also took note of the continued development of the small commercial cyber segment, where both growth rates and loss ratios outperformed the rest of the industry.

“Although many have remarked on the impact of ransomware attacks on small businesses in 2020, the segment still ran at a lower loss ratio than the industry as a whole,” analysts said. “Understandably, insurers have found small businesses to be an attractive segment.”

Loss ratios for the small commercial cohort averaged about 54.6 percent in 2020, while frequency for these insurers was 25 percent lower than industry averages, and severity was 26 percent lower as well.


Lufthansa opens lounges to passengers from other airlines for €150

By Favour Nnabugwu


Lufthansa has opened it lounges to passengers from other airlines that will have to pay for the privilege of using the lounges, with the airline’s most exclusive lounges clocking in at €149 ($177).

Lufthansa allows passengers of any airline to use its lounges. This sees the airline opening the doors to its lounges around the world.

Airline lounges are typically limited to those who are flying in the airline’s premium cabins or those with frequent flyer status. However, around the world, many airports have pay-per-use lounges, with schemes like Priority Pass offering membership plans for such lounges.

In what is perhaps a bid to explore additional revenue streams, Lufthansa is selling access to its lounges around the world.

Varying lounge prices

Lufthansa’s lounges were designed with the airline’s frequent and premium flyers in mind. As spotted by One Mile At A Time, the airline has begun selling access to the lounge for those not eligible. This could be for one-time Lufthansa economy fliers or even Ryanair passengers. According to the airline’s lounge booking portal,

“Access to the lounge is restricted to the date on the booking confirmation and demands a valid boarding pass for the same day from any airline.”

It seems as though any lounge operated by Lufthansa is included in the offering. The cheapest lounge appears to be Lufthansa Business Lounge in Newark Liberty International, priced at just $29 (€24). Most airports have just one lounge on offer. This is not the case at the airline’s Frankfurt stronghold, where a total of six lounges are on offer,

Lufthansa Business Lounge A26; LufthansaBusiness Lounge A13; Lufthansa Lounge A; Lufthansa Lounge Z; Lufthansa Lounge B and Lufthansa First Class Lounge A13

In Frankfurt, each of the lounges is priced at €39 ($46), except for the first class lounge, priced at €149.