All Posts in "Month: June 2021"

Rail transportation generates N5.79bn in 2020, Q1 2021

By Favour Nnabugwu

 

 

Rail transportation in Nigeria generated N5.79 billion between 2019 and Quarter One of 2021 (Q1, 2021), the National Bureau of Statistics (NBS) has said.

It said this in the “Rail Transportation Data for Q1 2019 – Q1 2021” obtained from its website on Thursday in Abuja, adding that the revenue was generated from passengers, goods/cargo and other incomes.

Giving a breakdown, it said N918.62 million was generated as revenue in the first quarter of 2021 (Q1, 2021) as against N481.57 million generated in Q4, 2020.

Also, revenue generated from passengers in Q1 2021 was put at N892.46, while N398.99 was generated from passengers in Q4 2020, the report said.

It added that revenue generated from goods/cargo in Q1 2021 was put at N26.19 as against N82.57 in Q4 2020.

In 2019, N2.412 billion was generated from passengers, while in 2020, N1.745 billion was generated and in Q1, 2021, N892.46 million was derived.

For goods/cargo, in 2019, N362.88 million was generated; in 2020, the sector derived N281.35 million and in Q1 2021, N26.19 million had been generated.

However, for other receipts, N64.57 million was derived in 2019, N5.18 million in 2020 and N8.062 million in Q1, 2021.

The bureau said that rail transportation data for Q1 2021 reflected that 424,460 passengers travelled via the rail system in Q1 2021 as against 647,055 passengers recorded in Q1 2020 and 134,817 in Q4 2020.

It said that this represented a -34.40 per cent decline year-on-year (YoY) and +214.84 per cent growth quarter-on quarter (QoQ) respectively.

“Similarly, a total of 10,511 tons of volume of goods/cargo travelled via the rail system in Q1 2021 as against 18,484 that used the system in Q1 2020 and 35,736 in Q4 2020 representing -43.13 per cent decline YoY and -70.59 per cent decline QoQ respectively.”

The report said that data for the summation was provided by the Nigerian Railway Corporation (NRC), verified and validated by the NBS.

Patoma Admin by — June 25, 2021 in Transportation 0
Niger Insurance settles N1.15 bn claims between 2020/2021

By Favour Nnabugwu

 

Despite the recent situation of Niger Insurance, the company is coming out of the woods as it has paid N1.15billion claim between 2020 and now

Aside all hands on deck to revive Niger Insurance, the company is equally working on liquidating some of it’s real estate assets to further alleviate the plight of its policyholers.

The Managing Director of Niger Insurance Plc, Mr. Edwin Igbiti, promised that his firm will not relent in meeting customers’ expectations.

Igbiti is optimistic that the company will rise again while he put the claim paid to policyholders between 2020 and now to reach N1.15billion.

According to him, “in addition to meeting commitment to our policyholders, we have created customer engagement forum to address customers’ complaints, which has been very effective in addressing concerns and enquires, especially, in the present status of the company and management initiatives.

“Our traction and achieved milestones were also communicated at various conferences and media parley held by the company.”

Niger Insurance, he promised, remains responsible and committed corporate organisation, while assuring the insuring public and all stakeholders that it will ensure all obligations especially, in the area of claims payments are met to the extent of its established liabilities and provision of insurance practices.

Patoma Admin by — June 24, 2021 in Insurance 0
R- The Commissioner for Insurance, Mr Sunday Olorundare Thomas at the 24th Nigerian Insurers Association investiture of the chairman, Mr. Ganiyu Musa in Lagos

Caption:

The 24th investiture of the Chairman of Nigerian Insurers Association, NIA, in Lagos.

1.   R – The Commissioner for Insurance, Mr Sunday Olorundare Thomas greeting an operator at the 24th NIA investiture in Lagos.

 

2.  R – Group Managing Director, Mr. Lawrence Nazare of Continental Reinsurance Plc; Regional Director, Anglophone West Africa, Mr. Ogadi Onwuaaduegbo; Chief Financial Officer, Mrs Jane Mberia at the investiture of the Nigerian Insurers Association, Mr Ganiyu Musa at the event.

    Patoma Admin by — June 24, 2021 in Insurance 0
    Swiss Re cuts stake in Phoenix Group to 6.6%

    By admin

     

    Swiss Re acquired a stake in the company last year through the sale of its ReAssure Group plc subsidiary to Phoenix but has not cut stske to 6.percent

    The sale was completed through an accelerated bookbuilding process and was done in the context of a regular review and rebalancing of Swiss Re’s investment portfolio and is consistent with the group’s overall investment strategy.

    Swiss Re states that Phoenix agreed to Swiss Re completing this transaction prior to expiry on July 23rd 2021 of the lock-up arrangement agreed between the pair.

    The sale of an approximately 6.6 percent holding by Swiss Re is expected to close on June 25th, 2021.

    According to the reinsurer, this transaction will result in a low single-digit increase in the Group’s Swiss Solvency Test ratio, while the impact of the deal on Swiss Re’s US GAAP earnings is expected to be insignificant.

    Once the deal closes, Swiss Re’s remaining stake in Phoenix will be roughly 6.6 percent of the firm’s total issued share capital. Regarding these shares, Swiss Re has agreed to a lock-up arrangement of 90 days following closing, subject to waiver, as is customary for such a trade.

    Additionally, now that Swiss Re’s holding in Phoenix has dipped below 10 percent, the relationship agreement ceases to be effective and Swiss Re is no longer entitled to appoint a non-executive director to the Phoenix Board.

    Consequently, Swiss Re has informed that its nominated representative, Christopher Minter, will step down from the Phoenix Board with effect from settlement of the shares sold by Swiss Re.

    Nicholas Lyons, Phoenix Chairman, commented: “On behalf of the Board, I would like to thank both Christopher for the significant contribution he has made since joining the Board in July 2020 and Swiss Re for its support during its time as a significant strategic shareholder.”

    As part of last year’s deal, Swiss Re transferred shares representing roughly 14.5 percent of the enlarged share capital of Phoenix to MS&AD Insurance Group Holdings, ReAssure’s minority shareholder.

    Phoenix notes that MS&AD, whose lock-up period also expires in July 2021, continues to retain a 14.5 percent stake in Phoenix and is committed to its strategic relationship.

    Commenting on the sale of some of Swiss Re’s stake in Phoenix, Moody’s Investors Service analyst, Dominic Simpson, said: “Swiss Re has halved its shareholding in Phoenix Group to 6.6 percent, equivalent to £437 million, which we view as credit positive in that it will reduce Swiss Re’s asset concentration and have a small positive impact on it solvency.”

    Patoma Admin by — June 24, 2021 in Insurance 0
    Untold story of Boeing 737 MAX

    By Favour Nnabugwu

    The two clashes of Boeing 736 MAX between five months, between October 2018 and March 2019, Boeing 737 MAX, was what revealed the truth about manufacturer’s defect on the model gave it away

    Following both crashes, all 737 MAX in operation, that is, 371 aircrafts, were grounded while thousands of flights were cancelled by airliners. Moreover, Boeing was compelled to suspend delivery of new aircrafts and to slow-down production of the 737 MAX. It was later obliged to set aside $5.6 billion to compensate losses sustained by its customers.

    A further difficulty is the discovery made in October 2019 regarding cracks to the pickle fork of next Generation Boeing 737  Consequently, fifty defective devices were grounded.

    By late September 2019, Boeing losses would amount to $8bn a figure that does not include the compensation fees disbursed to the victims’ relatives, the fines levied, settlement of disputes and delayed deliveries. It is noteworthy that the aeronautic giant proposed the disbursement of $144, 500 to each family of the 346 victims of both crashes.

    Another setback to be added is when experts placed Boeing below standards in terms of protection Bagainst cyber risks.  Security failures were noted at the level of its construction sites, its networks and software. These failures are real menace for the clients as well as for civilian and military aircrafts.

    Pickle fork: part that connects the wings to the fuselage.

    Interruption of production of Boeing 737 MAX

    Boeingg crisis worsened following the announcement made on January 1, 2020, to shutdown the production of 737 MAX for an undetermined period. The cost pertaining to the maintenance and storage of the grounded aircrafts since March 13, 2019 has considerably impacted the accounts of the manufacturer.

    In view of the lack of parking and maintenance area, priority goes to the delivery of the stored aircrafts and not to their manufacture.

    Historic losses for Boeing

    The crisis of the Boeing 737 MAX has heavily affected the 2019 balance crisis accounts of the American manufacturer. For the first time since 1997, Boeing sustained a net loss. The latter amounted to $636m in 2019 versus $10.1 bn in profits in 2018. With an order backlog of 5400 aircrafts, Boeing’s Commercial Aircraft Division has reported an operational loss worth $6.6 bn versus $8bn profits one year earlier.

    Following the injection of $9.2 bn earmarked to address the compensation of the airliners affected by the grounding of aircrafts and delivery delays, Boeing’s bill is now amounting to $18.4 bn

    Patoma Admin by — June 24, 2021 in Aviation 0
    Sunu announces resignation of CFO, Company Secretary from Sept 7

    By Favour Nnabugwu

     

    Sunu Assurances Nigeria Plc has announced the resignation of its Chief Financial Officer, Mr Akeem Adamson and Company Secretary, Head of Legal and Chief Compliance Officer, Mr John Akujieze from the service of the company both effective 7th September 2021.

    The announcement in a notification to the Nigerian Stock Exchange signed by Samuel Ogbodu, Managing Director/CEO on Wednesday said the resignations were presented and had been accepted by the board of directors.

    Akeem Adamson is a graduate of Mechanical Engineering from University of Ilorin.  He proceeded to sit for his ICAN qualification examinations and qualified in 1997. He became a Fellow of the institute in 2007. He is also an Associate of Chartered Institute of Taxation of Nigeria (CITN).

    He started his working career with Onward Paper Mills as Trainee Engineer in 1990 and thereafter, Volkswagen of Nigeria.

    As a Chartered Accountant, he joined Coopers & Lybrand International, now PriceWaterCoopers (PWC) in 1994 as Audit Trainee and rose to the position of Senior Auditor in 1998.

    He moved to BDO Oyediran, Faleye, Oke & Co (Chartered Accountants) as an Audit Supervisor from 1998 to 2000; Accat Nigeria Ltd as Financial Controller, 2000 – 2005; Intercontinental Wapic Insurance Plc as Head, Internal Audit, 2007-2009 and in 2011, he joined SUNU Assurances Nigeria Plc as AGM, Accounts.

    He has won many awards in the course of his career including MD Award at Intercontinental Wapic Insurance Plc and Coopers & Lybrand International Award. He was also the Best Graduating Student, Mechanical Engineering with First Class Degree and University Scholar, University of Ilorin.

    While Akujieze now an outgoing Group Company Secretary, Head Legal & Compliance of SUNU Assurances Nigeria Plc. He has oversight responsibilities in all the company’s subsidiaries and the parent company in the areas of company secretariat, legal, compliance and administration departments.

    Before joining SUNU Assurances Nigeria Plc in August 2014, Mr. Akujieze was the Group Head, Corporate Services & Resources in Associated Discount House Limited (Now Coronation Merchant Bank Limited) supervising the company secretariat, human resources, administration, protocol and legal. He spearheaded the transformation of the company from a discount house to a Merchant Bank with the raising of requisite capital and completion of all regulatory and legal requirements.

    As the Group Head, Corporate Services & Resources in Associated Discount House Limited, he coordinated the divestment of interest in two subsidiary Companies, resulting in transfer of assets/liabilities and the integration of staff of both Companies with the parent Company. He also developed and enthroned Standard Operating Procedure for the company and other subsidiaries to enhance effective administration of policies and processes.

    He had a brief stint with the National Maritime Authority during his compulsory National Youth Service Corps.

    Mr. Akujieze holds a Bachelor of Laws degree from Nnamdi Azikiwe University Awka with the best graduating result. He also holds a Master’s degree in Law and Business Administration from University of Lagos. He is an Associate of both Chartered Institute of Management and Chartered Institute of Arbitration.

    He is a member of the prestigious Apapa Club and Metropolitan Club.

     

    Meanwhile, the board had approved the appointment of Mr Theo Lyile acting capacity for CFO and Mrs Taiwo Kuku in acting capacity Company Secretary pending final resolution in this regard.

    Patoma Admin by — June 23, 2021 in Insurance 0
    AXA agrees with Generali over sale of Malaysian insurance operations for €140m

    By admin

     

     

    Global insurer AXA has reached an agreement with carrier Generali to sell its insurance operations in Malaysia for €140million.

    The agreement which includes its 49.99 percent holding in AXA Affin General Insurance (AAGI) and 49 percent holding in AXA Affin Life Insurance (AALI), for total cash proceeds of €140 million.

    Generali has agreed to purchase the majority of the shares held by AXA and Affin in the two joint ventures, approximately 53 percent of AAGI (49.99 percenybfrom AXA and 3 percent from Affin and minorities) and AALI (49% from AXA and 21 percent from Affin), respectively.

    Additionally, Generali has filed an application to the local regulator to try to acquire the remaining shares of MPI Generali Insurans Berhad (MPI General) held by its Malaysian joint venture partner, MPHB Capital.

    Generali has been active in the region since 2015, when it acquired a 49 percent stake in a P&C insurance subsidiary of Multi-Purpose Capital Holdings to create MPI General.

    In total, the consideration for these transactions is €262 million. The agreements are subject to the approval of the Malaysian Minister of Finance and the Central Bank of Malaysia.

    Following the transactions, Generali will operate in the country through two firms, one in the P&C arena and one in the Life sector.

    Generali notes that within P&C, it intends to merge the businesses of MPI Generali with AAGI. Once completed Generali will hold 70 percent in both the Life and P&C entities, which will trade under the Generali name. The remaining 30% shareholding will be held by Affin Bank.

    The transactions set to make Generali one of the leading insurers in the Malaysian marketplace, creating the number two P&C insurer by market share and entering the region’s life insurance market.

    The insurer will also enter into an exclusive bancassurance agreement with Affin Bank for the sale of conventional P&C and Life solutions.

    The acquisitions are expected to close in the second quarter of 2020, subject to closing conditions, including the receipt of regulatory approvals.

    Chief Executive Officer (CEO) International, Generali Group, Jaime Anchústegui Melgarejo said, “The transactions are fully aligned with Generali’s strategy to strengthen its leadership position in high potential markets, like Malaysia, which represents a very attractive opportunity as it is home to a growing middle-class population and with an insurance penetration rate that is still relatively low compared to other more mature markets in the Asian region.”

    Regional Officer, Generali Asia,  Rob Leonard said, “This is an exciting time for Generali in Malaysia and for our growth strategy in Asia. Over the last five years we have enjoyed working together with our business partner to reshape MPI Generali and now we can further optimise our strategic position, secure economies of scale for more efficient operations and deliver even greater value for our customers.

    “We have ambitions to further transform and strengthen our business in this important market and look forward to working with our customers, employees, agents, partners and distributors on this journey.

    Patoma Admin by — June 23, 2021 in Insurance 0
    Swiss Re targets $75m Vita Capital VI mortality cat bond

    By admin

     

     

    Global reinsurance company Swiss Re is back in the capital markets in search of protection for its life reinsurance business, with a new Vita Capital VI Limited (Series 2021-1) mortality catastrophe bond deal that aims to secure $75 million or more of extreme mortality protection.

    swiss-re-building-imageThis will be the eighth extreme mortality catastrophe bond issuance under Swiss Re’s series of Vita Capital deals.

    The reinsurance firm first sought mortality retrocessional reinsurance from the capital markets through a Vita Capital arrangement back in 2003.

    The last Vita Capital mortality cat bond was issued in 2015, a $100 million deal that provided Swiss Re with retro reinsurance against excess mortality events in Australia, Canada and the UK and that has now matured.

    But Swiss Re also added $80 million of extreme mortality protection into one of its Matterhorn Re series of catastrophe bonds last year, demonstrating its appetite to continue tapping the capital markets for mortality retrocession.

    According to our sources, this new Vita Capital mortality cat bond is particularly interesting as deaths due to COVID-19 are excluded for calendar year 2021 under the terms of the deal, but we’re told appear to be included and therefore covered for future years while the deal remains in-force.

    Vita Capital VI Limited, a Cayman Islands based special purpose vehicle, will issue a single tranche of Class B notes, currently targeting $75 million of protection for Swiss Re.

    The notes will be sold to investors and the proceeds used to collateralize a retro reinsurance arrangement between the special purpose issuance vehicle and Swiss Re itself.

    The transaction will provide Swiss Re with excess (or extreme) mortality retrocessional reinsurance protection, based on a mortality index trigger.

    As a result, the notes could be triggered by an extreme mortality event that raises the mortality index, which will be weighted by age and gender, above a predefined trigger point.

    Meaning that the investors in these notes will be at risk of an increase in age and gender-weighted mortality rates, exceeding a specified percentage of the predefined index across the covered areas.

    The covered areas are Australia, Canada, the UK and the United States, we’re told, which is an expansion on the last Vita Capital mortality cat bond from Swiss Re, which did not cover excess mortality in the US.

    We understand the mortality retro reinsurance protection will run from the beginning of 2021 to the end of 2025, with the notes maturity slated for early 2026, so providing five years of coverage.

    The $75 million of Series 2021-1 Class B notes to be issued by Vita Capital VI Ltd. are said to have an initial attachment probability of 1.06 percent, an initial exhaustion probability of 1.16 percent and an initial expected loss of 0.75 percent

    The notes are being marketed with a suggested coupon of 3 percent, were told.

    It’s particularly interesting that the notes are said to cover COVID-19 related deaths from 2022 onwards.

    With the vaccine program rollouts in the covered countries making rapid headway, the chances of a major excess mortality event from the current pandemic are certainly reducing quickly.

    But it will be interesting to see how investors respond to the transaction, as it could provide an example of how the capital markets can be tapped for pandemic reinsurance cover, including against COVID-19 related mortality.

    These excess or extreme mortality catastrophe bonds cover rising deaths from a wide range of events, including infectious diseases, pandemics, influenza, terrorism, wars, earthquakes and other risks that could cause a sharp increase in mortality rates in the covered countries.

    We’ll update you as this new Vita Capital VI Limited (Series 2021-1) transaction from Swiss Re comes to market and you can read about this and every other catastrophe bond issued in our Artemis Deal Directory.

    Patoma Admin by — June 23, 2021 in Insurance 0
    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.

    Patoma Admin by — June 22, 2021 in Insurance 0
    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.

    Patoma Admin by — June 22, 2021 in Insurance 0