Reinsurance prices to rise at Jan 2022, Fitch

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Reinsurance rate increases are expected to continue at the all-important January 2022 renewal season, but their amount is expected to be reduced to high single-digit to low double-digit levels, as rate adequacy may be approaching for major reinsurers, Fitch Ratings has said.

Reinsurance prices have been increasing for a number of years now and while catastrophe losses have been relatively high, plus the world’s major reinsurers have faced losses from the COVID-19 pandemic, now the market may be nearing more of an equilibrium, the rating agency believes.

Capacity remains abundant and this is not expected to change dramatically going forwards.

Capital providers are proving more cautious about flooding reinsurance with capacity and dampening rates this time around, which means that rate increases have been compounding and market conditions have proven much more attractive as a result.

This has provided a significant opportunity for growth, among the major reinsurance companies of the world and Fitch ratings reports that non-life reinsurance net premiums written grew by a substantial 18.5% in the first-half of 2021, as prices continued to rise and demand remained strong, while reinsurers took advantage of this to grow their books.

Price momentum has slowed though, Fitch explains, as we’ve now seen two years of rising pricing at the same time as capacity remaining abundant.

Helping to drive reinsurance pricing higher have been ongoing concerns related to deteriorating loss-cost trends, rising social inflation and litigation costs, as well as how the global economy would recover and how this might affect future underwriting results.

Still, so far pandemic losses remain only partially accounted for, Fitch Ratings believes, cautioning that, “Thus far, renewals have largely not taken into consideration pandemic-related losses but this could change in 2022 with improved clarity around the ultimate losses.”

If more significant pandemic related losses do emerge, they could become a longer-term driver for reinsurance rates perhaps. But right now, as this has yet to occur, Fitch believes reinsurance rates are set to moderate, perhaps significantly, over the next year.

“Rate increases are likely to continue at the January 2022 renewals, albeit at somewhat reduced high single-digit/low double-digit levels, as rate adequacy is approached,” Fitch explained.

One area that rates could rise faster though is in Europe, after the impacts of flooding and severe weather this summer.

Fitch warned that the July flooding in Europe could add $8 billion to second-half catastrophe losses in 2021.

Add on severe weather impacts from across Europe in June, July and also August and the regional insurance and reinsurance industry could easily be facing $12 billion of losses from the summer months, perhaps higher.

Throw in hurricane season impacts, with the peak of the Atlantic season still to come, as well as wildfire impacts, and there is a chance for reinsurance capital to face above average losses again in 2021.

That would be factored into renewals in 2022, with price rises very likely for January and possibly at the mid-year.

The Japanese renewals in April 2022 look a little less certain right now, as the country has largely escaped significant catastrophe losses so far, but typhoon season is also set to peak in the coming months.

What’s encouraging about Fitch’s comments is that the rating agency expects more reinsurance firming before rate adequacy is reached, for the major reinsurers.

Rate adequacy is not the same for everyone, as efficiency of capital, operations and how capacity is deployed can all be used as levers, meaning one underwriters rate adequacy can be another’s hard or firm market pricing.

This suggests more positive fundamentals to keep ILS rates and catastrophe bond pricing higher, or at the least stable through coming renewals.

It also suggests another chance for ILS capital, particularly in catastrophe bond form, to drive home efficiency advantages, especially in areas like global retrocession where there remain some constraints on capacity

Cameroonian insurance turnover drops by 0.6% in 2020

The Cameroonian insurance market has recorded a 0.6 percent drop in its turnover to 210.338 billion FCFA (393.85 million USD).

While non-life premiums have declined by 0.17 percent from 141.176 billion FCFA in 2019 to 140.933 billion FCFA (263.89 million USD) in 2020.

This regression follows the decrease in the underwritings of some non-life insurers such as PRO ASSUR Assurances (-24.17 percent), Saar Assurances (-18.57 percent), Saham Cameroon (-17.55 percent) and Allianz Cameroun (-13.91 percent).

Atlantique Assurance, for its part, has posted a turnover increase of 112.91 percent in 2020. In terms of turnover, this company occupies the ninth position in the 2020 ranking of non-life insurers.

With 69.405 billion FCFA (129.96 million USD) of written premiums in 2020, the life class of business is up by 2.31 percent

The ranking by life company makes Allianz Vie the leader of the life market with a turnover of 19.754 billion FCFA (36.99 million USD). The second and third places of the ranking are respectively occupied by Prudential and ACTIVA Vie with premiums of 15.07 billion FCFA (28.22 million USD) and 8.209 billion FCFA (15.37 million USD).

Zimbabwe insurers, reinsurers meet 92% capitalisation requirements

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Insurance and Pensions Commission, IPEC of Zimbabwe has assured that compliance with minimum capital requirements of insurers is 92 percent as at March 2021.

Head of IPEC, Ms Grace Muradzikwa, stated that generally, the insurance industry is adequately capitalised except for funeral assurers and life assurers whose capitalisation as at 30 June 2021 stood at 63 percent and 67 percent respectively.

Funeral assurers have remained undercapitalised with the compliance level slightly improving from 38% and 50% to 63% between December 2020, March 2021 and June 2021 respectively

The Commission is transitioning to a risk-based capital framework. In June this year, the Commission launched the Zimbabwe Integrated Capital and Risk Programme (ZICARP) Framework aligning the industry’s capitalisation with the risk profile of entities, which is an international best practice.

It is the Commission`s expectation that the ZICARP Project will address the issue of capitalisation in the sector.

Akponojivi & Elohor ties the knot in Jeddo, Delta State

The daughter of Late Mr Freedom and Mrs Rosemary Oghoghome, Engr. Akponojivi Sandra marries  Pastor Elohor Obesa Egha on Thursday, August 26th and Saturday, August 28th, 2021 respectively for both the traditional ceremony and white wedding in Jeddo, Okpe Local Government in Delta State

Pastor Elohor and Mrs Akponojivi Egha at the traditional marriage on Thursday
Mr and Mrs Elohor Egha at the Reception after the White Wedding on Saturday
7th edition of African Insurance Awards deadline Oct 1

By Favour Nnabugwu


African Reinsurance Corporation, Africa Re is organising the 7th edition of African Insurance Award

The nominations for the Award began on August 20, 2021 to to end on October 1, 2021 is a virtual Award ceremony will be announced in the Q4 2021.

Africa Re initiated these awards to foster best corporate management, leadership, governance as well as innovative and sustainable growth in the insurance sector in Africa.

The African Insurance Awards aim at: rewarding and celebrating leaders, best performers and achievers in the African insurance industry; identifying and stimulating distinctive innovations in the insurance sector in Africa; encouraging sustainable growth in insurance premium combined with business profitability; and providing added value by sharing progress and best practices in the development of insurance in Africa.

The awards, which started in 2015, target a range of participants, including African insurance companies and African insurance CEOs.

The key objective is to promote the development of insurance in Africa by honouring distinguished companies and leaders that have exceptionally raised standards of competence and achievement and demonstrated unprecedented leadership.

48 African countries,10 overseas nations, top govt officials ready for 47th AIO on Sept 4

By Favour Nnabugwu
With 354 members from 48 African countries and 16 members from 10 overseas countries and top government officials from Nigeria and others are set for the 47th African Insurance Organisation (AIO) conference and general assembly holding in Lagos six days from today.
The theme of 47th general assembly billed to hold from September 4 – 8, 2021 is: “Rebuilding Africa’s economy – The insurance perspective.” 
The theme paper will look at broader issues of how insurance can contribute to and benefit from the efforts at rebuilding the African economy post COVID. It is hope and indeed expectation that participants will find the presentations enriching and derive value from attending the conference.
Nigeria’s Commissioner for Insurance/CEO, National Insurance Commission (NAICOM), Mr Sunday Thomas had worked trelessly liaising with various ministries and agencies to ensure full support from the federal government and also the Honourable Minister of Finance, Budget and National Planning .
Thomas who believes that whatever is worth doing at all, is worth doing well, will not only bring top government officials to grace the event but garnered the required support from them to boost the industry at large.
The AIO conference LOC Chairman, Mrs. Ebelechukwu Nwachukwu stated, “hosting this conference is significant to us in more ways than one.
“Apart from the opportunity to showcase our rich culture and hospitality, it will also be a great opportunity to correct some of the misconceptions about Nigeria and her people.
“We have the opportunity to showcase Nigerian hospitality; we will have the opportunity to showcase the Nigerian rich cultural heritage; We have plans to take the delegates around Lagos and other places of interest where they can purchase items of interest such as artefacts and other made in Nigeria items; Hotels business will receive a boost as delegates are expected to stay in hotels during the conference.
“All these are going to contribute to economic activities in the country and for the fact that we are hosting at all, is really going to add value to our industry and gives us the opportunity to showcase that insurance is strong enough to support the economy.
AIO is a non-governmental organisation recognised by many African governments, including Cameroon which has signed a headquarters agreement with it and where it has set up its permanent secretariat.
AIO was established in 1972. The body has four categories of members comprising Insurance Industry; Regulatory/Supervisory authorities; Training Centers and National and Regional Associations.
The main objectives of AIO are the promotion of inter-African co-operation and development of a healthy insurance and reinsurance industry in Africa.More over, AIO organises the annual Conference and General Assembly, the annual African Reinsurance Forum as well as various meetings, seminars and workshops. However, the body rotates its events especially conference and seminars round its member countries depending on individual countries preparedness and readiness to host the AIO events.
South African Airways return to the skies September 23

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After almost a year with no flights and mothballed operations, South African Airways is ready to take off again. The airline has confirmed that it will resume flights on September 23rd, with bookings and travel credit redemptions open from September 6th.

SAA is back

The wait is finally over! South African Airways has announced a return to operations, with its first flights planned for September 23rd. Initial flights will connect Johannesburg and Cape Town with several other African countries, and will be open for bookings from September 6th.

The last 12 months have not been kind to South African Airways, as the airline went into the pandemic crisis already in a precarious financial position. The airline had been placed into administration in December 2019, and COVID only added to its woes. With the situation getting worse, the entire business was mothballed in September last year, and no flights have taken off since.

The airline exited business rescue at the end of April, with the groundwork laid for a return to operations. With the airline solvent and control handed back to the board and executive team, it was only a matter of time before the green light was given for a relaunch.

The airline says its initial flights will operate from Johannesburg to Cape Town, Accra, Kinshasa, Harare, Lusaka, and Maputo. It plans to restart more routes and expand its network as market conditions improve. Kgokolo added,

Everything falling into place

Since exiting business rescue, SAA’s team has been hard at work getting the airline ready to restart operations. Earlier this month, the airline reported having secured its Air Operator’s Certificate (AOC) for both domestic and international flights, as reported in

South African Airways Confirms Its Return To The Skies Next Month

Olatunde-Agbeja decries dearth of Aviation personnel, lack of Air Traffic Controller’s Liability (ATCL) insurance policy

CHAIRMAN Boff and Company, Insurance Brokers Limited, Mr. Babajide Olatunde-Agbeja has deprecated the lack of Insurance practitioners with technical knowledge to underwrite aviation policies in Nigeria

Olatunde-Agbeja stated that the industry still depends on the international market to provide technical assistance to assess aviation risk before placement.

This is just as he decried that there is no Air Traffic Controller’s Liability (ATCL) insurance policy in place for the aviation industry in Nigeria musing various scenarios that may call for the need of such.

He made these observations known at the CHINET Aviation and Cargo conference while giving a presentation titled Insurance and Aviation in Nigeria

He canvassed a need for insurance practitioners to specialize for improved technical knowledge and robust underwriting of aviation policies and while the situation in Nigeria to developed nations, he drew a sharp contrast.

Agbeja said,” In the more-developed economies, insurance personnel specialize and stay in a department all their working lives, thereby gaining enough experience to underwrite a specific policy type within a few years of working.

“In Nigeria, we are trained to know everything and move from one department to the other.  Therefore, it is difficult and highly improbable for one to master the operations of any one department. To date, we depend on the international market to provide us with technical assistance to assess a risk before placement.

“Recently, NAICOM attempted to increase the paid-up capital of insurance and reinsurance companies in Nigeria, but a recent court case temporarily stalled the implementation.  With the high level/volume of finance necessary to run an aviation company, it stands to reason that the best friend of aviators should be the insurance industry.

On the ATCL he said,” At my last check, I was amazed to find out that there is no Air Traffic Controller’s Liability (ATCL) insurance policy in place for the aviation industry in Nigeria. What happens if a traffic controller mistakenly directs two aircrafts into each other’s path?

“We’ve had many claims of this nature over time worldwide with a few in Nigeria. An ATCL policy is compulsory for any aviation industry involved in ATC no matter how small the volume of traffic is.

He canvassed for an ATCL insurance policy to be purchased immediately by the relevant parastatal in the aviation industry.

Agbeja also said that the country in the eyes of the international community is still regarded as a risk because of events of the past which has led many to still maintain the status quo and has kept insurance premium at a high.

He said,” While it is true that the present Government has been diverting a lot of resources to the transport sector lately, there was a lot of rot in the system in times past.  Much equipment is obsolete and ineffective, leading many to believe that our airspace is unsafe.

“In addition, there has been many aviation accidents/incidents in the past few years including near misses which fuels this notion of unsafe airspace.

While our aviation personnel are well trained, the opportunities to operate in a robust manner are few because the airlines are few, with a limited number of aircraft, so many of these personnel are unemployed or under employed. With continuous employment, experience is gained, and one operates better.

Swiss Re inks record $10m deal to fight climate change

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Swiss Re has signed the world’s first long-term purchase agreement for direct air capture and storage of carbon dioxide, worth $10 million over ten years, as part of its commitment to reach net-zero emissions in its own operations by 2030.

The global reinsurer has partnered with Climeworks, a specialist in carbon dioxide air capture technology, to combat climate change. The companies have also agreed to collaborate on developing risk management knowledge and risk transfer solutions, as well as to explore future investment and project finance opportunities.

The partnership gives Swiss Re early access to the new carbon removal risk pools and asset classes.

According to the company, the technological carbon removal solution offered by Climeworks in Iceland filters carbon dioxide (CO2) from ambient air using geothermal energy – considered to be the safest and most durable form of all carbon removal solutions that are commercially available today.

Swiss Re stated that the length of the term of ten years and the total value of $10 million are so far unmatched in the voluntary market for this type of high-quality carbon removal.

Swiss Re Institute’s recent report on the insurance rationale for carbon removal solutions revealed that the insurance sector is uniquely positioned to offer support on three fronts: through long-term purchase agreements, providing insurance capacity for evolving risk pools, and investments in new asset classes.

Swiss Re has committed to achieving net-zero emissions in its insurance and investment business by 2050, and in its own operations by 2030.

Swiss Re’s group chief executive officer and co-chair of the World Economic Forum’s Alliance of CEO Climate Leaders, said: “To mitigate the risks of climate change, the world needs to scale-up carbon removal on top of, not instead of emission reductions. By partnering with Climeworks we can play to our strengths in this endeavour, as a risk taker, investor, and forward-looking buyer of climate solutions.”

Christoph Gebald, co-CEO and co-founder of Climeworks, said: “We are very proud to have established the basis for a unique long-term partnership with the leading risk knowledge company Swiss Re. This is a decisive milestone for the scale-up of Climeworks and the direct air capture industry.”

Swiss Re, Climeworks, Purchase Agreement, Partnership, Climate Change, Insurance, Reinsurance, Christian Mumenthaler, Christoph Gebald, Switzerland

AIB goes digital on accident investigations

By Favour Nnabugwu


Nigeria Accident Investigation Bureau, AIB-N saidi it is set to change how final report of accident investigations is presented to the public to read.

The Chief Executive Officer of the AIB-N, Engr. Akin Olateru, explained that the initiative is ongoing ‘Industry Engagement on the review of Accident Reports’ event in Abuja

Engineer Olateru said AIB has improved the conventional air accident and incident reporting system as stipulated in the Annex 13 of the International Civil Aviation Organisation (ICAO) recommendations, to a digitalized reporting system, which no country in the world has attained as far as accidents and incidents investigation and prevention reporting is concerned.

He said : “The fact is the world standard, which is ICAO, has a format of reporting the final reports that is hundred pages presented to the world and on website. What we are trying to do is to challenge the status quo, to actually find a better way of getting this to the public. Today, how many people are reading reports (accidents and incidents).

” You have this report about 300 pages of what happened, safety recommendations and so on. What we are trying to do is to digitalise in a graphic way with a data base of the same reports. We are going to be doing that very soon, to make it easier for the airlines to read, for anybody of interest to go to a particular section rather than flipping through pages of documents. If it is on human factors, you just click on the graphic and it will tell you everything on human factors”.

” If it is about engine, same thing applies. The whole essence is about simplifying the way we communicate with the rest of the world in terms of our by-product and it has been discussed at the highest level at ICAO and it’s being accepted. By the time we are done, Nigeria will be the first in the world that would come up with this format. That is what I mean by Nigeria will lead the world very soon in terms of accident investigation reporting system.”

” Looking at it critically, for any institution to progress and remain relevant, you need to invest in Research and Development, you need to have a feedback system to evaluate, re-evaluate how you do things; check your process and procedures and come up with a better way of doing things or a simplified way of doing things to enhance productivity and that is what we are doing in AIB.”

On when the project will kick-off, Olateru said AIB is presently at the procurement stage and that it will be up before the end of 2021. “We are going through our procurement stage, we should be ready before the end of the year that would come up stage.”

The AIB Commissioner revealed that the new initiative will be trademarked. He said: “When we are done, because we are making a lot of investment on this, Saudi Arabia has shown interest and partnering with us on this project because it is a great project that would change the world in terms of Annex 13 of Accident investigation.”

‘We will have a platform whereby airlines, stakeholders will subscribe; you have access to it to train your pilots, engineers and stakeholders in the industry. The press too can have access to it to update their information or satisfy their enquiries. There would be a norminal fee. In a way, AIB want to use this as an opportunity to drive internally generated revenue”, he added.