All Posts in "Day: September 6, 2021"

Climate risk to drive property premiums and cat losses much higher, Swiss Re

By admin

 

 

Global reinsurance company Swiss Re expects that property and casualty (P&C) insurance premiums will grow considerably over the next two decades, with a near doubling expected. Climate risk will be a major driver of this, resulting in a significant boost to new property P&C premiums written, but also to expected insured natural catastrophe losses.

Overall, the P&C insurance risk pool is expected to increase by around two times, to roughly US $4.3 trillion of premiums by 2040.

But, of note to reinsurance and insurance-linked securities (ILS) markets, the global P&C risk pool is expected to become riskier and more complex at the same time, Swiss Re explained in its latest sigma report that was released today.

Emerging markets will rise fastest, resulting in a gain in share, from 20% of P&C risk pool premiums in 2020 to 33 percent in 2040.

Climate change and climate risk is going to be one of the biggest drivers of insured property premiums in the P&C space, with property expected to be one of the biggest drivers of growth in global insurance and reinsurance markets over the coming years.

Climate change and climate risk is expected to add $183 billion of new P&C premiums globally by 2040, according to Dr. Jérôme Haegeli, Group Chief Economist of Swiss Re, who was speaking at a launch event for the sigma report today.

Today, some roughly 25 percent of P&C insurance premiums are related to property lines of business, but by 2040 this is expected to rise to 29 percent of the overall P&C risk pool premiums.

That equates to an expectation that property insurance premiums could almost triple by 2040, adding some $1.3tn more in premiums by that stage.

Haegeli said that economic growth is the main driver, explaining about two-thirds of this increase in premiums.

Specifically on the climate risk front, Swiss Re expects the property risk pool to increase in size by 30% to 40% on the back of rising climate exposures.

The result of this is an expectation that insured catastrophe losses will rise significantly, with Swiss Re estimating that weather related insured catastrophe losses will increase by between 30% to 63% in key advanced markets by 2040.

The main drivers are expected to be floods, tropical cyclones and perils like wildfires.

While the increase of up 63% is significant, it is expected to be even bigger for some key insurance and reinsurance markets, with locations like Germany, China, France and UK expected to see a 90% to 120% increase in insured catastrophe losses by 2040.

climate-risk-insured-catastrophe-losses

All of this will translate into significant opportunity for those able to create and structure relevant insurance and reinsurance products to provide cover to property as climate risks increase.

While there will also be a growing need for risk capital to underpin this, suggesting more opportunity for the reinsurance and insurance-linked securities (ILS) markets.

Swiss Re highlighted the, “Increasing need for reinsurance due to more severe catastrophe losses,” but also highlighted the increasing uncertainty in losses, in particular from so-called secondary perils.

This means risk-adjusted price adequacy is going to be critical as the property premium risk pool is enlarged by climate change related risks.

The P&C insurance and reinsurance industry is going to find its premium base increasingly driven towards more complex risks, in the property and liability space, while lower volatility drivers of the past, such as motor, will be less of a contributor.

Over time, if climate risks continue to escalate, property could become the biggest component of the P&C insurance and reinsurance risk pool, suggesting ongoing need to innovate in provision of efficient risk capital that can support this rapid expansion.

Jerome Haegeli, Swiss Re’s Group Chief Economist, commented “Promoting the conditions for long-term sustainable growth is particularly important in the face of climate change, which poses the biggest long-term threat to the global economy. If we are to build a sustainable insurance system that allows society to manage and absorb future risks, we need to make risks and opportunities quantifiable. Our work is also vital for policy makers with whom we share the aim of making economic growth insurable.”

Gianfranco Lot, Head Globals Reinsurance at Swiss Re, added, “With the global portfolio shifting from lower risk motor insurance to higher risk lines, P&C insurance business will become more volatile. At the same time, risk modelling will become more complex, which will lead to higher capital requirements and an increased demand for reinsurance. In this fundamentally different risk environment, reinsurers will play a crucial role in keeping risks insurable.“

Patoma Admin by — September 6, 2021 in Insurance 0
Faces at opening ceremony of ongoing 47th AIO in Lagos

CAPTION

 

At the ongoing 47th African Insurance Organisation in Lagos

L – Mr Ganiyu Musa, Chairman of Nigerian Insurers Association/ Managing Director of Cornerstone Insurance; Ms Prisca Soares, former Secretary-General of African Insurance Organisation, Commissioner for Insurance) Chief Executive Officer of National Insurance Commission, Naicom, Mr Sunday Olorundare Thomas, Mr Tope Smart, Vice-President of AIO/ Managing Director of NEM Insurance; AIO Secretary-General, Ntukamazina Jean Baptiste and Mrs Ebelechukwu Nwachukwu, Chairman, Local Organising Committee during the opening ceremony in Lagos today

Other insurance professionals in attendance
    Patoma Admin by — September 6, 2021 in Insurance 0
    President Buhari beckons on insurance to grow non-oil sector

    By Favour Nnabugwu

     

     

     

    Nigeria’s President Muhammadu Buhari has beckoned on  Insurance firms in Nigeria to take advantage of ongoing efforts by the Federal Government to grow non-oil sector of the economy

    Speaking virtually at the opening ceremony of the 47th African Insurance Organisation (AIO) Conference and Annual General Assembly, the President said the Insurance sector will play a vital role in the diversification of the economy by bringing “necessary stability, economic sustainability, revenue generation, job creation and financial inclusiveness.

    “There is a great future for the Insurance industry in Africa. We only need to put the right mechanism in place for it to thrive. I assure you that this administration has and will continue to support Insurance growth in Nigeria and Africa at large.

    “I commend the leadership of the AIO for the resilience, foresight and perseverance in ensuring that the African Insurance market strives to meet its expectations in the global market notwithstanding the prevailing challenges,” he said.

    President Buhari said the theme of the conference, “Rebuilding Africa’s Economy: An Insurance Perspective”, was apt and well thought out to respond to the reality of the moment as many governments try to devise ingenious ways to manage their economy in the aftermath of the COVID-19 pandemic.

    “The pandemic has indeed changed many perspectives that have forced leaders across the globe to think hard for remedies.

    “I want to assure you that we in Nigeria are doing everything humanly possible to ensure coordinated approach to the pandemic and reaching out to other African leaders on possible best options to fully revive the African economy in which I strongly believe the Insurance industry has a vital role to play,” he added.

    The President noted that the COVID-19 pandemic presented a global challenge which led to lockdown of many countries, travel restrictions, and issuance of many health protocols, affecting all human, social and economic interactions that made hosting of the Conference impossible in 2020.

    “COVID-19 is still a serious challenge in many countries across the globe. However, adequate protocols have been put in place to curb its spread and vaccination is in progress.

    “We understand as a government and nation the need to frontally tackle some of the disruptions to our social, economic and health occasioned by the pandemic by putting in place sufficient measures that allow the system to function.

    “I once again use this opportunity to commend the Nigerian Insurance industry for identifying with the government through the provision of life insurance set of packages for frontline medical and paramedical personnel in the course of this fight. Your support and solidarity in these times are highly appreciated,” he added.

    President Buhari thanked the Organizing Committee for successfully putting the conference together, adding that the subtopics listed for discussions were germane and critical in helping Nigeria and Africa rebuild.

    “We are aware that the AIO’s Conference and Annual General Meeting is rotated amongst member states in order to provide a forum for exchange of information and strategies on market development while promoting regional knowledge and integration.

    “We received the news of the decision of the Executive Committee of the AIO granting Nigeria the hosting rights of this 47th edition of the AIO Conference with pleasure. As a country, we are confident in our ability to deliver the best conference ever in year 2020 before the outbreak of COVID-19 pandemic,’’ President Buhari affirmed.

    In her remarks, the Minister of Finance, Budget and National Planning, Mrs Zainab Shamsuna Ahmed, said the foresight of the founders of the AIO deserved commendation as it had fostered African integration agenda and how best to collectively address shortcomings.

    The Minister urged the Insurance sector to design their products around the needs of society, especially for low income earners, noting that greater impact on development would only be possible by looking at the African peculiarity.

    The President of AIO, Mrs Delphine Traore, who is also the Chief Operations Officer, Alliance Africa, said the conference was last held in Nigeria in year 2000, assuring that innovation in the sector would help in complementing government efforts in development

    Patoma Admin by — September 6, 2021 in Insurance 0
    Weather disasters drive US $ 3.64 trillion in losses in 50 years: WMO data

    By admin

     

    The high costs of weather disasters around the globe is truly laid bare by the latest data from the World Meteorological Organization (WMO), which estimates that weather, climate and water related disasters drove some US$ 3.64 trillion in losses over the last 50 years.

    payments-money-cash-ils-reinsuranceThe WMO’s latest Atlas of Mortality and Economic Losses from Weather, Climate and Water Extremes covers the period from 1970 to 2019, during which over 2 million lives were lost to these disasters.

    That is from more than 11,000 reported disasters recorded, and during the period the research found that weather, climate and water hazards accounted for 50 percent of all disasters, 45 percent of all reported deaths and 74 percent of all reported economic losses, while more than 91 percent of these deaths occurred in developing countries.

    Droughts (650 000 deaths), storms (577 232 deaths), floods (58 700 deaths) and extreme temperature (55 736 deaths) drove the highest human impact over the 50 year period.

    While, on an economic basis, the most costly events were storms (US$ 521 billion) and floods (US$ 115 billion).

    The 50 year period has seen a significant change in trends, of both incidence of disaster and the impacts from them.

    The number of disasters has increased by a factor of five over the 50-year period, driven by climate change, more extreme weather and improved reporting, the WMO believes.

    But positively, thanks to improved early warning systems and disaster management, the number of deaths decreased almost three-fold over the period.

    Death tolls fell from over 50,000 deaths in the 1970s to less than 20,000 in the 2010s.

    Looking at deaths per day, in the 1970s and 1980s it averaged 170, but by the 1990s, that average fell by one third to 90 related deaths per day, then continued to fall in the 2010s to 40 related deaths per day.

    On the economic side, losses have increased sevenfold from the 1970s to the 2010s.

    Reported losses from 2010–2019 (US$ 383 million per day on average over the decade) were seven times the amount reported from 1970–1979 (US$ 49 million), the WMO noted.

    Storms have been the most prevalent driver of damage and costs, resulting in the largest economic losses around the globe.

    It’s also noteworthy that storms are the only peril for which the attributed portion is continually increasing.

    “The number of weather, climate and water extremes are increasing and will become more frequent and severe in many parts of the world as a result of climate change,” explained WMO Secretary-General Prof. Petteri Taalas.

    “That means more heatwaves, drought and forest fires such as those we have observed recently in Europe and North America. We have more water vapor in the atmosphere, which is exacerbating extreme rainfall and deadly flooding. The warming of the oceans has affected the frequency and area of existence of the most intense tropical storms,” he comments.

    “Economic losses are mounting as exposure increases. But, behind the stark statistics, lies a message of hope. Improved multi-hazard early warning systems have led to a significant reduction in mortality. Quite simply, we are better than ever before at saving lives,” Prof. Taalas said.

    “More lives are being saved thanks to early warning systems but it is also true that the number of people exposed to disaster risk is increasing due tåo population growth in hazard-exposed areas and the growing intensity and frequency of weather events. More international cooperation is needed to tackle the chronic problem of huge numbers of people being displaced each year by floods, storms and drought. We need greater investment in comprehensive disaster risk management ensuring that climate change adaptation is integrated in national and local disaster risk reduction strategies,” added Mami Mizutori, Special Representative of the Secretary-General for Disaster Risk Reduction and Head of UNDRR.

    “The overlap of the COVID-19 pandemic with many other natural and manmade hazards, especially extreme weather events during the last 18 months demonstrates the need for greater investment in disaster risk reduction and a multi-hazard approach to disaster risk management and early warning systems to reduce risks and strengthen preparedness for multiple disaster scenarios,” she continued.

    The costliest disasters are all hurricane related and affected the United States, with Katrina leading the way at an estimated economic cost of $163.61 billion.

    It’s notable that hurricanes Harvey, Irma and Maria from 2017 all feature in the top-ten disaster economic losses as well, along with Sandy and Andrew.

    The stunning total figures of US $3.64 trillion of economic losses from weather, climate and water disasters over a 50 year period really drive home the important role of insurance and reinsurance.

    A larger percentage of this figure needs to be covered by insurance and reinsurance capital to enable greater resilience and more rapid recovery when these types of disasters strike.

    Hurricane Ida and the damage caused by Ida’s remnants is another prime example of the important role of insurance and reinsurance in protecting society against weather-related disaster costs.

    Patoma Admin by — September 6, 2021 in Insurance 0
    Nigerian pension fund asset rises to N12.8 trillion as RSA contributors hits 9.4 million

    By Favour Nnabugwu

     

    The pension asset value rose by N123.47 billion in July 2021 to close at N12.78 trillion compared to N12.66 trillion recorded in the previous month.

    This is contained in the pension funds industry report for the review month as released by the National Pension Commission.

    According to the report, the net asset value of Nigeria’s pensions fund recorded a 0.98% increase in the month of July 2021, while 22,349 RSA registrations were recorded in the same month increasing total contributors to 9.4 million.

    A cursory look at the data, reveals pension asset value has gained N474.49 billion between January and July of the year. In the same vein, 189,765 more contributors have been registered into the scheme, year-to-date.

    Pension Fund managers in Nigeria have been recording stellar performances in their various portfolios year-to-date, owing to their systematic investments, so as to edge other competitors in the industry. Recall, that the competition in the industry has grown significantly since contributors can now easily transfer from one administrator to another.

    A recent analysis by Nairametrics shows 70% of the 22 PFAs recorded positive growth across their four retirement savings account funds (RSA I – IV), with Stanbic IBTC, Veritas Glanvills and APT Pension leading the list of best-performing PFAs between January and July 2021.

    While the growth in the number of RSA registration seems to be increasing in a linear form, it is still very small compared to Nigeria’s labour force or working population. In context, Nigeria’s labour force data as released by the National Bureau of Statistics (NBS), shows that 30.57 million and 15.92 million Nigerians are fully and underemployed respectively.

    Simple computation of the total 46.5 million employed Nigerian indicates that only 20% of the working population is currently captured in the Nigerian pension fund scheme. This is significantly low for a country that boasts of being the largest economy on the continent.

    Meanwhile, South Africa’s Government Employees Pension Fund (GEPF) with a lesser population boasts of Africa’s largest pension fund with over 1.2 million active members and assets in excess of R1.61 trillion (N46.3 trillion).

     

    Patoma Admin by — September 6, 2021 in Pension 0
    South African life insurers pay more than US$3.3bn in death claims in 12 months to March

    By admin

     

     

    Death claims statistics released by the Association for Savings and Investment South Africa (ASISA) show that 1.02m death claims were lodged between 1 April 2020 and 31 March 2021.

    Mr Hennie de Villiers, deputy chair of the ASISA Life and Risk Board Committee, says the tragedy is that this represents an increase of 309,733 death claims compared to the statistics for the previous 12 months when 713,350 claims were received.
    The beneficiaries of the policyholders who died in the 12 months to the end of March 2021 would have received death benefits of ZAR47.58bn ($3.3bn) across all lines of risk business. This represents a 64% increase in the value of claims paid by life insurers when compared to the previous 12 month period when ZAR29.08bn was paid.

    The statistics reflect claims made against individual life, group life (offered by employers), credit life and funeral cover policies.

    Mr de Villiers, referring to the statistics, said, “These are staggering numbers and there is no doubt that COVID-19 has caused many of these additional deaths, whether directly as a result of a person contracting the virus or because people were reluctant to seek medical attention for other serious conditions. The hard lockdown conditions, curfews and alcohol bans would have reduced violent and accidental deaths.”

    He says that the significance of the ZAR47.58bn in death benefits paid by life insurers in the 12 months to the end of March 2021 becomes evident when considered against the ZAR60bn paid by the government’s COVID-19 Temporary Employee/Employer Relief Scheme (TERS) to furloughed workers from inception in March last year to July 2021.

    Mr de Villiers says that the biggest jump in the value of benefits paid was noted in the individual life space where life insurers reported a 70% increase. In the 12 months to the end of March 2021, life insurers paid ZAR29.11bn to the beneficiaries of individual life policies, compared to ZAR17.12bn in the previous 12-month period.

    He notes that the highest increase in the number of death claims took place in the funeral insurance space where the number of claims recorded increased by 216,705 in the 12 months to the end of March 2021.

    He states that despite the significant increase in claims paid as a result of the COVID-19 pandemic, the life insurance industry remains resilient and able to support its policyholders and their beneficiaries throughout this difficult time and beyond.

    The beneficiaries of the policyholders who died in the 12 months to the end of March 2021 would have received death benefits of ZAR47.58bn ($3.3bn) across all lines of risk business. This represents a 64% increase in the value of claims paid by life insurers when compared to the previous 12 month period when ZAR29.08bn was paid.

    The statistics reflect claims made against individual life, group life (offered by employers), credit life and funeral cover policies.

    Mr de Villiers, referring to the statistics, said, “These are staggering numbers and there is no doubt that COVID-19 has caused many of these additional deaths, whether directly as a result of a person contracting the virus or because people were reluctant to seek medical attention for other serious conditions. The hard lockdown conditions, curfews and alcohol bans would have reduced violent and accidental deaths.”

    He says that the significance of the ZAR47.58bn in death benefits paid by life insurers in the 12 months to the end of March 2021 becomes evident when considered against the ZAR60bn paid by the government’s COVID-19 Temporary Employee/Employer Relief Scheme (TERS) to furloughed workers from inception in March last year to July 2021.

    Mr de Villiers says that the biggest jump in the value of benefits paid was noted in the individual life space where life insurers reported a 70% increase. In the 12 months to the end of March 2021, life insurers paid ZAR29.11bn to the beneficiaries of individual life policies, compared to ZAR17.12bn in the previous 12-month period.

    He notes that the highest increase in the number of death claims took place in the funeral insurance space where the number of claims recorded increased by 216,705 in the 12 months to the end of March 2021.

    He states that despite the significant increase in claims paid as a result of the COVID-19 pandemic, the life insurance industry remains resilient and able to support its policyholders and their beneficiaries throughout this difficult time and beyond.

    Patoma Admin by — September 6, 2021 in Insurance 0
    Morrocoan insurance record $3.15bn turnover as at June 2021

    By adnin

     

     

    The Supervisory Authority for Insurance and Social Welfare (ACAPS), Morrocoan insurance market has recorded a turnover of 28.169 billion MAD (3.15 billion USD) in the first half of 2021, which represents a 3.08percent increase compared to the 27.326 billion MAD (2.7 billion USD) recorded at the end of June 2020.

    With a 56.3bpercent market share, non-life premiums are progressing by 11 percent to reach 15.868 billion MAD (1.77 billion USD). The life activity is posting a 14.2 percent.  growth of its turnover with 12.301 billion MAD (1.37 billion USD). This class of business accounts for 43.7 percent of the total premiums underwritten in Morocco at the end of H1 2021

    Patoma Admin by — September 6, 2021 in Insurance 0
    Nigeria records N1.8 trn trade deficit in Q2’21-NBS *As foreign trade rises 23% to N12 trn

    By Favour Nnabugwu

     

    The National Bureau of Statistics, NBS, said the country  recorded a trade deficit of N1.8 trillion in the second quarter of the year (Q2’21).

    Also, the nation’s foreign trade rose by 23 percent to N12 trillion from N9.8 trillion in Q1’21.

    The bureau disclosed this today in its Foriegn Trade in Goods Statistics Report for Q2’21.

    The bureau said: “ During Q2’21, the total merchandise trade stood at N12.03 trillion representing 23 percent

    increase over the value (N9.8 trillion) recorded in Q1’21 and 88.7 percent increase compared to Q2’20.

    “This increase resulted from the sharp increase in export value during the quarter under review.

    According to NBS, the export component of this trade was valued at N5.08 trillion or 42 percent while the import was valued at N6.95 trillion or 58 percent while the trade balance stood at a deficit of N1.87 trillion.

    It said:“The crude oil which is the major component of export trade stood at N4.07 trillion or 80.3 per cent of total export. This further shows a sharp increase of 111 per cent in Crude oil value in Q2’21 compared to (N1.9 trillion) recorded in Q1’21 while the Non-crude oil export recorded N1 trillion or 20 per cent of total export trade during Q2’21.”

    On export, the bureau stated: “Export by section revealed that Mineral products accounted for N4.6 trillion or 91 per cent of total export trade. This was followed by vehicles, aircraft and parts; vessels etc N141.73 billion or 3.0 percent , vegetable products N92.80 billion or 1.8 per cent among others.

    “In terms of regional trade, Nigeria exported most products to Asia (N1.8 trillion or 36 per cent), Europe (N1.8 trillion or 36 per cent), America (N806.81billion or 16 per cent) and Africa (N584.11 billion or 12 per cent) while Oceania totaled N23.28 billion or 0.5 per cent..

    “During the quarter goods worth N363.3 billion was exported to ECOWAS.” NBS said that most goods were exported to India (N949.05 billion or 18.7 percent), Spain (N524.49 billion or 10 per cent), Canada (N355.60 billion or 7.0 per cent) and Netherlands (N298.29billion or 5.9 per cent) and United States (N256.63 billion or 5.1 per cent).

    On import the bureau said: “Imports by SITC revealed that machinery & transport equipment accounted for N2.5 trillion or

    36 per cent of total import trade. This was followed by chemicals & related products N1.3 trillion or 18 per cent , mineral fuel N1.1 trillion or 16 per cent, food and live animals N951.28 billion or 14 per cent andmanufactured goods N640.47 billion or 9.2 per cent among others..

    “Import trade classified by region showed Asia as the leading partner with a record of N3.5 trillion or 50 per cent.The next leading partner was Europe with N2.3 trillion or 33 per cent.

    “Others are America N869 billion or 13 per cent, Africa N248.8 billion or 4.0 per cent and Oceania N58 billion or 0.84 per cent.

    “Out of the value recorded for Africa, imports from ECOWAS countries accounted for N24.2 billion .”

    Patoma Admin by — September 6, 2021 in News 0
    Global marine premiums up 6% but IUMI cautious over longer-term recovery

    By admin

     

    Global marine premiums rose 6.1 percent last year to $30bn with underwriting results improving across all regions on the back of low claims, according to new figures from the International Union of Marine Insurance (IUMI).

    Unveiling the numbers at its annual conference in Seoul, South Korea, IUMI reported positive news for marine insurers in most insurance lines and geographic regions. It said this is the result of an increased premiums base, an “extraordinarily low” claims frequency during Covid-19 and a better-than-expected economic bounceback from the initial effects of the pandemic.

    Some 47.7 percent of the $30bn global marine premium last year came from Europe, 29.3 percent from Asia-Pacific, 9.3 percent from Latin America, 7.7 percentfrom North America and 6% from elsewhere.

    By line of business, cargo continued to represent the largest share with 57.2 percent followed by hull on 23.8 percent, offshore energy on 12.1 percent and marine liability on 6.8 percent

    Vice-chair of IUMI’s facts and figures committee, Astrid Seltmann, said: “We are reporting an increase in absolute premiums for 2020 in both the hull and cargo markets. These are derived as a combination of volume – trade, values, global fleet size – and rates per insured unit. It appears that the European market bottomed out in 2019 and is now strengthening again; and the Asian market continues to enjoy a year-on-year increase that began in 2016. We see this primarily as a market reaction to the depleted premium base experienced in preceding years.”

    She added that in general, cargo and hull underwriting results improved in 2019/2020 across all regions, largely due to the strengthened premium base coupled with very low claims.

    “This is a positive trend but as this recovery started from a very low base it is not yet clear if the current improvement will be sustained in future years to give more predictability for shipowners, cargo owners and insurers. The recent claims environment has been relatively benign, which needs to be seen in connection with reduced activity in some shipping segments in 2020 – cruise, container trades – as a reaction to Covid measures. With the economy recovering and shipping and offshore activity increasing, it can be expected that both claims frequency and severity will also rise again,” continued Ms Seltmann.

    IUMI’s figures show that global offshore energy premiums rose 8.6% last year to $3.6bn.

    IUMI said premium income mirrors the global oil price and believes that the bottom of the premium decrease cycle has been reached. “However, the oil price remains volatile and was impacted negatively in 2020 due to the pandemic. 2021 has seen an oil price rally but the effects of events such as Hurricane Ida are yet to be known,” it said.

    Claims in the offshore energy sector remain historically low, with 2020 likely to produce the lowest upstream claims this century, said IUMI.

    Global cargo premiums were up 5.9 percent in 2020 to $17.2bn, its numbers show.

    The Chinese market continues strong growth, with moderate growth in other regions. Exchange rate fluctuations impact most heavily on this sector, so comparisons with earlier years cannot be exact, IUMI noted.

    It added that the fortunes of the cargo market tend to follow trends in world trade and predictions from the International Monetary Fund are optimistic.

    “Global trade appears to have returned more strongly than expected after the outbreak of Covid, which lends a positive outlook for business opportunities within the cargo market going forward,” said IUMI.

    It added that improving loss ratios in 2019/2020 returned the cargo sector to technical break-even for the first time in many years.

    “Although the claims impact was relatively low in 2019/2020, which helped return the sector to a technical break-even, there is still a potential for a higher claims environment to return in 2021 and beyond. In particular, accumulation of risk continues to cause concern. The trend of storing large amounts of cargo at single sites or on single vessels exposes high values to nat cat or man-made events that could easily result in costly claims,” continued IUMI.

    Global ocean hull premiums, meanwhile, rose 6 percent last year to $7.1bn, according to IUMI.

    Growth was particularly strong in the Nordic region but much weaker in the UK and Lloyd’s market, where the decline in recent years continued. Again, claims were low because of Covid-19 and IUMI said the current recovery might see claims return to more normal levels in the near future.

    It added that, in general, ocean hull loss ratios improved across all regions, returning the market to a technical break-even position after many years of “unsustainable” results. Shipping’s return to full activity might negatively impact that position, however, it warned.

    “Of particular concern is that the frequency of onboard fires does not decline contrary to the overall claims frequency. This is particularly true for large container vessels. Statistically, these vessels are more prone to fire due to the large quantities and variation of cargo being carried, as well as the challenges inherent in fighting a fire on such a large vessel at sea. Containership fires affect seafarers, the environment, as well as cargo, hull and liability insurance, and must be urgently addressed,” it said.

    Philip Graham, chair of IUMI’s facts and figures committee, said: “Our analysis for 2020 shows some signs of encouragement for market development in all main marine insurance lines and in all global regions. But we should remain cautious as there are a number of factors at play.

    “On the positive side, we are seeing new markets enter the marine insurance space, particularly offshore wind where project sanctioning has overtaken offshore oil and gas for the first time… more generally, OECD business confidence has returned, or is rapidly returning, to pre-Covid levels, world trade forecasts are extremely positive and this will drive demand for shipping and, consequently, marine insurance… overall, shipping appears to be bouncing back strongly from the outbreak of Covid,” he added.

    But he warned that increased shipping activity, reactivation in the offshore energy market and an increasingly ageing merchant fleet have the potential to reverse the current downward trend in marine claims

    Patoma Admin by — September 6, 2021 in Insurance 0
    Naicom boss charge 47th AIO participants to broaden partnerships, relationships

    By Favour Nnabugwu

     

    Nigeria’ Commissioner for Insurance, Mr Sunday Thomas charged insurance and all other stakeholders at the 47th African ainsurance Organisation, AIO, to use the opportunity offered by the conference to establish new partnerships and make new relationships.

    The Chief Executive Officer of National Insurance Commission (NAICOM), Mr Thomas while welcoming foreign and local delegates to the 47th Africa Insurance Organization (AIO) conference in Lagos yesterday said the insurers should expand the horizon during the event.

    He said the new relationships and partnerships will not only enhance the effectiveness of the industry but  will add value to insurance operations in the Continent.

    Speaking on the effect of COVID-19, he said “The Pandemic was challenging to everything that has to do with human affairs, in spite of the pandemic we still have time to have this program.”

    “I want to believe that in the course of this programme new relationships and partnerships will be established, friends will be made, I know that kicking off tomorrow effectively the event is going to add value to our operation. I want to thank you for this evening, let us make the best of the time we have tonight.”

    Patoma Admin by — September 6, 2021 in Insurance 0