AfCFTA offers economic opportunities–Osinbajo

By Favour Nnabugwu

VICE President Yemi Osinbajo said the coming decade anchored on the African Continental Free Trade Area (AfCFTA), offers great opportunities for socio-economic transformation.

Prof Osinbajo stated this in a message delivered at the closing of the 2021 Conference of African Insurance Practitioners, themed “Rebuilding Africa’s Economy: An Insurance Perspective.”

Urging African insurance practitioners to leverage opportunities in the AfCFTA, the Vice President said “every smart economic grouping, whether governments or businesses, must be thinking, planning and strategizing for these new times.”

According to him, “The free trade agreement presents a major opportunity for African countries. By some estimates, if we get it right, we can bring several millions out of extreme poverty and raise the incomes of 68 million others who live on less than $5.50 per day. There are potential income gains of up to $450 billion, and just cutting red tape and simplifying customs procedures alone could drive up to $250billion of that sum.

“So, what does all this mean for the insurance industry in Africa? Well, plenty of opportunities. More trade in goods will mean greater need for insurance services, brokers, in particular, should expect a boom; demand for trade facilitation services will rise, but obviously companies that already have market presence in other African countries, even if by collaboration, will benefit more than others.”

Continuing, the Vice President noted that “we can expect to see more well capitalized insurance providers from other African countries coming to compete in the Nigerian market. And we shouldn’t be surprised if this happens quickly.

“Services can be set up faster than manufacturing plants. Nigerian financial services companies, especially banks, are already in many African Countries, the likes of Zenith, Access, UBA. How about Insurance companies? We should now be looking at developing homegrown international African insurance conglomerates. The time is now.”

On the issue of climate change, Prof Osinbajo probed, “how is the African insurance industry preparing for the interesting days ahead?”

Referencing a Mackenzie podcast transcript, the Vice President said, “it was quite eye opening. While there will obviously be opportunities for new insurance products and solutions, especially in the property and casualty segment of the business, insurance companies must also be prepared for the systemic nature of climate induced damage, with the possibilities of market failures and more system-wide destabilization.

“Here in Nigeria, the growing intensity of flooding and damage to vast agricultural acreages might have a knock-on effect on other areas of the economy. Further slumps in the economy is bad for everyone, even insurers.”

Prof Osinbajo then added that, “for Africa, there is perhaps a more significant challenge. In the past two years, the wealthier countries, after building their own economies on fossil fuels, are now banning or restricting public investments in fossil fuels, including gas. Seven European countries, including France, Germany, and the United Kingdom, announced that they would halt public funding for certain fossil fuel projects abroad.

“Also, the World Bank and other multilateral development banks are being urged by some shareholders to do the same. The African Development Bank, for instance, is increasingly unable to support large natural gas projects. Already, some OECD based insurance companies are already committing to reducing their commitments to carbon intensive industries by 2030.”

Explaining the implication of the trend on Africa’s growing oil and gas markets, Prof Osinbajo said, “I think African insurance companies must now speak and act differently.”

“You must be at the forefront of the campaign for a just and equitable transition to a low carbon future. This means that we cannot accept a defunding of gas projects when gas is an important transition fuel for us. Not just to get our people from the environmentally damaging firewood to cooking gas, and also autogas for our auto vehicles, but to also provide much needed power for industries and domestic use.

“Africa’s economic future might really be at risk if we do not find our voices and, in unison, insist that the necessary speed to zero emissions must not mean disaster for our African economies,” the Vice President added.

Air Peace boss fulfills cash promise, gives Super Eagles N20m

By Favour Nnabugwu

 

 

Chairman of Air Peace airline, Barrister Allen Onyema fulfilled his promise to the Super Eagles by giving them the sum of N20 million for winning their match against the Blue Sharks of Cape Verde on Tuesday.

This is just as he charged the Eagles to keep up their winning streak and continue uniting Nigeria with their pitch exploit.

The Eagles, who flew to and from Cape Verde in one of Air Peace’s ultramodern Embraer 195-E2 aircraft, received the cheque upon arrival yesterday at the Murtala Muhammed International Airport, Lagos.

Recalled the Air Peace chairman made a promise to the Eagles on their way to Cape Verde for the match that ended 2-1 in favour of Nigeria.

Onyema while congratulating the players on the second win in their World Cup qualifiers campaign, charged them to also emerge victorious in their subsequent games.

He expressed delight that the Eagles did not disappoint the nation, adding that ‘we believe in your capabilities and have faith in you”.

“I am happy that you fulfilled your promise to the nation, knowing that you carry the aspirations of Nigerians on your young shoulders. When you were one-zero down, everybody was panicking. Everybody was praying. And you responded like lions and won the match”.

“There were celebrations all over the country- North, South, East and West”, he said.

The nationalist implored the team to keep up the winning streak and continue uniting Nigerians with their pitch exploits. He added that Air Peace believes in the team and will continue to support them to take Nigerian football to greater heights.

Responding, Eagles Captain, Ahmed Musa, who said he enjoyed flying the brand new E195-E2 aircraft, thanked Allen Onyema for his kind gestures towards the team and stressed that Onyema’s unity speech really inspired the players.

It can be recalled that Onyema had urged the players before they departed for Cape Verde a couple of days ago, to use their football strides to unite Nigerians, emphasising the unifying power of sports, while also promising them cash rewards.

PILA calls on women for Africa economic recovery

By Favour Nnabugwu

 

 

The President of the Professional Insurance Ladies Association (PILA), Mrs. Joyce Ojemudia, has called on African insurance women to come together in order to actualise their dreams for Africa’s economic recovery.

She wished that women more strategic positions in governance, noting that the hope of the continent would only be brighter if the female gender is factor into consideration of for strategic positions in governance and policy making across the continent.

Ojemudia who is also the Managing Director of African Alliance Insurance, was speaking at the 2021 Women’s Forum of the African Insurance Organization (AIO) Conference held in Lagos yesterday, harped on the idea behind PILA Africa Initiative and the need for women to come together.

According the idea is to have an umbrella body of female insurance professionals and practitioners in Africa under which members will glean together to harness the rich potentials God endowed us with to ensure women take their rightful place in our various countries and Africa at large.

“Part of that gleaning comes in the form of professional networking, knowledge sharing and mentorship which is why the Theme for this Workshop; an offshoot of the 47th AIO Conference; “Women Collaborating For Africa’s Economic Recovery” is very apt. Statistics show that women constitute a significant chunk of the demography of African continent with population of approximately 691m.

“Out of this population, a critical chunk are professionals, including those operating in the Insurance Industry. From these records, coupled with the renewed acceleration of the number of women taking up careers in the professions, the hope of the continent would only be brighter if the female  gender is factor into consideration of for strategic positions in governance and policy making across the continent.

“PILA Africa is an initiative of PILA Nigeria, which has snowballed into many other African countries establishing similar associations and a lot more at the verge of concluding their modalities.

‘It is expected that many other African countries here represented, will be encouraged to establish their local associations.  PILA Nigeria is ever ready to partner with you in this regard,” she said.

While appreciating the past Chairperson of the PILA Africa Organising Committee Dr Mrs Tonia Smart for her great achievements in this regard, she commended the immediate past Secretary General of the AIO, Ms Prisca Soares, whom she said performed her duties meritoriously over the years.

Soares who was described by PILA President as Pillar of the insurance industry not just in Nigeria but also in  Africa for her strides was officially honoured.at this event.

Speaking on the theme “Women Collaborating For Africa’s Economic Recovery,” Dr. Abiba Zakariah, listed how women can collaborate to contribute to Africa economy to include the unification of the individual country associations; uniting with others female bodies in various countries; Collaborating with global female associations and focusing on strategic directions of meeting agendas.

On how women can take control of their narrative, she emphasized the need for women to strategize, ensure female child.education as well as women participation in politics and policy formulation.

She also listed the benefits of women Collaboration to include economic growth; achieving the 2030 agenda for sustainable development; achieving the gender parity realization of women rights and gender equality amongst others.

Global reinsurance capital rose 4% to $688bn in H1 2021

By admin

 

 

In its latest global reinsurance market report, Willis Re says reinsurers retained more net income than usual, returning less than half to shareholders, to drive growth in the current stronger rating environment.

Willis Re said returns on equity (ROEs) had improved from negative territory last year, but underlying ROEs are still below the cost of capital.

Premium growth at reinsurance firms was 15 percent higher in H1 2021, boosted by price increases at both primary and reinsurance level, as well as higher exposure as the global economy rebounds, says Willis Re.

“The 15 percent growth rate is the strongest we have seen at the half-year stage since we began producing this analysis in 2014,” it adds.

Global reinsurers recorded a half-year combined ratio of 94.1percent, compared to 104.5 percent in the first half of 2020, when Covid-19 hit. Willis Re says the combined ratio “closely matches” half-years for 2016 to 2019 and was helped by higher levels of reserve releases.

James Kent, global CEO at Willis Re, said: “The industry has endured several years of below-par performance, capped by the calamitous experience of Covid-19. Now the remedial work reinsurers have undertaken over the past several years is bearing fruit.”

Pension assets under management increased by 13% YoY to N12.78trn in July 2021

By Favour Nnabugwu

National Pension Commission, PenCom said assets under management (AUM) of the regulated pension industry increased by 13.0 percent y/y to NGN12.78trn (USD31.1bn) at end-July and by 1.0 percent.

FGN debt securities represented 64.2 percent of the total at end-July. When we include corporate and state government issuance, we find fixed-income exposure equivalent to 72.4 percent of the industry’s AUM. This is a highly skewed allocation of assets in the EM universe, for which some explanations are warranted.

The share of domestic equities rose from 4.6 perceny to 6.7 percent of AUM over the twelve months, and members’ holdings by 65 percent to NGN862bn. Over the same period the all-share index (ASI) increased by 56 percent indicating a small underlying shift by the institutions into domestic equities. It may qualify as distant history in some eyes, but we should recall the beating the PFAs took from the stock market crash of 2008/09.

Another trend to report that is not strictly fixed income is the steady rise over several years in holdings of money market securities. The share of AUM has increased to 16.5 percent in July from 15.8 percent twelve months earlier.

These are mostly bank placements. We suspect that the pressure from the regulator on DMBs to meet its tighter loans-to-deposit ratio requirements has created good opportunities for the nimbler domestic institution.

The holdings of FGN paper are predominantly the bonds, which represented 59.9 percent of total AUM. Investors have enjoyed a very healthy run since the start of the year following the anomalous Q4 ’20.

The driver in our view has been the huge deficit financing requirement of NGN5.60trn in the 2021 budget (before the passage of the supplementary by the National Assembly before the summer recess).

The Debt Management Office (DMO) has raised NGN1.92trn from bond auctions in eight months this year (including non-competitive bids). It is on schedule to raise its initial domestic funding target for the year of NGN2.34trn, an increase of more than 40% on its collection from auctions in 2020.

The average value of a retirement savings account (RSA) at end-July was NGN1.08m, marginally higher than the previous month.

Just NGN177m was invested at end-July in the newest RSA fund (no V), which has been created for micro pensions for the self-employed and SMEs.