A. M. Best revises WAICA Re outlook from B+ to Negative

By Favour Nnabugwu



AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of WAICA Reinsurance Corporation PLC (WAICA Re) (Sierra Leone).

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

The Credit Ratings (ratings) reflect WAICA Re’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management.

The revision of the outlooks to negative from stable reflects pressure on WAICA Re’s balance sheet strength, following the deterioration of the company’s risk-adjusted capitalisation, driven by significant business growth over the past 24 months.

WAICA Re’s risk-adjusted capitalisation remained, however, at the strongest level at the end of 2021, as measured by Best’s Capital Adequacy Ratio (BCAR), albeit with a reduced buffer to absorb potential shock losses.

The balance sheet strength assessment also considers the company’s conservative investment allocation by asset class, with the majority of the portfolio held as cash and deposits, and low level of retrocession dependence.

Partially offsetting rating factors include the company’s exposure to significant economic, political and financial system risks associated with the countries where WAICA Re operates in, which include Nigeria, Ghana and Sierra Leone, as well as a relatively high level of insurance receivables.

WAICA Re has a track record of strong operating performance, demonstrated by a five-year (2017-2021) weighted average combined ratio (as calculated by AM Best) and return-on-equity ratio of 88.4% and 12.4%, respectively.

AM Best expects WAICA Re’s prospective earnings to remain strong, underpinned by robust technical performance, and complemented by positive, albeit modest, investment returns, reflecting the low-yielding assets in which the company primarily invests.

AM Best considers WAICA Re’s business profile to be limited owing to its relatively small size and geographic concentration of business in Nigeria and Ghana. The company reported gross written premium on a consolidated basis of USD 153.3 million in 2021.

Whilst AM Best expects WAICA Re to grow its premium base gradually through diversification into other markets, business is expected to continue to originate primarily from Nigeria and Ghana.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page.

Insured losses from natural disasters hit $34bn in H1 2022, says Munich Re

By admin



The first half of 2022 is estimated to be the highest level of weather-related losses, which, globally, reached $65 billion in the period, of which slightly more than 50% were covered by re/insurance, according to Munich Re.

The reinsurer’s H1 2022 natural disaster review examines a period dominated by weather-related catastrophes in numerous parts of the world.

Overall, events in the period drove economic losses of $65 billion, which is down on last year’s $105 billion, with insured losses staying roughly the same at approximately $34 billion, reports Munich Re.

In terms of insured losses, the costliest event was the extreme rainfall and floods in eastern Australia at a provisional $3.7 billion, with economic losses from this event totalling $6.6 billion. Record levels of rainfall occurred in parts of Queensland and New South Wales, with some areas recording their highest flood peaks since 1893.

However, the U.S. dominates the loss figure for H1 2022, with overall losses reaching a significant $28 billion, of which $19 billion were insured. This means that the U.S. accounts for more than 82% of the economic loss total from natural disasters in H1 2022, and almost 56% of the insured loss total

According to Munich Re, the main driver of the losses in the U.S. relates to a single severe thunderstorm front that produced tornadoes in April, destroying asset worth more than $3 billion, of which around 75% were insured. The fact the majority of losses occurred in the U.S., which has a higher take-up of insurance when compared with other parts of the world, is a reason that the insured loss proportion of the overall loss is higher this year than compared with last year.

Munich Re notes that this is “a perfect example of how high insurance density can help absorb the economic shocks of natural disasters.”

However, in other, emerging parts of the world, insurance penetration remains dangerously low, and this includes parts of the Asia-Pacific region, which were also hit by major disasters in the first six months of this year.

This includes a magnitude 7.3 earthquake that struck of the east of the main island Honshu in Japan, which drove insured losses of $2.8 billion and total losses of $8.8 billion. In total, Munich Re finds that the Asia-Pacific region accounted for $22 billion of total economic losses from nat cats in H1 2022, of which $8 billion were insured.

The difference between insured and economic losses (known as the protection gap) from natural disasters in the Asia-Pacific and the U.S. is clear, and is becoming more apparent as climate change, and its impacts accelerate.

“The recently published IPCC report warned of the need for insurers to adapt their loss models to adequately assess the changing risk. Loss prevention is a fundamental component in mitigating the economic effects of climate change. It is therefore extremely worrying that insurance penetration in developing and emerging nations is stagnating at well below 10%, and that even in industrial countries there is much room for improvement,” said Torsten Jeworrek, Member of the Board of Management, Munich Re.

Elsewhere, Europe experienced extreme heat and dry conditions that led to water scarcity and wildfires, notably in Spain, Portugal, and Italy.

“What used to be warm days will be hot days, what used to be hot days will be extremely hot days. Droughts and wildfires are a direct consequence of this,” said Ernst Rauch, Chief Climate Scientist at Munich Re, and head of the Climate Solutions Unit.

Europe also felt the force of winter storms through H1 2022, which brought hurricane-force winds to parts of the continent, notably in England, Ireland, Belgium, the Netherlands, Germany, and the Baltic coast. Munich Re pegs the overall cost from these storms at $5.2 billion.

The greatest humanitarian tragedy witnessed in H1 2022 was the 5.2 magnitude earthquake in Afghanistan, which claimed the lives of roughly 1,200 people.

Overall, Munich Re reports that some 4,300 people lost their lives in natural disasters in the first half of 2022, which is up on 2021.

“They may all be individual events with different causes, but taken together, one thing is becoming extremely clear: the powerful influence of climate change is becoming ever more evident! And the consequences for people across the world are becoming ever more palpable. The IPCC has made an even clearer diagnosis, stating that weather-related disasters such as heatwaves, torrential rainfall or droughts on a warmer Earth will increase in both frequency and intensity. Heatwaves will tend to last longer and bring more extreme temperatures. This will differ from region to region – in Europe it will be the south that is hit hardest,” added Rauch.

NEPZA, FIRS agree to adjust FTZs new tax system

By Favour Nnabugwu


The Nigeria Export Processing Zones Authority (NEPZA) and the Federal Inland Revenue Service (FIRS) have agreed to adjust some sections of the recently signed Memorandum of Understanding (MoU) on the efficient management of the free trade zones tax system in order to accommodate salient concerns of the stakeholders.

The Managing Director, NEPZA,. Mr. Adesoji Adesugba, explained that the event was to make adjustments where necessary on how the FIRS and NEPZA would treat tax issues relating to business interactions within the free trade zone ecosystem.

He noted that section 5 of the MoU had given parties the leverage to call for the amendment of the tax guidelines when necessary.

“The Authority’s recent diplomatic advances with sisters agencies, especially, the FIRS can only be described as a game changer. We now see ourselves as partners in progress.

“We have always insisted that the free trade zone scheme must be allowed to succeed as that truly remains a potent economic instrument for widespread growth and development.

“Therefore, we have agreed to adjust the tax pact to capture some of the salient concerns of the stakeholders.
“The Authority will not sheer away from protecting the scheme and those who have invested billions of dollars in the scheme. We are delighted that the FIRS has become our advocate in this regard.

” We are also happy that the administration of President Muhammad Buhari has given us the impetus through his favourable policies to deepen the growth of the scheme,” he said.

Recall that the agencies on June 7 signed the tax pact to reconcile all grey areas in the administration on issues bordering tax deductions from free zones and enterprises operating in the zones respectively.
The agreement to adjust the MoU was reached on Wednesday during a roundatable where the document was formally presented to the stakeholders in Lagos.

A cross section of the Stakeholders had raised concerns on some sections of the guidelines as according to them, those sections contravened some provisions of the NEPZA Act for operators in the free zones.

The Executive Chairman of the FIRS  Alhaji Mohammed Nina had promised to evaluate the concerns of the stakeholders, adding the document was a flexible guideline on how to administer the MoU.

Represented by Mr Mathew Gbonjubola, the Coordinating Director of the service, Nina said that not all the concerns raised were genuine, adding that the FIRS was knowledgeable enough on issues around free trade zone tax administration.

Nina explained that the service would not unduly interrogate tax remittances of enterprises with full status of free trade zones, adding that the service would, however, always insist on remittances of returns, Valued Added Tax (VAT), and Withholding Tax, respectively.

He further noted that all other issues raised on the tax pact would be addressed within two months.

On his part, Chief Toyin Elegbede, the Executive-Secretary of the Nigeria Economic Zones Association (NESA), said that the forum became important to address the concerns of his members on the tax administration pact signed between NEPZA and FIRS.

According to him, “The discussions from forum elicited hopes and assurances on the commitment of government to support the in-flow of Foreign Direct Investment (FDI) through the free trade zone scheme.
The forum was attended by Chief Executives of free zones, enterprises, contractors, consultants and other key stakeholders.

Africa Re partners Finance Ministry, IFE for meeting in Egypt

By Favour Nnabugwu
Africa Reinsurance Corporation, Africa Are, Africa’s first continental reinsurer is in parternship with the Ministry of Finance, Insurance Federation of Egypt (IFE) for a meeting in that country.
The Chief Executive Officer of African Re, Egypt, Mr Gamal Sakr noted that Egypt’s hosting of the company’s meetings asserted the great importance of the state on the global and African levels and the country’s attractiveness for hosting the meetings of regional financial institutions.
Sakr also explained that the meetings are expected to discuss the company’s financial results in 2021, its performance in African markets, and other topics that relate to the insurance and reinsurance industries in light of the challenges imposed by the ongoing global crisis.
African Re was established in 1976 as part of an initiative that was adopted by 36 African countries. The company operates through six regional offices in Côte d’Ivoire, Egypt, Kenya, Mauritius, Morocco, and Nigeria.
For the first time in the local market, the Financial Regulatory Authority (FRA) is considering okaying the creation of a reinsurance company with a minimum capital of EGP 1 billion with insurance companies operating in MENA as shareholders
On his part, the Minister of Finance, Mr.  Mohamed Maait the choice of Egypt for the Africa Are meeting was step in the right direction.
“Choosing Egypt for hosting these meetings reflects the country’s position in Africa and its supportive role to economic, political, and cultural African issues. It also mirrors Egypt’s endeavour to enhance and support the leading role Egypt plays in the continent, which is increasingly important amid the current challenging times,”
Maait also noted that the ongoing global crisis has created numerous challenges, but also has presented a bunch of opportunities for greater African cooperation in several sectors — especially in economic areas — as the majority of African economies are offset by the vulnerability of local savings and investment levels that require attracting more direct and indirect foreign investment in order to achieve their economic growth.
“In this regard, African Re can play an important role through its direct investments and its services in the field of reinsurance, as it provides a protection umbrella for African companies that are operating in this field”
“Also, the company is the largest in Africa and the Middle East, as it ranks the 39th among grand reinsurance companies globally and places 42nd in the 50 best global groups in the reinsurance industry,” Maait expounded.
Leadway, Axa Mansard, CHI top five media performance companies – report

By Favour Nnabugwu
Top five insurance and commercial bank ranking on media performance showed Leadway Assurance, Axa Mansard and CHI in the first three of the report..
The other two are Mututal Benefits and AIICO Insurance.
The report captures and ranks the top five Insurance companies and commercial banks’ media exposure, achieved through meticulous media data gathering and analysis of salient metrics in the Online and Print media.
Leading media and public relations audit agency, P+ Measurement Services has carried out a thorough and independent analysis of the media performance of Nigerian Commercial Banks and Insurance companies for the month of June 2022.
In the insurance sector, the media performance audit report revealed thatCHI Leadway Assurance, had the most media share with 45 percent followed by AXA Mansard Insurance with 17 percent, Consolidated Hallmark Insurance clinched the third position with 14 percent, Mutual Benefit Insurance followed closely with 13 percent,  while AIICO Insurance completed the list with 11 percent media exposure
The media performance audit report revealed that the Managing Directors of Leadway Assurance, Tunde Hassan-Odukale had the most media share with 45 percent followed by Kunle Ahmed of AXA Mansard Insurance with 17 percent, Eddie Efekoha’s Consolidated Hallmark Insurance clinched the third position with 14 percent, Femi Asenuga  Mutual Benefit Insurance followed closely with  13 percent   Babatunde Fajemirokun of AIICO Insurance with 11 percent media share.
In the banking, the report says First Bank sits at the top of the chart with a 29 percent media share. Following closely is Stanbic IBTC Bank with 23 percent, Access Bank ranked third with 18 percent media share, while Fidelity Bank and Wema Bank completed the chart with 17 percent and 13 percent respectively.
11 DisCos creates N67bn deficit over poor remittance – NERC

By Favour Nnabugwu



Failure by 11 electricity distribution companies in Nigeria, DisCos, to fully pay for electricity allocated to them created a deficit of N66.85 billion in the Nigerian Electricity Supply Industry, NESI, in the third quarter of 2021, according to the Nigerian Electricity Regulatory Commission.

NERC in its third quarter report on the sector’s performance stated that while the DisCos were billed N208.54 billion for energy and administrative services by the Nigerian Electricity Bulk Trading Plc and Market Operator, MO, they collectively remitted a total of N141.69 billion (N100.16 billion for NBET and N41.53 billion for MO), translating to a remittance performance of 67.94 percent during the third quarter.

The report added that the remittance was however 17.84 percent higher than the 50 percent remittance rate recorded in the second quarter of 2021.

The report indicated that Eko DisCo recorded 103.29 percent (N20.40 billion) remittance performance while Abuja, Ibadan, Kano, Ikeja, Kaduna and Yola DisCos had remittance performances of 83.24 percent (N23.05 billion), 58.14 percent (N17.50 billion), 49.37 percent (N8.17 billion), 13.35 percent (N2.46 billion) and 21.19% (N0.96 billion) respectively in 2021/Q3.

“This remittance is consistent with relative stability in collections – the escrow mechanism has ensured that as much of the collections as possible is used to meet upstream market obligations”, the report added.

NERC explained that “as part of the conditions for the several interventions that the CBN has extended to the DisCos, an escrow agreement was set up. Under this arrangement, all the revenues of the DisCos are escrowed with DisCos only having access to these funds after necessary deductions (VAT payments, repayments of CBN loans, payments to upstream players in the NESI – TCN and NBET) have been made. This escrow mechanism provides visibility into the financial performance of the DisCos with respect to collections.

“In June 2020, the remit of the fund manager responsible for the escrow was expanded to include the implementation of the payment waterfall framework which was designed by the Commission to increase upstream market remittance to NBET to cover the cost of energy taken from Generation Companies and MO for transmission and administrative services. Prompt payment of upstream market settlements is critical for securing the availability of generation and transmission capacities. The waterfall regime pushes DisCos to boost their collections because a majority of their allowed revenues rank low in the waterfall.

“In the absence of cost-reflective tariffs, the Government undertakes to cover the resultant gap (between the cost-reflective and allowed tariff) in the form of tariff shortfall funding. This funding is applied on the NBET invoices that are to be paid by DisCos.

“The amount to be covered by the DisCo is based on the allowed tariff determined by the Commission and set out as their Minimum Remittance Obligation (MRO) in the periodic tariff Orders issued by the Commission”.

AfDF approves Risk Participation Agreement with Crédit Agricole CIB to stimulate intra-African trade

By Favour Nnabugwu


The Board of Directors of the African Development Bank Group, AfDF, has approved a Risk Participation Agreement of $50 million with Crédit Agricole Corporate and Investment Bank.

The deal will enable African banks and their small and medium-sized enterprise (SME) clients to participate more in regional and international trade. It aims to support a cumulative trade transaction volume of $450 million over the next three years.

“This agreement strengthens confidence among various African actors to encourage a new trade dynamic on the continent,” said Mohamed El Azizi, the African Development Bank’s Director General for North Africa. “And this is crucial for the realization of the African Continental Free Trade Area, which will help to build resilience, generate growth and promote a recovery that creates opportunities and jobs.”

Stefan Nalletamby, the Bank’s Director for Financial Sector Development, said: “This partnership will enable Crédit Agricole CIB, an institution that is renowned for its commitment to Africa, to do more trade finance by further supporting local banks. When fully up and running, the partnership could support some 50 local issuing banks and their business clients across different African countries. It should act as a catalyst for major trade flows over the next three years.

The Risk Participation Agreement aims to meet the growing demand in African markets for trade finance in vital economic sectors, such as agri-food, energy, manufacturing, healthcare, and services. It will also encourage productive diversification in several African economies, creating more jobs and tax revenues.

By guaranteeing commercial banks and African SMEs’ access to trade finance, the agreement will stimulate economic growth and regional integration.

Currently, most African banks are poorly capitalized – a situation aggravated by the adverse knock-on effects of the Covid-19 pandemic – which limits their ability to access lines of credit from international banks. This difficulty has been worsened by the tightening of equity capital and conformity-related regulatory requirements, which has led international banks to reduce their commitments and the size of correspondents in Africa.

The approval of the Risk Participation Agreement aligns with the African Development Bank’s High 5 strategic vision to establish the conditions necessary for strong, sustainable and inclusive growth on the continent.

Crédit Agricole CIB is the Corporate and Investment Banking arm of Crédit Agricole, the world’s 10th-largest bank by balance sheet size in 2021 (The Banker, July 2022). It offers its corporate and institutional clients a broad range of services in capital markets, investment banking, structured financing, commercial banking and international trade

The Bank is a pioneer and leader in climate finance, with a comprehensive range of solutions for its clients. More than 8,900 employees in Europe, the Americas, Asia-Pacific, the Middle East and Africa support the Bank’s customers, meeting their financial needs worldwide

NiMet DG, Prof. Mansur Matazu confers with RIMSON Fellow

By Favour Nnabugwu
Director-General of the Nigerian Meteorological Agency (NiMet), Professor Mansur Matazu has been conferred with Fellow of Risk Managers Society of Nigeria, (RIMSON)
Matazu collaborations with various partners, government and non-governmental organizations has aided the weather forecast agency to co-produce and deliver user-defined, impact-based products and services which are accurate, reliable and timely.

The NiMet DG gave this revelation after being as well as the Distinguish Service Award by the Rotary Club of Abuja Metro (RCAM)

According to him, “Almost across all continents of the world, humanitarian crisis is on the increase, requiring cooperation and various levels of partnership to overcome”.

The decision by the Board of Trustees and the Executive Management of RIMSON to confer the Award of the Fellow of Risk Managers Society of Nigeria on Professor Matazu was done in recognition of his integrity, professionalism, commitment and contribution to Risk Management as well as the contribution of NiMet to preventing and mitigating disasters in Nigeria under his leadership.

Matazu observed that national development of any nation was in jeopardy in an atmosphere of chaos, diseases, disaster, epidemics, food insecurity, hazard and many more.

Matazu noted that Rotary Club as a non governmental organization and a non profit
humanitarian service provider was commendable especially with the many challenges being experienced in the world today

He noted that in the heart of solution was the Rotary international supporting global efforts at improving quality of lives and building international relationships.

According to Matazu the new president of the Rotary Club, Rotarian Ifeanyi Nnodu, was an effective pillar of progress in NiMet until his retirement as a worthy Director of Weather Forecasting Services.

The RCAM is the biggest Rotary Club in Africa with membership of over 200 from various professions.

Cameroonian insurance industry records $396m turnover in 2021

By Favour Nnabugwu



Cameroonian insurance market has recorded a turnover of 228.9 billion FCFA (396 million USD) as at 31 December 2021, According to Association of Insurance Companies of Cameroon (ASAC),

This amount is 8.6 percent higher than the 210.7 billion FCFA (394 million USD) of premiums posted in 2020.

With 152.6 billion FCFA (264 million USD), the 2021 turnover of the non-life class of business shows a progression of 8.4 percent compared to that of 2020. This segment accounts for 67 percent of total premiums.

AXA Assurance is in first place with 14.1 percent of non-life premiums. With market shares of 11.2 percent and 10.5 percent Activa and Chanas Assurances are second and third respectively in the non-life ranking.

Life insurance has shown a 9 percent increase during the financial year 2021 as the turnover went from 69.9 billion FCFA (130.7 million USD) in 2020 to 76.3 billion FCFA (132 million USD) a year later.

All ten insurance companies operating in the life class of business account for 33 percent of the market’s overall premiums. Allianz Vie is at the top of the life companies’ ranking with a 27.3 percent share of the life premium income. Next in the ranking are Prudentiel