World Bank steps up financial capacity

By Favour Nnabugwu



The World Bank has step up its lending capacity, a major boost in firepower that will give millions of people a chance to escape poverty

At this critical moment in history, and echoing the calls from the international community, the Bank is doubling down to tackle intertwined challenges – jobs, climate, fragility, and pandemics. These efforts entail decisive action to build a better Bank to achieve a world free of poverty on a livable planet.

That work includes a new playbook to drive impactful development and take more risk—helping create a world that is inclusive of everyone, including women and young people, resilient to shocks, and sustainable.

The Bank has taken a hard look at all available options as part of a work plan to stretch every dollar—while preserving its AAA credit rating. Together, the steps announced today will greatly expand the Bank’s financial capability to spur growth and jobs—the surest path out of poverty.

Without progress on this front, development will stall at best and slide backward at worst. Over the next few months, the Bank will develop and share additional ideas to maximize its impact, exploring new opportunities while carefully managing potential risks.

The potential for these instruments to extend the impact of a single dollar is game changing. For example, every new $1 could drive an additional $6 of new lending over a 10-year period.

Increasing the power of guarantees World Bank shareholders can provide to boost lending. The proposed portfolio guarantee program is a shared approach to risk that will make World Bank financing more widely available, with shareholders stepping in if countries can’t repay their loans. That means $5 billion in guarantees could generate $30 billion in lending over 10 years

—funds to send more girls to school, support farmers struggling to cope with climate change, or provide vital health care
.Raising hybrid capital from shareholders and other development partners. Hybrid capital offers a new way to move the needle in development—by giving shareholders and partners an opportunity to invest in bonds with special leveraging potential. With $1 billion of hybrid capital, the Bank can increase its lending by up to $6 billion over 10 years and deepen its impact on the people most in need.

Extracting more value from callable capital. Callable capital is a commitment from our shareholders to step in with new funds to help the Bank only under extreme circumstances. Widening the conditions, and clarifying the procedures and mechanism, under which the Bank can call on shareholders, could help the Bank absorb more risk and expand lending. More work will need to be done together with rating agencies and shareholders to make callable capital more useful.

Moving forward with the IDA Crisis Facility. The poorest countries desperately need more concessional funds to respond to the climate emergency, food insecurity, and other crises. The Bank is now fundraising for the new IDA Crisis Facility, which will strengthen its ability to help countries in challenging times. The target is $6 billion—with a huge development impact from every dollar.

In addition to the actions announced today, the Bank recently unveiled other initiatives to put impact at the heart of its work. Last month, the Bank established a new Private Sector Investment Lab, which will generate, test, and scale impactful ideas that remove barriers to investment in emerging markets. The Bank also introduced an enhanced toolkit to help countries respond quickly and effectively to natural disasters and jumpstarted an effort to develop a new approach to tracking climate outcomes more effectively, one that better measures impact, rather than dollars out the door

Universal Insurance has capacity to carry diverse risks – MD

By Favour Nnabugwu

Universal Insurance Plc, one of the fastest growing insurance companies in the country, says the company has the capacity to diverse risks
Managing Director and Chief Executive Officer of the Company, Dr. Ben Ujoatuonu, at the annual general meeting of Nigerian Association of Insurance and Pension Editors (NAIPE) in Lagos, noted that the Company has capacity to carry diverse risks from the insuring public.
Dr. Ujoatuonu stated that the Company has garnered positive recognition in the international reinsurance market. “Since I came on Board as Managing Director of Universal Insurance, we have been able to arrange very robust and well-structured reinsurance programme. He said. “I am a technical person and I understand the trajectory of the business. That has helped us to build capacity over the years”.
“We don’t play with our reinsurance. Our reinsurance broker once said to me, ‘in the international market, you are the only person that doesn’t waste time in paying his reinsurance premium’.
Dr. Ujoatuonu revealed that he is very passionate about having reinsurance cover for the Company’s businesses. I don’t play with it, because you can take a risk today and go to bed and anything can happen the next day. So, we have a well arranged and structured reinsurance programme where we can easily fall back to, and over the years we have also built retention to enable us carry diverse risks from the insuring public.”
He noted that the Company has been working round the clock to build strong units and departments that can deliver value to customers.
 “We took time to set up some strong units and departments in our Company and I must tell you that the efforts we put in over time, have started yielding results, and that is what we are seeing now. It did not just come out overnight. We have been working underground in the last six years in developing some areas of our units and that has yielded a whole lot of results.”
The Universal MD explained that the Company takes the issue of insurance awareness creation seriously and is in the forefront of creating awareness on insurance round the country.
According to him, “Insurance awareness is a continuous issue and it is also a very serious issue in our industry. We have embraced opportunities beyond our digital operations and presence in social media. We are also trying to have physical presence as much as possible in areas that we operate.
“In creating awareness, we also seek to support some ideas such as the Chartered Insurance Institute of Nigeria (CIIN) programme of reaching out to people such as the secondary schools reach-out programme and all the rest of it. We participate in the CIIN programmes. And beyond that also, we get to talk to students in some schools.
“Also during NYSC camp, we also have presence there talking about insurance. We are not expecting to get any business in terms of naira and kobo, but to create awareness. The issue is that there are situations where graduates of Nigerian universities don’t even know anything about insurance. We have programmes like that from time to time and we collaborate with other arms of the industry to create the needed awareness.
He said that the aim is not just to create awareness about insurance but to get people to know Universal Insurance and what they are doing