All Posts in "Insurance"

Aon’s acquisition of Willis Towers Watson cancelled

By admin

 

The insurance and reinsurance broking world as Aon and Willis Towers Watson (WTW) said they have terminated their combination, or merger agreement, effectively cancelling Aon’s acquisition plans to become the largest player in the market.

aon-willis-towers-watsonAon and Willis Towers Watson said they have, “agreed to terminate their business combination agreement and end litigation with the U.S. Department of Justice (DOJ).”

The $30 billion acquisition and merger had been announced in March 2020 and the pair have been working towards a combination ever since.

But challenges from an antitrust suit had threatened to delay the combination beyond the original merger agreement outside-date, something it now seems the insurance and reinsurance brokers weren’t prepared to push back waiting for a DOJ trial.

Now, Aon said it will pay the $1 billion termination fee to Willis Towers Watson, as thee proposed scheme of arrangement has now lapsed, and both organisations will move forward independently.

Today, Aon CEO Greg Case explained, “Despite regulatory momentum around the world, including the recent approval of our combination by the European Commission, we reached an impasse with the U.S. Department of Justice.

The DOJ position overlooks that our complementary businesses operate across broad, competitive areas of the economy. We are confident that the combination would have accelerated our shared ability to innovate on behalf of clients, but the inability to secure an expedited resolution of the litigation brought us to this point.”

He also said, “Over the last 16 months, our colleagues have turned potential challenges into opportunities to advance our Aon United strategy. We built on our track record of innovation, continued to deliver industry-leading performance and progress against our key financial metrics and move forward with the strongest colleague engagement and client feedback scores in over a decade. Our respect for Willis Towers Watson and the team members we’ve come to know through this process has only grown.”

Willis Towers Watson CEO John Haley added, “Our team’s resilience and commitment are a source of pride and confidence. They have continued to bring to life Willis Towers Watson’s compelling value proposition to better serve our clients in the areas of people, risk and capital. Going forward, our focus remains steadfast on our colleagues, our clients and our shareholders.

“We believe we are well-positioned to compete vigorously across our businesses around the world and will continue to introduce important innovations to the market. We appreciate and deeply respect all the Aon colleagues we got to know through this process.”

Patoma Admin by — July 26, 2021 in Insurance 0
Allianz announces launch of Global Commercial insurance division

By admin

Global re/insurer and asset manager, Allianz Group, has unveiled its new Global Commercial insurance division established under Chris Townsend, Member of the Allianz SE Board of Management, enabling a dedicated focus on the property and casualty (P&C) commercial space

Allianz says that its new Global Commercial Group Center represents a significant organic growth opportunity for the firm, and combines and builds on the substantial resources and expertise within the Group.

“We are excited about the opportunities this division represents for customers and our businesses.

“Current market conditions make the timing perfect to bring a dedicated focus to our commercial P&C business,” said Oliver Bäte, Chief Executive Officer (CEO) of Allianz SE.

These changes will improve our underwriting capabilities and customer propositions right across the commercial sector, but with a particular focus on the mid-market business outcomes, and enable profitable growth, while driving enhancements in our client service,” added Townsend, Member of the Allianz SE Board of Management responsible for Global Insurance Lines & Anglo Markets, Reinsurance, Middle East and Africa.

Allianz’ Global Commercial division is split into three business units: Chief Underwriting Office, Business Transformation, and Global MidCorp.

The Chief Underwriting Office will be led by Rasmus Nygård, who is set to join the company from AIG on September 1st, 2021. In his new role with Allianz, Nygård takes on responsibility for developing an overall underwriting strategy for the business as it looks to produce consistent and transparent offerings to clients and distribution partners around the world.

Jörg Hipp, previously member of the Board of Management of Allianz Versicherungs-AG for the Automotive division, will lead Business Transformation. He takes on responsibility for further driving a data-driven business model while improving the underwriting process.

Finally, Global MidCorp is led by Ole Ohlmeyer, previously already responsible for the regional MidCorp hubs. Allianz explains that the Global MidCorp segment will operationalise the Global Commercial strategy jointly with the regions, and also support them with specific capabilities for underwriting operations and portfolio management.

Patoma Admin by — July 23, 2021 in Insurance 0
Global insured disaster losses estimated $42bn for H1 2021, Aon

By admin

 

Global insurance and reinsurance market losses from natural disasters and catastrophes are estimated to have reached $42 billion for the first-half of 2021 by broker Aon, which is 2 percent higher than the 10-year average.

The broking group said that while this US $42 billion of first-half catastrophe insured losses is only 2 percent higher than the 10-year average ($41 billion), it is 39 percent higher than the 21st Century average ($30 billion), and 101 percent higher than the average of all years since 1980 ($21 billion).

In total, Aon estimates that natural disaster cost the global economy around $93 billion in the first-half of 2021.

The economic loss tally is some 32 percent lower than the previous decade ($136 billion), 16 percent lower since 2000 ($110 billion), but 9 percent higher than the average of all years since 1980 ($85 billion).

All of these numbers remain preliminary, the broking group said today.
Aon’s data comes from a minimum of 163 natural disaster events that occurred in H1 2021, which was below the 21st Century average (191) and median (197).

Interestingly and having ramifications for the insurance-linked securities (ILS) market (in particular collateralised reinsurance), given its focus, the number of disaster events were notably below the 21st Century average in all regions except the United States, Aon said.

In terms of loss of life, natural disasters claimed 3,000 lives during the first-half, which is well below the long-term average (since 1980) of 38,900 and the median of 7,600.

Across the events, Aon counted 22 that drove billion dollar economic losses, the majority of which were weather related.

On an insured loss basis, there were at least 10 separate billion dollar industry catastrophe loss events, Aon said.

The costliest was the US winter storm and freezing weather delivered by the polar vortex, which Aon pegs at the generally accepted $15 billion level.

After that, the severe weather event in Europe in June drove a $3.4 billion industry loss, the Fukushima offshore earthquake a $2.5 billion loss and another US severe weather event $2.5 billion as well.

Patoma Admin by — July 22, 2021 in Insurance 0
Naicom, SERVICOM pally for enhanced service delivery

By Favour Nnabugwu

 

 

The National Insurance Commission (NAICOM) is determined to help the
Service Compact (SERVICOM) achieve it’s objectives to Nigerians.

NAICOM is saddled with responsibility of ensuring the effective administration, supervision, regulation of insurance companies.

The commission is also to control insurance business in Nigeria and protection of insurance policy holders, beneficiaries and third parties to insurance contracts.

The Commissioner For Insyrance, CFI, Mr Sunday Thomas during SERVCOM courtesy visit to the Commission, assured the agency that the commission would set up a committee under the SERVICOM unit to meet and make recommendations so as to promote an effective service delivery initiatives in the sector.

“We are looking forward to the implementation of the service charter of the NAICOM and to take the service charters to Zonal offices to see the values we can add to rejig the unit through knowledge sharing.

“This will help NAICOM streamline its activities towards citizens engagements to get quality services as stipulated in the service charter of the Commission,” he said.

In a statement by SERVICOM Public Relation Manager, Mrs Henrietta Okokon, on Wednesday in Abuja, said the commission proposed collaboration with NAICOM during a meeting

National Coordinator SERVICOM, Mrs. Nnena Akajemeli, , made her intention known, when she visited Mr Thomas Olorundare, the NAICOM’s Commissioner in his office.

In order for the synergy to be effective, Akajemeli called on Olorundare to strategically position the commission through collaborative efforts with SERVICOM to achieve effective service delivery.

According to her, “Public service is the only contact that most citizens have with the government”

She said that SERVICOM was focused in improving the quality of contact with the public by working with Ministries, Departments and Agencies (MDAs) to ensure effective service delivery in Nigeria.

Akajimeli said that the commission had a crucial role in ensuring safety of lives and property of citizens by making sure that an effective administration was established for the conduct of insurance businesses in Nigeria.

She said that the commission was also positioned to ensure adequate protection of strategic government’s assets and other property.

Akajemeli, however, urged the management of NAICOM to provide SERVICOM Unit with needed support and resources for the implementation of its service delivery processes to strengthen the position of the SERVICOM in NAICOM.

“In achieving this, it required networking meetings, customers engagements forum and completion of service charter reviews,” she said.

The SERVICOM boss emphasised on the significance of Service Charter in NAICOM
Akajemeli explained further that the Service Charter would communicate promises and commitments of services provided to its customers.

She said that Charter could serve as operational performance enhancement tool that enshrined the trust between service providers and service takers.

She charged NAICOM on the need to develop a framework to monitor performances against service standards that would identify the gaps for service improvements, regular self-assessments and surveys on effectiveness of the services.

According to her, this will help to improve the performance of the commission.

“And this will be achieved through regular training and re-training of staff on all aspects of service delivery to equip them with prerequisites knowledge, skills and attitudes and to ensure sustained service improvements in the Commission,” she said.

Patoma Admin by — July 22, 2021 in Insurance 0
Enterprise, SIC battle for top spot

By admin

 

Two insurance companies, Enterprise Insurance Company and the SIC Insurance Limited, have remained the dominant players in the market in recent years with a survey revealing that the firms have taken turns to occupy the top spot in the sector.

A report by international rating agency, Fitch, said over the past six years, SIC had occupied the top spot in four years only to lose it to Enterprise in 2018 and last year.

It said the two companies controlled more than a quarter of the industry’s market share last year at a time when 20 insurers were operating in the non-life business.

“In 2020, Enterprise secured 13.4 per cent market share while SIC dropped to 12.5 per cent. Enterprise wrote US$39.7 million premiums that year, just ahead of SIC’s US$43.4 million,” the report, which examined developments in the insurance market, said.

Top four

It listed the Enterprise Insurance, SIC, Hollard and GLICO as the top four largest companies that were engaged in close competition.

It said Hollard, Glico and Star (in third to fifth place in 2020) all reported premiums of between US$20m and US$30m in 2020, giving each a market share of seven to nine per cent.

“In sixth place in 2020 was Vanguard Assurance, which reported US$24.8m in underwriting activity that year, equivalent to about 7.2 per cent of total non-life premiums. Many of the leading non-life companies offer broadly similar portfolios of property and casualty, health, and liability lines to both household and corporate clients,” it added.

Threat from outside

The report said except South Africa’s Hollard, the six largest non-life providers were indigenous companies but noted that “multi-national non-life groups had been growing in stature over recent years.

It said many were now challenging the dominance of the market’s traditional leaders, citing Sanlam as one of the multi-nationals that had been steadily growing its exposure on the Ghanaian market.

“Building on its ownership of the Metropolitan brand in October 2014, the company acquired a 40 per cent stake in the non-life insurance business of Enterprise Insurance for around ZAR240m. Sanlam also owned 49 per cent of Enterprise Life and 40 per cent of Enterprise’s pension fund administration business”.

“Other South African firms have been moving into the country. In November 2014, IVM Intersurer, a significant investor in Hollard group, along with Hollard itself, took a majority stake in non-life insurer, Metropolitan and has since renamed its local operations to Hollard Ghana,” the report said.

Growth

It said the country’s non-life insurance market was one of the fastest-growing in the Sub-Saharan Africa (SSA) region and was undergoing a transformation.

It noted the efforts by the government and the NIC to create a more robust sector with emphasis on consolidation to improve balance sheets but said the approach had been a gentle one to date.

“Over the medium term, it is likely that premium growth will boost larger players in the market, with those with smaller market shares merging or dissolving,” the report said.

On product offerings, the report said services were broad, covering the majority of traditional non-life sub-sectors, including engineering, property, travel, goods in transit, health and motor.

It said the motor vehicle segment was a particular source of innovation within the non-life market, owing in large part, to the relative size of the coverage line which currently accounted for nearly half of non-life premiums written in the country.

“While motor vehicle cover remains a major source of revenue for Ghanaian non-life insurers, there have been concerns surrounding recent rises in claims activity within this segment of the market, due to a rise in road accidents,” it said.

Patoma Admin by — July 21, 2021 in Insurance 0
Munich Re’s Q2 profit hits €1.1bn; COVID losses in Life & Health exceed expectations

By admin

 

Global reinsurer Munich Re has said that while major-loss costs in its property / casualty (P&C) reinsurance operation came in below average for the second-quarter of 2021, COVID-19 had an adverse effect on its life & health (L&H) business in the period.

For the second-quarter of 2021, Munich Re has announced a preliminary net profit of €1.1 billion, which is up on the consensus of €808 million and also 90% higher than the €579 million recorded for the prior year Q2.

During the quarter, the reinsurer’s major-loss expenditure in P&C was below average primarily because of comparatively lower nat cat losses. Also, in P&C, Munich Re notes that COVID-19 related losses were in line with expectations for Q2 2021.

However, in L&H reinsurance, losses from the pandemic “clearly exceeded the expectation mainly due to the high mortality rate in India and South Africa.”
At ERGO, the global reinsurer’s primary insurance arm, Munich Re has reported only minor effects resulted from COVID-19 in Q2.

In Q1 2021, Munich Re reported COVID-19 related losses within P&C reinsurance of roughly €100 million, as well as losses of €167 million in L&H reinsurance.

This recent announcement from Munich Re is preliminary and so details around losses are limited. But while it will become clearer when the reinsurer publishes its Q2 2021 results in full, the pandemic does continue to dent the company’s underwriting, albeit now more so on the L&H side than the P&C side.

For the first-half of the year, Munich Re has announced a result of €1.7 billion, which is an improvement on the first-half of 2020, when the firm booked an additional €700 million of COVID-19 related losses.

With its H1 2021 result at €1.7 billion, Munich Re says it’s on track to meet its annual target of €2.8 billion, despite there being a greater chance of it missing its €400 million target set for the technical result in its L&H reinsurance business.

Patoma Admin by — July 21, 2021 in Insurance 0
Kenyan insurance market generates $2.1bn gross written premium

By Favour Nnabugwu

 

Kenyan insurers and reinsurers faced challenging economic factors in 2020 which made the year a difficult one as the market generated KSH233bn ($2.1bn) of gross written premium, according to a new report from AM Best.

However, Kenya’s relatively stable economy and strengthening regulatory environment, compared with other markets in sub-Saharan Africa, are expected to continue to facilitate the development of its insurance sector.

AM Best’s new report, Price Competition Inhibits Growth Potential of Kenya’s Insurance Market, notes that while low insurance penetration by international standards means the market has good long-term growth potential, stiff competition has led to price undercutting in recent years, hampering premium growth and contributing to the sector’s underwriting losses.

There are more than 50 licensed insurers operating in Kenya, and in 2020, the regulator reports, the market generated KSH233bn ($2.1bn) of gross written premium, representing growth of 2 percent compared to the previous year (6 percent).

In the five years to 2020, GWP grew on average 6 percent per year, however inflation at between 5 percent and 8 percent dampened that growth.

Meanwhile market conditions have remained soft, which has also kept a lid on real GWP growth. However, AM Best warns that the market is saturated, with 35 companies competing for circa $1.2bn of premium in the non-life segment and no single insurer having a market share greater than 8 percent

The number of non-life policies in force grew an average of 13% per annum between 2016 and 2019 – 7% higher than GWP growth in the same period, implying a growth in the total sum insured by the market has not resulted in a corresponding growth in revenue.

Patoma Admin by — July 20, 2021 in Insurance 0
AXA Mansard emerges best health insurance company in Nigeria

By Favour Nnabugwu

 

AXA Mansard Health Limited, has announced that it has emerged as the Best Health Insurance Company in Nigeria, at the just concluded 2021 International Finance Awards.

AXA Mansard Health has a 24-hour call center, a team of highly trained and dedicated professionals, service portals at all AXA Mansard Welcome Centres nationwide and has deployed state-of-the-art technology to attain operational excellence while contributing to prompt service delivery and overcoming of challenges being encountered in the Nigerian health insurance industry.

The Company is today positioned as the No 1 health management organization in Nigeria providing health related services to both individuals and corporate bodies.

Speaking on the award, Chief Customer and Marketing Officer, AXA Mansard, Jumoke Odunlami said, “We are indeed elated that our continuous strive for excellence is once again being recognised globally as it has always been here in Nigeria.

At AXA, We Act for Human Progress by protecting what matters. At AXA Mansard Health, we have never been more convinced about this purpose (which we consider a higher calling) than during a period like this with the pandemic ravaging the world. Our Customers and Nations health and wellbeing will therefore always remain a major priority for us”.

AXA Mansard Health Limited has several products to ensure that our customers are truly protected by providing a world-class health cover for its customers. The products are flexible enough to suit one’s needs whilst also providing other value-added benefits such as 24 hour dedicated Telemedicine service, home vaccination service, home laboratory service, free home delivery of special medications, partnership with healthy eating restaurants, smarter budget-friendly discounts on healthy meals and many more.

AXA Mansard Health Limited is the Health Maintenance Organization (HMO) arm of the AXA Mansard group of companies. The HMO is geared to promote her members’ wellbeing.

It is able to serve all clients across the country virtually and has established functional offices in Lagos (the head office), Abuja, Port-Harcourt, Enugu, with ongoing plans to open offices in other locations.

Patoma Admin by — July 20, 2021 in Insurance 0
Zimbabwe enforces anti money laundering, combat finance of terrorism guidelines on insurers

By admin

 

 

THE Insurance and Pensions Commission is stepping up efforts to ensure that local players are compliant with anti-money laundering and combatting the financing of terrorism (AML/CFT) reporting obligations.

The insurance sector is typically vulnerable to white-collar crimes due to high levels of financial flows.

The local pensions and insurance industry is heavily invested in the Zimbabwe Stock Exchange (ZSE), on money and property markets, and is also expected to be a big player on the Victoria Falls Stock Exchange (VFEX), which can be dangerously exposed if linked to white-collar crimes

The drive comes as the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) Second Round Mutual Evaluation Report for Zimbabwe identified low AML/CFT awareness among non-bank financial institutions as major deficiency for the pensions and insurance industry.

IPEC Commissioner Dr Grace Muradzikwa, said they have already set up a dedicated unit in this regard, indicating that one of its key functions is to provide industry with the relevant information on AMT/CFT issues.

“As the regulator, we are now equipped to fully assume our role of supervising reporting entities to ensure compliance with AML/CFT reporting obligations. As such, we have established an AML/CFT unit, which will be headed by a manager.

“We are currently in the process of staffing the unit. For the industry, the starting point is for you to be aware of your obligations on AML/CFT, as well as the understanding of Money Laundering and Terrorism Financing risks that you face,” she told a recent engagement with industry players.
“Therefore, understanding risk is the cornerstone for an effective AML/CFT programme.”

Zimbabwe’s AML/CFT legal framework consists mainly of the following pieces of legislation: the Money Laundering and Proceeds of Crime Act [Chapter 9:24]; Bank Use Promotion Act [Chapter 24:24]; Suppression of Foreign and International Terrorism Act [Chapter 11:21]; Statutory Instrument 76 of 2014: Suppression of Foreign and International Terrorism (Application of UNSCR 1267 of 1999 and UNSCR 1373 of 2001) Regulations, 2014; and Statutory Instrument 56 of 2019: Suppression of Foreign and International Terrorism.

Because of the role and structure of insurance and pensions business, players in the sector typically operate by moving funds from parties with excess capital to parties needing funds.

All things being equal, this financial intermediation works to create efficient markets and lower the cost of conducting business. But it also makes the sector a target for money laundering.

According to IPEC director for insurance and microinsurance, Sibongile Siwela, “from a regulatory point of view, institutions are expected to have in place an AML/CFT compliance programme that is supported by policies, procedures and controls; compliance function and AML/CFT compliance officer at appropriate level; staff training programmes; and independent audit.”

In 2020, the regulator concluded a Sectoral Risk Assessment, which has helped to inform the current risk-based approach to Anti-Money Laundering and Combatting of Financing of Terrorism supervision.
Money laundering has over the years become a potent threat to economies across the globe due to the rising volumes and sophistication of white-collar crimes.

Patoma Admin by — July 19, 2021 in Insurance 0
WAICA Re underwriting profit rise by 77% in 2020

CAPTION:

L – The Director-General, WAICA Secretariat and Directorate, WAICA Reinsurance Corporation Plc, Mr. William B. Coker; Director, Mr. Adeyemo Adejumo; Company; Secretary, Mrs .Patricia Fomba; Group Chairman, WAICA Reinsurance Corporation Plc, Kofi Duffuor; Group Managing Director/CEO, Abiola E. Ekundayo, and a Director, Mrs. Senor Thomas-Sowe, during the corporation’s annual general meeting in Lagos

By Favour Nnabugwu

The West African Reinsurance Corporation (WAICA Re) has announced that its underwriting profit grew from $5.0 million in 2019 to $8.8 million in 2020, a growth rate of 77 percent

The company at the 8th Annual General Meeting (AGM) held virtually at the weekend recorded a net claims of $30.5 million in its 2020 financial year, which translated to 63 per cent increase from the $18.7 million it recorded in 2019.

The claims were incurred across most of the nine countries it is operating from. The nine countries include; Nigeria, Ghana, Liberia, Kenya, Sierra Leone, Tunisia, The Gambia, Zimbabwe and Côte d’Ivoire.

The Group Chairman, Kofi Duffuor, added that, facultative claims contributed 59 per cent of the total claims paid whilst treaty claims was 41 per cent, stressing that, the net incurred loss ratio increased to 39 per cent in 2020 compared to 31 per cent in 2019.

Underpinned by increase in business volumes and increased claims reserve, net claims incurred increased by 63 per cent to $30.5 million in 2020 from $18.7 million in 2019. Facultative claims contributed 59 per cent of total claims paid whilst treaty claims was 41 per cent. Consequently, the net incurred loss ratio increased to 39 percent in 2020 compared to 31 per cent in 2019.

To him, “Net commission expense rose to $23.5 million in 2020 from $17.6 million in 2019, representing 33 percent growth largely as a direct function of growth in earnings. The commission ratio also remained flat at 30 percent in line with both company trend and industry averages.”

Operating expenses, he said, decreased year on year by 4 per cent, given management efforts to reduce cost, hence, operating expenses fell to $17.1 million in 2020 from $18.2 million in 2019 even as expense ratio equally fell to 22 per cent in 2020 from 31 percent in 2019.

Overall, combined ratio improved to 91 percent in 2020 having fallen from 93 percent in 2019, he pointed out.

Stressing that WAICA Re has continued to display a strong underwriting profitability as a result of sound underwriting and risk selection, he noted that, technical profit grew from $23.2 million in 2019 to $26.2 million in 2020, representing a 13 per cent growth.

“Underwriting profit grew from $5.0 million in 2019 to $8.8 million in 2020, a growth rate of 77 percent. Whilst Technical margin fell from 40% in 2019 to 33 per cent in 2020, underwriting margin improved from 9% in 2019 to 11 percent in 2020,” he pointed out.

Stating that the reinsurer’s investment and other income witnessed an increase of 14 per cent from $3.4 million in 2019 to $3.9 million in 2020 even though there was a general fall in interest rates especially in Anglophone West Africa, he added that, return on investment fell from 4 percent in 2019 to 3.7 per cent in 2020.

To him, “management continues to review the investment portfolio to help improve the return on investment”

“The above Profit and Loss analysis shows that, the major drivers of profit in 2020 were the growth in premium income, improved underwriting performance and a reduction in management expenses.”

Improved premium collection, he stressed, enabled the group to increase cash and investment assets by 29 per cent to $114.9 million in 2020 from $$88.9 million in 2019.

The group’s cash and investment assets, he stated, accounts for 62.5 per cent of total balance sheet size. Liquid assets increased to $105.2 in 2020 from $79.3 million in 2019 giving the group a strong liquidity metrics compared to claims and technical liabilities,he said.

He announced to the shareholders that the board of directors recommended a dividend of 0.0814 per share amounting to $4,000,000 (2019; $3,000,000).

This dividend will be paid to shareholders whose names appear in the register of the Corporation as at the date of the AGM, he assured.

The board of the firm, he said, recommended the issuing of additional capital of 10 million shares in 2020 by a rights issue at a price to be determined by its financial advisors.

“There was also the intention to invite strategic investors to take up shares in the Corporation. These decisions were suspended due to the COVID-19 pandemic and the uncertainties that surrounded it.

“This year we would like to carry out the exercise as it will strategically position the corporation to underwrite larger businesses especially in the oil and gas sector among others, expansion of our ICT and to ensure a strong balance sheet that will make us more competitive in the reinsurance market,” he said.

Patoma Admin by — July 18, 2021 in Insurance 0