The African Trade Insurance Agency (ATI) held its 17^thAnnual General Meeting last week.

The sustained commodity price decline and current geopolitical uncertainties took centre stage. Meeting participants urged African governments to intently focus on growing intra-African trade and diversifying their economies away from commodity reliance in order to reduce vulnerability to external shocks.

With sub-Saharan Africa’s GDP growth rates expected to hit a record low of 1.5% depressed commodity rates are seen to be one of the major drivers with export producers accounting for two-thirds of the region’s growth.

Set against a backdrop of increased geopolitical uncertainties that could prove challenging for improved growth, H.E. Patrice Talon, President of the Republic of Benin and Hon. Henry Rotich, Cabinet Secretary, National Treasury of Kenya delivered opening addresses that pointed to ATI as a vital partner in supporting Africa’s journey toward diversification, self-reliance and more sustainable growth.

In 2016, ATI facilitated financing of trade and investments in Kenya valued at close to USD800 million which represents around 1.2% of Kenya’s GDP. Similarly, in ATI’s two newest member countries, Ethiopia and Zimbabwe, the company supported USD400 million worth to trade and investment to these economies.

“This is a very significant contribution to our economy. It demonstrates real benefit because these financial flows could not have been realised without the support of ATI,” noted Hon. Rotich.

During the opening ceremony, which attracted leaders from the public and private sectors across Africa, ATI announced its 2016 results. The pan African investment and credit risk insurer posted record results for the sixth consecutive year.

ATI has moved from being loss making as recently as 2011 to posting a positive net result representing a 36 percent increase over 2015.  Among other factors, ATI attributes this success to stronger partnerships with African governments, who increasingly see the value of ATI to their growth and development objectives.

In 2016, ATI’s impact in Africa and globally continued to increase. In the last six months, the company attracted new members Côte d’Ivoire, Ethiopia, Zimbabwe and earlier in 2016, the UK’s export credit agency, UKEF.

ATI also insured USD4 billion (KES405 billion) worth of trade and investments into its African member countries while backing strategic projects such as the USD159 million loan from the African Development Bank to support Ethiopian Airline’s fleet expansion.

ATI also underwrote the first deal in a non-member country in Angola in Q-1 2017, reflecting the company’s new pan-African mandate.

During the closed meeting of the General Assembly shareholders discussed the company’s 2016 annual accounts and financial statements in addition to recovery of funds from defaulting member countries, the establishment of constituencies that will accommodate ATI’s regional expansion and election of Directors and Alternate Directors.

ATI is a multilateral investment insurer that was formed by COMESA member countries with the support of the World Bank in 2001. Since then, ATI has expanded to include countries in the ECOWAS region.

The company provides a range of products that mitigate risks impeding the flow of investments and trade to and within Africa. As of 2016, ATI has cumulatively supported USD25 billion (KES2.5 trillion) worth of trade and investments into its member countries since inception.

ATI’s Key 2016 Results:

• Volume of Business Supported Since Inception: USD25 billion (+ 16%)
• Insured Trade & Investments (Gross Exposure): USD1.9 billion (+ 16%)
• Gross Written Premium: USD29.5 million (+ 27%)
• Net Earned Premium: USD12 million (+ 20%)
• Profit: USD6.4 million (+ 36%) – On a comparable basis
• Cost Ratio: 35% (-30%)
• Return on Equity: 3.2% (+ 28%)
• Shareholders’ Capital: USD202 million (+ 12%)
• Rating (S&P): A/negative

L-R: Deputy President, Nigerian Council of Registered Insurance Brokers (NCRIB), Mr. Shola Tinubu; Chief Executive, British Insurance Brokers Association (BIBA), Mr. Steve White; NCRIB President, Mr. Emmanuel Okunoren and Executive Secretary, NCRIB, Mr. Fatai Adegbenro at the ongoing BIBA Conference in Manchester, United Kingdom.

The new Managing Director of the Nigeria Export-Import Bank (NEXIM), Mr Abubakar Bello yesterday ceremonially took over the reins of leadership of the Bank from Mr. Bashir M. Wali, who was the Acting MD till Thursday, April 20, 2017.

The handover ceremony was a mere formality as the new team headed by Mr. Bello had resumed at the Bank with immediate effect on April 21st upon their appointments by President Muhammadu Buhari as communicated to the NEXIM Bank by the Office of the Secretary to the Government of the Federation (SGF) on Thursday, April 20th, 2017.

Mr. Eddie Efekoha, Chairman, Nigerian Insurers Association (NIA) says the insurance industry in West Africa needs uniform regulation to create standard for insurance market across member states in West Africa, promote technical knowledge sharing amongst member state underwriter and regulators, standardise certain insurance product package and benefits and promote confidence and business sharing or exchange among players within the sub region.

Efekoha said in a paper he delivered at the 2017 WAICA conference in Banjul, The Gambia that other benefits include need to increase  the existing low level penetration, have a harmonised regulatory standard, reduce premium flight outside the region and need to have an insurance framework to support regional business transactions

He said however that a harmonied regulatory regime in the region could face challenges due to

differences in the soundness of national macroeconomic and financial sector policies, nations are at different levels in the development of public infrastructure, effectiveness of market discipline and efficiency in financial markets differs within the region, absence of a single currency, governance structure of the various national regulatory system are not the same, state of development of the legal systems are at various levels and differences in level of technological growth.

“The insurance sector represents a significant part of the financial system and plays an important role in the economy. Regional business walls in the supply of insurance products are increasingly being broken down, institutions and individuals may want to leverage arbitrage opportunities hence the need for regulation. Regulation of insurance business in the West Africa sub region is largely underdeveloped. There are basic differences in insurance supervisory standards within the sub-region.”

Efekoha said the objectives of insurance regulation includes minimising and where possible prevent anything that routinely causes insurers to go out of business and unable to pay claims, prevent unfair and deceptive policies and practices since insurance contracts promise to make certain payments under certain conditions at some point in the future, ensure that adequate information are available to consumers of  insurance products and to encourage the availability of insurance products that have been made compulsory.

He recommended strengthening the individual countries’ regulatory structure through total autonomy,

ensure financial independence of the regulatory system in each of the countries within the sub-region while regulatory institutions should build the needed human capacity for effective market surveillance.

“There must be deliberate efforts to foster relationship within the sub region financial sector. Trade Associations must be strengthened to play a collaborative role in the harmonisation process. Technical capacity requirement amongst member states must be standardised. Build on the ECOWAS Brown Card System. Borrow a leave from the francophone countries, already have a harmonised regulatory framework and need to build African market for African. “

The on-going reforms in the Nigerian Insurance sector being driven by the industry regulator, the National Insurance Commission (NAICOM) would increase industry capacity for big ticket accounts, greater contribution to GDP and more value creation for shareholders.

According to Dr Pius Apere, Managing Director/CEO, Linkage Assurance Plc “one of the reforms, ‘Risk Based Capital Regime in the Risk Based Supervision Framework’ would further redefine the way insurance is delivered in this country and offer more rewarding benefits to the generality of Nigerians.

Dr Apere made the remarks at the Nigerian Stock Exchange during the closing gong ceremony on the floor of the NSE.

Apere who led other directors and executive management to the NSE said insurance in Nigeria is now better positioned to reward investors, as capacity for business has grown as well as increased consumer awareness.

“The Risk-based Capital supervision (RBS) about to be introduced by the insurance regulator (NAICOM) in the near future, when fully implemented, will increase the need for capital injection within the Nigerian insurance industry in order to underwrite more special and/or large risks.”

“This is likely to increase mergers and acquisitions within Nigerian insurance industry. Consequently, the drive to inject new capital (through foreign and local investors) will surely increase the trading activities of most insurance companies’ shares/stocks on the Exchange.”

He told stockbrokers and management of the NSE that Linkage Assurance Plc has repositioned to deliver increased value to all stakeholders, assuring its investors that the company going forward would continue to enhance returns on investment for its shareholders.

Apere further informed the stockbrokers that the future looks bright for the company, given the result of its restructuring which is beginning to impact on the company’s overall performance.

“Linkage Assurance Plc is currently underwriting only non-life insurance business with 14 branches operating across the regions in Nigeria. The Board of Linkage’s current strategic direction is to diversify the company’s business activities in order to achieve a sustainable growth in gross premium income (GPI) thereby increasing market share and adding more value to its shareholders in the nearest possible future.”

He also stated that the strategic business plans of the company may include underwriting of life insurance business in order to become a composite insurance company leading to enhancement of its competitive advantage.

“The above would require new capital injection in order to achieve this strategic decision. Thus, we are likely to engage the services of the stock brokers to raise the required capital.”

Linkage Assurance Plc recently unveiled seven new products as part of its strategy to deepen penetration and gain larger market share.

“Linkage has recently repositioned itself to demonstrate innovation and creativity by designing and launching budget-friendly insurance products in order to deepen the insurance penetration required within the Nigerian insurance industry, Apere said.

“We are poised to become more competitive and that is why we have developed these products to meet customers need.”

The new products include Linkage Estate Insurance Plan; Linkage Events Insurance Xclusive; Linkage SME Comprehensive Plan; Linkage Shop Insurance Cover; Linkage Citadel Shield Plan; Linkage Purple Motor Plan and Linkage Third Party Plus.

Law Union & Rock Insurance Plc paid claims of N1.5 billion in 2016 and another N380 million in the first quarter of 2017 to underline its corporate commitment to settlement of claims as part of its customer-friendly policy. The company also has a 5-day claim payment policy for effective and efficient claims processing regime for the benefit of customers.

Mr. Jide Orimolade, Managing Director/CEO of Law Union & Rock Insurance said yesterday that besides meeting obligations to policyholders, the company is also committed to adding value to customers through strategic innovation that delivers seamless, convenient and stress-free business ecosystem.

“Our strategic innovation driven majorly by ICT has eliminated financial risk in the payment process, ensures product deployment with key features that guarantees edge over the competition and has empowered us to grow our retail business production by nine percent via seamless technology despite the prevailing economic constraints in the market.”

In the 2016 business year, Law Union & Rock reported 100 percent growth in Profit After Tax from N280.9 million in 2015 to N561.8 million while claims ratio dropped from 67 percent to 49 percent in the same period under review. The underwriting result grew by 10 percent to N1.2 billion from N1.1 billion in 2015.

Orimolade said the focus of the company in 2017 is to grow the company’s gross premium written by 50 percent, retain 90 percent of existing customers, grow direct and retail businesses, improve relationship with brokers, achieve improved credit rating from A- to A+ by GCR and become the preferred first choice underwriter in general business in Nigeria.

“The second focus of the company is on process improvement. We are committed to improve our service delivery, improve brand visibility nationwide and develop new products in the area of retail and agricultural insurance. The company is strategically positioned to consolidate on the good financials achieved in 2016 to drive its operations in 2017.”