Insurance 32
Daily Times Nigeria Tuesday, December 30, 2014
Wapic attains A.M. Best Ratings The group reported consolidated gross written premiums of NGN 3.0 billion) in 2013
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.M. Best has assigned the financial strength rating of B- (Fair) and the issuer credit rating of “bb-” to Wapic Insurance Plc (Wapic) (Nigeria), the operating holding company of the Wapic group of companies. The outlook assigned to both ratings is stable. The ratings of Wapic reflect its developing business profile in the Nigerian market, tempered (nearterm) earnings prospects due to its high expense base and solid risk-adjusted capitalisation. Wapic is a small insurance group that has been operating under new management since 2013, following its divestment by Access Bank. Wapic is a domestic non-life entity, which wholly owns a life insurer in Nigeria and a nonlife insurer in Ghana. The group reported consolidated gross written premiums of NGN 3.0 billion (approximately USD 25 million) in 2013. Under Wapic’s new strategy, rapid premium growth in excess of 25% per annum is anticipated in the medium-term as the group seeks to strengthen its competitive position by developing its profile within the corporate segment of the market and increasing its underwriting of compulsory lines. The successful execution of Wapic’s strategy is largely dependent on the group increasing its profile in the low penetrated and highly competitive markets of Nigeria and Ghana, and requires significant development of its direct distribution channels. As such, A.M. Best believes that Wapic faces challenges in implementing its plans and will continue to monitor the progression of this expansion over the medium term. Despite the relatively low claims environment in Nigeria, Wapic’s projected earnings are expected to be dampened by its substantial fixed costs as the group establishes its operating infrastructure to support expansion.
L-R: Chairman, Sovereign Trust Insurance Plc, Ephraim Faloughi; Managing Director, CODROS Capital Limited, Wale Agbeyangi, and Vice Chairman, Sovereign Trust Insurance Plc, Oluseun Ajayi, at the signing ceremony of the proposed Rights Issue of the Underwriting Firm billed to commence in January, 2015
Insurance companies shine at Nigerian risk award
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he 2014 edition of the Nigerian Risk Awards (NRA) organised by Conrad Clark Nigeria Limited in partnership with Business Day, Thomson Reuters and the Institute of Risk Management UK (IRM) has insurance companies and operators outmuscling
themselves to win awards under different categories. Mansard Insurance emerged as winner in the Insurance and Pensions category for the second time running, with Goldlink Insurance Plc and Africa Reinsurance Corporation as 1st and 2nd Runner-Ups respectively.
The Business Day Risk Manager of the Year was won by Mr. Adewale Akinwale of the Nigerian Aviation Handling Company, with Mr. Omokayode Oluwole (Mansard Insurance) and Mr. Olaniyi Olalemi (Enterprise Bank Ltd.) being 1st and 2nd runner-ups respectively. Mr. Kunle
Odetola-Odeleye of Old Mutual Nigeria carted home the Young Risk Manager of the Year award and the 1st Runner-Up was Mr. Jolaolu Fakoya of Africa Reinsurance Corporation. Speaking at the award ceremony in Lagos, Founder, Nigerian Risk Award and CEO, Conrad
Insurers shun micro-insurance licences
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here are strong indications that none of the insurance companies or stakeholders in the country have applied for micro insurance licence from the National Insurance Commission (NAICOM). Instead, majority of the operators only applied to NAICOM to have micro insurance as one of their products, while some creates a special department for micro insurance business in their firms. Experts believe the non-application for stand-alone microinsurance licence may not be unconnected to the high capital base required for such businesses. The Managing Director, Risk-
guard-Africa (NIG) Limited, Chief Yemi Soladoye, who was worried about the terms outlined by NAICOM, suggested the use of 5-tier operational model based on capital requirement to secure widest coverage of Micro insurance in Nigeria. According to him, those operating on a National basis should have N350 million capital base; those on regional N90 million; those on state level N40 million; local government N10 million and unit with N5 million capitalisation. He said the unit and regional approach will reduce cost of doing business, as they build modest office, while appropriate location must all be specified per unit
Soladoye
of office outlet by the regulator. “Since the existing Insurance operators do not need any new capital requirement to operate Micro insurance, it is suggested that the Indian model of forcedfamiliarity and the China model of conditional expansion must be explored”, he pointed out. Soladoye noted that the first set of micro insurance operators could be generated from the smallsized Insurance brokers, weak Microfinance Banks (MFBs), and experienced agents of the existing underwriters. This approach, he said, would make room for consolidation and appropriate learning time, putting in place the necessary strategies, goals and regulatory frameworks.