Insurance operators in Nigeria have been blamed for the National Insurance Commission’s (NAICOM) failure to meet its projection of N1 trillion, with NAICOM admonishing the insurance operators for their irrational behaviour.
The Deputy Commissioner for Insurance, Technical, Sunday Thomas said the behaviour of insurance companies regarding the collection of the required funds prevented NAICOM from achieving the N1 trillion premium income projected target for the industry
Factors that worked against the projection
During a seminar held in Lagos, Thomas said backdoor dealings by Insurance operators affected the projection, giving instances when operators sell third-party motor insurance lesser than the required amount.
He stated that the N1 trillion projection was made under certain circumstances, with many assumptions as well. And one of the assumptions identified by the commission is the effective enforcement of compulsory insurances which Insurance operators failed to abide by.
In comparison to the banking industry, Thomas said Insurance operators violate laws to hurt their business, while the banking institution violates the laws for their own advantage. Adding that this irrational behaviour resulted in the market producing N200 million premium income.
“If they decide to charge N5000, what is the market likely to produce? I am just telling you why we are not at N1 trillion. I did a comparative analysis between the banking sector and the insurance sector. The Central Bank of Nigeria will put a cap on interest rate for certain sector. The banks would violate this rate, not by reducing the rate, but by increasing the rate, using other terminology like administrative fee. If CBN for instance says the rate should not be more than nine per cent, the banks would charge 12 per cent.
“There was a time that CBN also gave a directive to the banks to have branches, even at rural areas. The banks would violate such directive and pay the penalties for not having branches in those areas because they consider these areas as not being viable.
“In my industry, we also commit the same offence by violating the law. But rather than do it to their own advantage, the operators would reduce it, I just don’t get it. There was a point in this market when 10 per cent for comprehensive insurance was sacrosanct, but later, it came down to five per cent and that became the standard. But you and I also know that there was a point that some operators were charging as low as 1 per cent,” he said.
Crackdown on defaulters
Despite his condemnation of the Insurance operators, Thomas said the regulator can’t go after all operators, The Nation reported. But stating that the illegal activities of Insurance operators are bewildering to him, as he’s shocked an individual would purposely hurt their business.
Meanwhile, Thomas said to have insurance operators pay their claim, government agencies must pay the right premium because NAICOM is committed to taking the industry to lofty heights. Adding that the commission has taken the responsibility of ensuring the Federal Government comply with industry rates and others.
“The Federal Government through the office of Head of Service reach out to the commission. They told us to be considerate, that the budget has been passed, we insisted that we will not change our position and that is why you find today that government pay the rate the commission has stated,” he added.
Tiktok’s In-App revenue surges amid lockdown
ByteDance Ltd’s brainchild, TikTok, together with Douyin ranking tops globally on mobile apps with the highest revenue generated for the month of April.
The meme-making business has proven to be worth all the fuss, with TikTok, as well as its Chinese twin app, Douyin, ranking tops globally on mobile apps with the highest revenue generated for the month of April.
Sensor Tower, notes that just in the first quarter of this year, ByteDance Ltd’s brainchild, TikTok, together with Douyin which caters to the Chinese market, generated 315 million downloads globally, from the 187 million it had just a year earlier.
The ranking, which was based on their in-app purchases, reveal a tenfold increase, as the companies garnered a whopping $78 million in revenue. The Chinese market is said to have contributed 86.6% of Douyin’s revenue, followed by the U.S market which contributed 8.2%.
This places them ahead of older names like Netflix & YouTube. As opposed to using subscriptions like these established brands, TikTok and Douyin allow users to purchase virtual currency to spend on their favorite content creators.
(READ MORE: Does YouTube stand a chance against TikTok?)
While ByteDance is exploring the world of online commerce, it continues to rely on advertising as its primary income source. However, Emarketer projects that more than 75 million US social network users will make at least one purchase from a social channel in the year 2020.
Sanwo-Olu to virtually inaugurate projects as he presents scorecard of first year in office
Some of the projects to be commissioned will be done virtually, while a few will be done on-site.
Lagos state governor, Babajide Sanwo-Olu, will virtually inaugurate housing, education, and road projects on May 29, as part of activities to mark his first year in office.
According to a report by NAN, the projects are part of the government’s efforts to renew infrastructure in critical sectors and to make the commercial centre a smart city.
Some of the projects to be commissioned will be done virtually, while a few will be done on-site.
Lagos state Commissioner for Information and Strategy, Mr Gbenga Omotoso, listed some of the projects in an official statement. He said:
”In the education sector, Sanwo-Olu will conduct virtual inauguration of completed classroom blocks in Maya Secondary School, Ikorodu; Eva Adelaja Junior School, Bariga; and Saviour Primary School, Ifako-Ijaiye, among others.
“Virtual inauguration of completed works such as the Concrete Jetty in Baiyeku, Ikorodu, Aradagun-Ajido- Epeme Road in Badagry, and the Maryland Signalisation project also form part of the itinerary to commemorate the anniversary.”
Omotoso also stated that the Governor would inaugurate the 360-unit Lagos Homes in Ikorodu, and then visit Igbogbo Baiyeku IIB Estate, Lekki, and the Courtland Villas on Femi Okunnu Estate during the week.
Plans for celebrating Children’s Day
In a related development, Governor Sanwo-Olu will deliver an address on Wednesday May 27 to mark the children’s day celebration, and the 53rd anniversary of Lagos state.
Omotoso, however, noted that all celebrations would be kept on the low in reflection of the current challenges and realities of the COVID-19 pandemic.
Presenting one-year scorecards
The activities for the week are expected to begin with press briefings at J.J.T Park in Alausa on May 27, where members of the State Executive Council will present their scorecards in line with the six pillars of the state’s T.H.E.M.E.S Agenda.
According to the information commissioner, there will be two sessions of press briefings daily from May 27 to June 3, as the Governor considers it expedient to render a stewardship account of the last one year.
“Three special publications highlighting the achievements of the Babajide Sanwo-Olu administration and testimonies of beneficiaries of various initiatives of the government are slated for presentation to the public by the governor and his Deputy, Dr Obafemi Hamzat,” he added.
Central banks digital currencies pose a threat against the U.S dollar
In general, digital currencies could weaken the power of U.S. sanctions and the ability of the U.S. Treasury to watch illicit financial flows.
A new report by America’s biggest bank, JP Morgan Chase, said the U.S dollar is being faced with a major threat as many central banks’ digital currencies continue to gain traction.
Analysts, including Josh Younger, the head of U.S. interest-rate derivatives strategy and Michael Feroli, the chief U.S. economist, wrote in a report saying this:
“There is no country with more to lose from the disruptive potential of digital currency than the United States.
“This revolves primarily around U.S. dollar hegemony. Issuing the global reserve currency and the medium of exchange for international trade in commodities, goods, and services convey immense advantages.”
Aditi Kumar and Eric Rosenbach also recently penned an opinion piece for Foreign Affairs in which they noted that “Just recently, America’s arch-rival China became the first major economy to carry a real test of a national digital currency.”
In general, electronic currencies could weaken the power of U.S. sanctions and the ability of the U.S. Treasury to watch illicit financial flows. A digital Chinese currency (yuan) combined with China’s developed electronic payment systems may give China more future influence than it ever bargained for.
What Nigerians should know about Digital currencies
A digital currency is a cash balance recorded electronically on a store value card or other physical devices, which could someday replace the physical notes of the naira, for instance.
Digital currencies can be decentralized, that is where the control over the cash supply can come from diverse sources. Digital currencies can also be centralized, where there is a midway point of control over cash supply, just like the way central banks work.
Although JP Morgan does not see the U.S dollar being overthrown as the world’s reserve currency anytime soon, experts warned that the U.S dollar dominance could weaken. This is because its processing trade settlement and the SWIFT system could make it more vulnerable.
The American bank continued by saying:
“Offering a cross-border payment solution built on top of a digital dollar would, particularly if designed to be minimally disruptive to the structure of the domestic financial system, be a very modest investment to protect a key means to project power in the global economy,
“For high-income countries and the U.S. in particular, digital currency is an exercise in geopolitical risk management.”
Federal Reserve Chairman Jerome Powell said months ago that the Federal Reserve was taking a critical view on the issues regarding a digital currency.