Consolidated Hallmark Insurance (CHI) has taken steps to increase its footprint in the insurance market in Nigeria after it received a nod from the National Insurance Commission (NAICOM) to establish another subsidiary.
The new subsidiary will have its business focus on micro life assurance. The name of the new insurance firm is CHI Micro Insurance Limited. The parent company has been operating a General Insurance business line.
The future is micro insurance: Managing Director, Eddie Efekoha, said the future is in retail business and micro insurance. He explained that these two business lines are needed if the general population in Nigeria are to be attracted by the sector.
“We are set to take off with a robust network of retail and agency team that have contributed and continue to contribute immensely to the growth of the parent company. The future is in retail business and micro-insurance, if we are to reach the mass of the Nigerian people with quality, reliable and affordable insurance solutions. This low-income segment has remained largely untapped and we are ready to give it our best shot.”
About the new business line: Micro insurance is created for the low-income segment of the population. It is a key insurance package underwriting firms believe could help increase the penetration of insurance in the Nigerian population, especially the low-income class that shy away from insurance.
It is a method NAICOM intends to deploy to boost insurance usage within the country; that’s why it’s more affordable than other insurance packages. The long-term plan is to have Micro Insurers operating in over 700 local government areas of the country. Currently, insurance firms operate mostly in urban areas, so micro insurance will bridge the gap between urban and rural areas.
The minimum capital base for microinsurance operators was pegged at N15million for Life operators at the Unit level and N25 million for General Business operators while N200 million and N400 million minimum Capital Base was fixed for Life and General Business operators at the national level. The insurance premium can be as low as N1,000 to upwards of N5,000.
Expansion to create jobs: It was learnt that all that is needed to begin operation has been put in place, with the company just left with recruitment of personnel for the office. With the unemployment level projected to increase this year, the spin-off micro-insurance business of CHI is a welcome development.
“The business office for the micro insurance company has since been acquired and ready for occupation by the new team. The business will leverage on technology and strategic partnerships to give its customers an exciting insurance services experience.”
According to Nigeria Employers’ Consultative Association (NECA), the rate of unemployment in Nigeria may rise to 33.5 per cent this year, from the current rate pegged at 23.1%.
Nigeria only hit 56% of its target revenue in first five of months of 2020
Nigeria’s earnings in the period were N1.48 trillion which is 56% off its main target.
Nigeria’s Minister of Finance, Zainab Ahmed revealed that Nigeria was only able to meet 56% of its target revenue from January to May as the global oil price crash affected government revenue due to the COVID-19 pandemic.
Nigeria’s earnings in the period were N1.48 trillion which is 56% off its main target, crude oil revenues accounted for half of Nigeria’s revenues, while non-oil revenues made up the rest in the first 5 months of the year.
On Friday, President Muhammadu Buhari signed the new 2020 revised budget of N10.8 trillion with the crude oil benchmark reduced from $57 per barrels in the earlier budget to $25 in the new budget.
The Minister said the budget had to be revised because of the effects of the COVID-19 pandemic on Nigeria’s economy. She added that Nigeria’s crude oil production would be an average of 1.86 million barrels per day next year and rise to 2.09 million the following year.
“Although Nigeria’s total production capacity is 2.5 million barrels per day, current crude production is about 1.4 million barrels per day — in compliance with the Organization of the Petroleum Exporting Countries’ production quota – and an additional 300,000 barrels per day of condensates, totaling about 1.7 million barrels per day,” she said.
African Union begins COVID-19 vaccine trial group
CONCVACT plans to capture more than ten late-stage vaccine trials at the earliest.
The African Union Commission just recently facilitated a program called the new Africa Centres for Disease Control and Prevention (Africa CDC) Consortium for COVID-19 Vaccine Clinical Trial (CONCVACT).
The program is part of the Africa Joint Continental Strategy for stopping the deadly COVID-19 onslaught that has disrupted human activities. The goal is to prevent severe COVID-19 infections and deaths in African countries, reduce the economic damage caused by the pandemic, and help minimize the general disruption to everyday life.
Quick fact about COVID-19: Although for some individuals, the COVID-19 virus causes only mild illness, it can make other individuals seriously ill. The disease can be very fatal, especially among older individuals, and those with compromised immunities (such as diabetes, high blood pressure, or heart problems) appear to be more susceptible.
South Africa’s leader, Cyril Ramaphosa, said, “Success in developing and providing access to a safe vaccine requires an innovative and collaborative approach, with significant local manufacturing in Africa.
“We need to support the contribution of African scientists and healthcare professionals. We need to act with urgency.”
CONCVACT plans to capture more than ten late-stage vaccine trials at the earliest, via collaborations with global vaccine developers, sponsors, and African businesses that enable clinical studies.
The African group also hopes to secure the safety and efficacy data of promising vaccine candidates for the African population in order to validate their launch after approval.
2021 Budget: FG projects spending plan of N11.86 trillion and deficit of N5.16 trillion
This tops 2020 budgeted expenditure of N10.8 trillion.
The Federal Government is projecting to spend N11.86 trillion for 2021. This was disclosed by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed at a virtual presentation of the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) held on Friday.
According to the finance minister, the government is planning to spend N11.86 trillion against revenue of N6.98 trillion meaning the government will have to grapple with a fiscal deficit of N5.16 trillion.
“The 2021-2023 MTEF&FSP is the pre-budget statement that provides the framework for the development of the 2021 budget. It is being framed against the backdrop of challenging global macroeconomic environment as well as domestic factors.
“We aim to keep the deficit within the three percent ceiling over the medium term and are therefore working on identifying new revenue sources and or cost of reduction.”
The minister noted that the 2021-2023 draft had been prepared against the backdrop of heightened global economic uncertainty.
Earlier today President Buhari signed the revised 2020 national budget of N10.8 trillion, which was passed by the National Assembly in June. The National Assembly passed a revised budget of N10.8 trillion on the 11th of June after the Federal Executive Council (FEC) approved a revised budget of N10.523trillion in May. 2020 Budget is based on a revised oil benchmark of $25 per barrel as against $57 while crude production was reduced from 2.18 million to 1.94 million barrels per day Budget deficit for 2020 is estimated at N5.365 trillion.
As of March 2020, the FG was running a 52% shortfall in the first quarter of the year with actual revenue collected of N950 trillion compared to budgeted revenue N1.96 trillion.
What this means: Nigeria is facing an unprecedented revenue crisis exacerbated by the Covid-19 pandemic and the crash in oil prices. At N5.16 trillion, Nigeria’s projected budget deficit will be 43% of spending and about 3.6% of GDP if the budget is passed. A budget deficit means the government will have to borrow heavily next year to fund its expenditure programs.
The government received a $3.4 billion funding from the IMF in April and expects another $3.5 billion from the World Bank in August 2020. The government also revealed it has no plans to access the commercial market for foreign debts as it takes advantage of lower interest rates in the domestic market.