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Financial Services

Insurance companies plead for extension of December 31, 2020 recapitalization deadline

Insurance companies have appealed to NAICOM to extend the deadline for recapitalization as directed by the regulator.

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NAICOM

Insurance operators are clamouring for the extension of the recapitalization deadline to September 30, 2021 from December 31, 2020

They also want waived, the first phase of its segmented recapitalization for the insurance and reinsurance companies scheduled to end December 31, 2020, as directed by the regulator, the National Insurance Commission (NAICOM).

The reasons given by the operators for the extension of the deadline are proximately related to the huge impacts of the COVID-19 pandemic and #EndSARS protests on their insurance businesses.

Thus, they require enough time to fully settle back to their businesses to be able to pursue more aggressive recapitalization agenda to meet the commission’s set objectives by 31 December, 2020.

The insurance companies are as well pleading with NAICOM to jettison the phase by phase segmentation of the exercise – with the first phase billed to elapse on December 31, 2020.

This plea was made during a meeting of the Chief Executives of all the insurance companies with the Commissioner for insurance at the industry’s professional forum in Abeokuta, Ogun State recently.

The operators are more concerned and agitated, as it relates to meeting certain thresholds by 31 December 2020, and failing to meet them would make the commission restrict the scope of business insurance and reinsurance companies they can transact.

In consideration of the economic realities, a number of the operators are even appealing to the commission to waive/step down the December 2020 deadline, to have ample time to rejig and revamp their businesses.

What you should know

  • Life and general insurance companies were asked to shore up their existing minimum paid-up capital from N2bn and N3bn to N4bn and N5bn respectively by the end of December 2020, and meet the final minimum paid-up capital requirements of N8bn and N10bn respectively by the end of September 2021.
  • Composite companies and reinsurance firms were asked to shore up from existing minimum paid-up capital of N5bn and N10bn to N9bn and N12bn by end of December 2020 and to N18bn and N20bn respectively by the end of September 2021.
  • NAICOM extended the deadline for insurance and reinsurance companies to meet its new capital requirements to September 30, 2021 from December 31, 2020.
  • NAICOM also mandated that 50 per cent of the minimum paid-up capital for insurance and 60 per cent for reinsurance must be met by 31 December 2020.
  • NAICOM stated that insurance companies that failed to satisfy the required minimum paid-up capital by December 31, 2020 may be restricted on the scope of business they would transact.
  • Nairametrics had reported that some insurance companies have been struggling to meet these requirements. There were also wide-spread speculations over possible mergers/acquisitions in the insurance sector.

Johnson is a risk management professional and banker with unbridled passion for research and writing. He graduated top of the class with B.sc Statistics from the University of Nigeria and an MBA degree with specialization in Finance from Ambrose Alli University Ekpoma, with fellowships from the Association of Enterprise Risk management Professionals(FERP) and Institute of Credit and Collections management of Nigeria (FICCM). He is currently pursuing his PhD in Risk management in one of the top-rated universities in the UK.

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Business

Insurance companies paid N4 billion in claims after EndSARS protests – NIA

The NIA chief assured that some insurance operators were still working to settle genuine claims as most claims from insured businesses had been paid.

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The Nigerian Insurers Association (NIA) says Insurance companies paid N4 billion in claims to over 2000 businesses affected by the aftermath of the EndSARS protest after hoodlums took to the streets.

This was disclosed by Mr Ganiyu Musa, Chairman, NIA, on Thursday in Lagos.

The NIA chief assured that some Insurances operators were still working to settle genuine claims as most claims from insured businesses had been paid.

“The number of insured businesses that were affected at the last count was about 2,000 insured loss and the industry has settled N4 billion claims out of N4.5 billion in respect of the #EndSARS protests.

Once they are documented and completed, we have the commitment of our members that the claims will be paid timely,” he said.

He added that the association would continue ensuring members pay genuine claims to clients.

What you should know

Recall Speaker of the House of Representatives, Femi Gbajabiamila disclosed that Lagos State will need about N1 trillion for the reconstruction and repair of the properties and infrastructure that was vandalized and destroyed by hoodlums.

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Business News

Nigerian payments company, Paystack expands to South Africa

Paystack’s south African expansion began with a six-month pilot phase that started after Stripe’s acquisition.

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Paystack acquired by Stripe for a reported $200 million in the biggest fintech acquisition in Nigeria's history

Paystack, the Nigerian payments company which powers businesses with its payment API has announced that it has expanded its operations to South Africa.

Founded in 2015 by Shola Akinlade and Ezra Olubi, Paystack helps businesses in Africa get paid by anyone, anywhere in the world. The company was actively present in Nigeria and Ghana before expanding to South Africa.

In 2018, Paystack raised an $8 million series A round led by Stripe. The funding was used for its Ghana expansion. Since expanding to Ghana, Paystack has grown and claims to power 50% of all online payments in Nigeria with around 60,000 customers, including small businesses, larger corporates, fintech, educational institutions, and online betting companies.

The company was later acquired by Stripe for $200M in 2020 for its African expansion. According to Tech Crunch, Paystack south African expansion began with a six-month pilot phase that likely started a month after Stripe’s acquisition. During this phase, the company has worked with different businesses and has grown a local team to handle on-the-ground operations.

What they are saying

Shola Akinlade, Paystack CEO said, “South Africa is one of the continent’s most important markets, and our launch here is a significant milestone in our mission to accelerate commerce across Africa. We’re excited to continue building the financial infrastructure that empowers ambitious businesses in Africa, helps them scale and connects them to global markets.”

Khadijah Abu, head of product expansion, added that “for many businesses in South Africa, we know that accepting payments online can be cumbersome. Our pilot in South Africa was hyper-focused on removing barriers to entry, eliminating tedious paperwork, providing world-class API documentation to developers, and making it a lot simpler for businesses to accept payments online.”

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