Nigerian insurers are deploying US-based Lemonade playbook on sharing surpluses on money earmarked for claims. In other words, if claims have been processed from the funds earmarked for claims, the remaining is returned to policyholders or their selected charities.

Lemonade is a completely digitalized insurance company; it doesn’t have any physical agencies or written policies. Instead, customers buy their policies and submit their claims on the web or through the mobile app.

When users sign up for insurance and pay their premiums, Lemonade takes 25% as a flat fee out of these premiums in order to cover its operating expenses, while the remaining 75% is used to pay claims submitted by users. Just to give you a perspective, for-profit insurance companies charge 35% as premium fees.

At year-end, the balance of these premiums is donated to a charity of the user’s choice. This is what is called the “Giveback” concept.

That playbook of returning the surplus has been picked up by Nigeria’s Noor Takaful Insurance Limited: “The surplus distribution extended to policyholders in the insurance sector is a significant milestone that has contributed immensely to unlocking the value in ethical compliance both for individuals and corporate organisations in Nigeria. This was disclosed by the Chairman, Board of Directors, Noor Takaful Insurance Limited, Muhtar Bakare, in Lagos. According to him, for the third year in a row, his company has announced the distribution of surplus (cashback) payments worth over N36 million to policyholders, who did not make claims, in line with its commitment to promoting ethical insurance in Nigeria.”

This is amazing because what Noor Takaful is doing is to solve the common conflict of interests between insurance companies and insured people which come into play since any claim rejected becomes profit for insurance companies. By running this playbook, policyholders will not see rejection as a way to jack up profits. Possibly, this will improve the perception in the industry and boost overall insurance product penetration which remains at single digit in Nigeria.

Update: please read the comment below for a balanced perspective on this playbook.

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I was a student and had some free funds. I read about the promises of Transcorp Plc initial public offer (IPO), from the president of the nation, and the director general of the securities and exchange commission; I joined the IPO party . Because I felt that those  duo would never allow the company to crash, I went in and bought the shares of Transcorp. They had sold Transcorp as Nigeria’s equivalent of China’s state enterprises all combined in one.

That investment has underperformed across all domains. Honestly, I do not want to remember that mistake. 

Now, the news is that the Nigerian National Petroleum Corporation (NNPC) will sell shares to the public in 2024. That was according to the GMD of NNPC, Mele Kyari, in a conservation on Bloomberg: “The Nigerian National Petroleum Corporation (NNPC) will sell its shares for the first time to the public in three years, a path to raising the fund needed to sustain it as a going concern after managing to break a loss-making spell that has run it aground for roughly four decades and a half. Mele Kyari, the corporation’s head, told Bloomberg in a video chat on Tuesday the Initial Public Offering (IPO) will help Nigeria keep pace with the global energy transition in a bid to unlock its benefits.”

“IPO already means this company is going to be profitable,” Mr Kyari said.

“It has a long projectory, it has short term view of how things can be done better to align with best practices in the industry, trying to see how we can latch on the existing framework for energy transition that is ongoing all the world.”

Looking at what happened in Transcorp, will you buy NNPC shares? 

Meanwhile, this announcement validates my call in 2017 when I wrote thus: “NNPC Plc – Nigeria Should Take NNPC Public To Boost Transparency”. I listed some benefits for NNPC Plc.

NNPC Plc – Nigeria Should Take NNPC Public To Boost Transparency

Umu Abia, I accepted the invitation of our Governor, Dr Okezie Ikpeazu, to deliver the keynote of a special development programme which the state is organizing. I send a message to all Abians, that despite everything, we must continue to have tough love for God’s Own State. Aba has to rise. Umuahia has to evolve. Ohafia, Arochukwu, Bende, Isuikwuato, Ukwa, Ngwa, etc must rise. How do we do that? We need to join the action.

Umu Abia, udo diri unu. Obi dim mma ikele unu. Onye isi obodo ala ayi, Governor Okezie Ikpeazu, si mu bia kwuo okwo maka imepe ala Abia. Chineke gozie uno. Ka aku ruo ulo, ndi oma. Bia ka anyi mezie obodo Abia.

The Government has to do better, strategically, and we the people have to show up and do our part. The Aba free trade zone is a promise. But across all domains, Abia is missing a new dawn of entrepreneurial capitalism.

The businesses which Nnanna Kalu and co pioneered in Aba cannot take Abia to the next level. But how can Aba attract the new species of companies? How can Abia become indeed a God’s Own State of opportunities? It turns out when we engage!

What can you do for Abia state?

This is a very consequential outcome and if the Supreme Court aligns, Nigeria would be completely different in years: “The suit filed by the Federal Inland Revenue Service (FIRS) seeking to stop the Rivers State Government from commencing collection of Value Added Tax (VAT) has been dismissed Federal High Court sitting in Port Harcourt, Rivers State.”

Now if Lagos state follows along, the Nigerian design will begin to happen. I think fiscal federalism would be good for the competitiveness of Nigeria where comparative advantages begin to play. But it all depends on how the Supreme Court, after the Court, sees this big legal battle for the future of Nigeria.

FIRS should withdraw its appeal: it is time for Nigeria to have internal competition. By the time Abia state does not get money from Abuja, we will be forced to fix Aba.

The suit filed by the Federal Inland Revenue Service (FIRS) seeking to stop the Rivers State Government from commencing collection of Value Added Tax (VAT) has been dismissed Federal High Court sitting in Port Harcourt, Rivers State.

Last month, a Federal High Court had declared the collection of VAT by federal government in states, unconstitutional. The tax agency had approached the court praying a Stay of Execution on the judgment.

According to Vanguard, Justice Stephen Dalyop Pam, in his ruling, said granting the application would negate the principle of equity. He noted that in as much as the state government and the state legislature has enacted a law in respect of the VAT that courts were bound to obey laws.

He noted that the Rivers State Government and the State Assembly, have duly enacted Rivers State Value Added Tax No. 4, 2021, which makes it a legitimate right of the state to collect VAT.

Meanwhile, despite the inability of FIRS to get the prayer sought, it is not giving up, asking taxpayers to continue to pay VAT to it.

Despite the latest development in court, Johannes Wojuola, the special assistant to the chairman of the FIRS on Media and Communications, in a statement Monday urged taxpayers to “remain calm” and maintain the “status quo”.

“The FIRS having lodged, in the Court of Appeal, both an appeal against the decision of the Federal High Court sitting in Rivers State in Suit No. FHC/PH/CS/149/2020, Attorney General of Rivers State Vs Federal Inland Revenue Service, and an injunction pending appeal of the said judgement, assures taxpayers that there is no cause for alarm.

“The Federal High Court ruling should not breed any confusion as to the obligations of taxpayers. Taxpayers must continue to comply with the Value Added Tax Act pending the final determination of appeal,” the statement said.

He said taxpayers “must” continue to pay their tax to the FIRS to avoid paying penalties for failure to do so.

“For the avoidance of doubt, records of appeal have been transmitted to the appellate court. The Service is confident that, given the extant laws, the arguments and case put forward, it will earn a favoured judgment at the appellate court,” the statement concluded.