NIGERIAN REINSURER EXPECTS ONLY HALF PREMIUM REVENUE TO BE PAID

Nigerian reinsurer Continental Re has said that it expects half of its listed premium revenue for 2012 to go unpaid. Reinsurers in parts of Africa have long had a problem with insurers paying up unless the insurers have a claim on the reinsurers. In Nigeria the problem appears to be increasing. Provisions for premium debt were 35% in 2010, but 45% in 2012. Rating agency AM Best affirmed Continental Re's rating at B+ (good), but warned that “the rising trend in outstanding debtors is a negative rating factor given the problems with premium collection in Africa". Insurers too have been complaining that government agencies are reluctant to pay premiums unless they have a claim.