We want to use this medium to allay the fears of any of our shareholders, creditors, and other stakeholders resulting from the unfounded allegation contained in the said publications
LAGOS, Nigeria, December 19, 2018 The attention of the ETI Group has been drawn to recent publications in some online media alleging overstatement of ETI’s balance sheet and income statements emanating from incorrect exchange rates in translating the financial statements of our affiliate entities, especially Nigeria.
We want to use this medium to allay the fears of any of our shareholders, creditors, and other stakeholders resulting from the unfounded allegation contained in the said publications.
Ecobank complies with IAS 21 requirements
The deterioration of the Naira in 2016 led to the creation of different windows for various segments of the economy leading to foreign currencies being traded in these markets/windows at different rates and thus leading to a multiple exchange rate system in Nigeria.
The existence of multiple FX markets with different exchange rates as well as the accessibility to such markets necessitates the review of the appropriate exchange rates that entities should use in accounting for and reporting its foreign currency transactions as well as foreign investments into Nigeria under International Financial Reporting Standards (IFRSs). IAS 21 ‘The effects of changes in foreign exchange rates’, requires that a foreign currency transaction should be recorded at initial recognition in the functional currency using the spot exchange rate at the date of transaction (IAS 21, paragraph 21). IAS 21 paragraph 8 defines the spot exchange rate as the exchange rate for immediate delivery. Where a country has multiple exchange rates, an official quoted rate should be used as the spot rate.
Nigeria currently has multiple exchange rates and judgment is required to determine which exchange rate qualifies as a spot rate that can be used for translation under IAS 21. In determining whether a rate is a spot rate, an entity is required to consider whether the currency is available at an official quoted rate and whether the quoted rate is available for immediate delivery. The CBN official rate, Nigeria Inter-bank Foreign Exchange Fixing (NIFEX) rates and the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rates are all quoted and can be used to convert or translate foreign currency transactions. Thus, the CBN official, NIFEX or NAFEX rates all technically comply with the requirements of IAS 21.
As a policy within Ecobank Group, we use the official rate in the respective jurisdictions in which we operate to translate the results and balances of our affiliates into the Group’s reporting currency, the US Dollar. As a result, and in exercising the judgment allowed for within IAS 21, the Group currently uses the CBN official rate which is one of the 3 quoted rates and the official exchange rate according to the CBN. The use of this rate complies with IAS 21 and has been publicly disclosed to the market in all our press releases along with the impact of using the other available rates. This is done so that users of our financial statements can easily quantify and adjust for the use of the other exchange rates if necessary. Most of our peers in Nigeria used the CBN rate in 2017, before switching to NIFEX towards the end of the year. In 2018, they have gradually settled at a blend of both NIFEX and NAFEX.
The use of the CBN rate is in accordance with the group’s policy which is to apply the official rates. This policy and its application are compliant with IFRS and specifically IAS 21. To enable comparison and to ensure that the user of the group’s financial statements is not prejudiced in any way, we have adequately disclosed in our various press releases and investor presentations the fact that we have used the CBN official rate in addition to disclosing the expected impact on our results of using alternative available rates.
At its November board meeting, the Board of ETI approved the adoption of the NAFEX rate as the rate to be used for the translation of our operations in Nigeria. The change has been necessitated and approved in response to developments in the industry especially with the ETI’s peers moving away from the use of the CBN official rate.
Ecobank complies with IFRS 9 requirements
Ecobank Group adopted IFRS 9 as issued by the IASB in July 2014 with a date of transition of 1 January 2018, which resulted in changes in accounting policies and adjustments to the amounts previously recognised in the financial statements. Similarly to our peers in Nigeria, as well as other African and global banks, and, as permitted by the transitional provisions of IFRS 9, the Group has elected not to restate comparative figures. Adjustments to the carrying amounts of financial assets and liabilities at the date of transition were recognised in the opening retained earnings and other reserves of the current period. Overall, the adoption of the standard resulted in the group recording higher impairment allowance than that recognised under IAS 39. This had a negative impact on the group equity by $299m.
The main drivers for the significant increase in IFRS 9 impairment figures when compared to IAS 39 impairment figures are:
• Replacement of the emergency period under IAS 39 with 12 months ECL on all exposures under IFRS 9.
• IFRS 9 introduces the stage 2 bucket where higher impairment (Lifetime losses) is recognised for facilities with significant increase in credit risk. Under IAS 39, same assets were classified as performing with minimal impairment recognised.
• Off balance sheet exposure & undrawn balances: Under IAS 39, impairment was not required to be recognised on these items, however, IFRS 9 requires that impairment provision on these items is calculated.
• Other financial instruments: Historically very little or no impairment has been held on non-customer loans/ instruments such as placements with other banks, government treasury bills and bonds, corporate bonds, items in the course of clearing and other debtors. These are now clearly within the scope of IFRS 9 and impairment has been computed on these.
IFRS 9 2014 does not require restatement of comparative period financial statements except in limited circumstances related to hedge accounting (not applicable to Ecobank Group) or when an entity chooses to restate (the Group has not, nor have most of its peers). The standard requires that where comparative periods are not restated, the difference between the previous carrying amounts and the new carrying amounts be recorded in opening retained earnings or other components of equity, as appropriate. This is the approach that has been followed by the Group and as a result the transition impact of $299m has been recognised in equity.
In conclusion, we can confirm to all stakeholders that there were no misstatements in our financial statements as alleged in our financial statement for the year ended 31 December 2017 nor in our three quarterly reports released during the 2018 year. We also note that this unfounded allegation was made by a former employee of the Group who is currently in court claiming payment of 13 years’ salary for an alleged unlawful termination of his employment contract. (APO)
Curacel unveils Grow, enabling any technology company to seamlessly offer insurance
Curacel team (Image: Supplied)
Curacel, the leading African insurance infrastructure startup, has launched Curacel Grow. An embedded insurance product that empowers technology companies to seamlessly offer insurance as part of their existing products and services. The startup is also part of the Winter 2022 cohort of Silicon Valley’s prestigious Y Combinator accelerator, joining the growing list of successful African startups that have participated in and benefitted from the program.
Curacel is launching Grow to support more effective distribution of insurance to millions of Africans through partners like Barter by Flutterwave, Float, Payhippo and other leading technology companies. The startup will also enable seamless embedding of insurance in customer user journeys. With Curacel Grow, airlines will be able to offer travel insurance to their customers through simple APIs. Automotive dealers will also be able to seamlessly sell insurance to customers as a value-added service. Curacel has built its market leading infrastructure that powers claims and fraud protection for forward thinking insurers like AXA Mansard and Old Mutual. And this expansive network of underwriters enables the distribution of insurance at scale.
Insurance penetration in Africa currently stands at less than 3 percent, with most policies sold offline and manually via brokers and agents. This cumbersome process makes insurance products expensive and out of reach for many price-sensitive Africans. As a result, market penetration of insurance products in Africa is half of the global average and premiums per capita are 11 times lower than the global average. The insurance industry in Africa also represents less than one percent of insured catastrophe losses worldwide. Although it’s home to almost 17 percent of the global population. This suggests that there is significant scope for growth.
With Grow, insurers can accelerate the distribution of their products by taking advantage of Curacel’s technology to easily embed insurance within other digital experiences in a more accessible way. Technology companies can also increase their recurring revenue by offering the protection their consumers need without the hassle of finding integration and negotiating terms with insurers and brokers. The solution is designed to integrate seamlessly with any technology platform and Curacel’s AI-powered infrastructure means claims can be submitted and processed in real time.
Commenting on the new product, Henry Mascot, CEO and co-founder of Curacel, said, “risk protection is a major consideration for Africa’s growing middle class. As it becomes easier to access credit and other financial services to enable new experiences. We want to make it easier to protect these experiences and enjoy them with full confidence. The success of various technology companies over the years has opened the door to many previously underserved people. And we want to take advantage of this to accelerate the penetration of much needed insurance products across the continent.”
Curacel has a presence in 8 countries across Africa, enabling insurers to connect with digital distribution channels and administer their claims cost-effectively.
Microinsurance is driving greater financial inclusion, says aYo Ghana CEO
There has been a ‘material increase’ in awareness of financial service products like microinsurance during 2021, with growing numbers of Ghanaian consumers purchasing cover to protect themselves and their families in the event of hospitalisation or loss of life.
Francis Gota, the CEO of microinsurer aYo Intermediaries Ghana Limited, says the company has seen a strong increase in its customer base since the start of the pandemic, with more than 6 million customers on its books at the beginning of November. It expects to add another 1.8 million customers in 2022. The company offers Hospitalisation and Life Insurance Cover through its two insurance products, ‘Send with Care’ and ‘Recharge with Care’.
In 2020, the company paid claims of about GH¢2.4 million to more than 8,000 customers.
“Microinsurance is dispelling the myth that insurance is just for the wealthy, educated, and formal-sector employees. Today, every Ghanaian consumer can purchase insurance on the go, using their mobile phones. Phone penetration and technological advancements are making it much easier to reach clients and provide better, more cost-effective service,” said Mr Gota.
Microinsurance is seen as a powerful enabler of financial inclusion in African markets, providing a much-needed social safety net that helps vulnerable people and particularly people with low incomes to stay afloat when the unexpected happens.
“Covid has made many people aware that tomorrow is not promised. As a result, many consumers have a better appreciation for insurance now, and this given us an opportunity to help protect more people than ever before, by providing cover against unexpected life events,” said Mr Gota.
Over 6 million subscribers are currently using aYo’s Recharge with Care product, which offers life and hospital insurance cover every time customers recharge their MTN airtime. Customers can get up to GH¢120 for each night they are admitted to hospital, and up to GH¢6,000 life cover for themselves and one family member who is registered on the policy.
How to sign up
For Recharge with Care, subscribers sign up via app.ayo4u.com or by dialling *296#, selecting option 1 and following the prompts. They can sign up for MyLife, MyHospital, or both. A maximum premium of GH¢6.00 provides cover that is valid for 30 days. Subscribers use the same process for filing claims (*296#, option 1, option 7, and follow the prompts.) Valid claims are paid directly to the claimant’s mobile money wallet.
MTN MoMo subscribers can send MoMo through aYo Send with Care by dialling *170#, select option 1 (transfer money) and then option 3 (Send with Care) on the mobile money menu. This will give them up to GH¢30,000.00 hospital and life insurance cover for themselves, and up to GH¢3,000.00 life cover for their family members (the receivers of the MoMo).
aYo partners with MTN to launch insurance for all Ivorians
Panel Guests: From the left: Laurent Koffi Senior Manager Segments Mobile Financial Service of MTN Cote d’lvoire; Jean-Charles N’Gotta CEO of aYo Cote d’lvoire; Marius Botha Group CEO of aYo Holdings; Philippe Attobra CEO of Sanlam Assurance Vie (Image: Karli Stock)
aYo Holdings, African microinsurance fintech together with telecommunications giant MTN and Sanlam Life has launched two innovative insurance products in Côte d’Ivoire that will contribute towards MTN subscribers enjoying peace of mind.
CEO of aYo Intermediaries Cote d’Ivoire Limited, Jean-Charles N’Gotta, said: “It is estimated that less than 2% of the Ivorian population currently has insurance. This is because most people think insurance is only for white collar workers with high incomes. We want to show that with aYo services, people with all levels of income can get peace of mind at an affordable cost to help take care of their financial health even after hospital bills due to an accident or illness, or their funeral expenses if the unforeseen happens and they pass away.”
Two basic products will be available at launch once consumers sign up to aYo:
aYo Recharge+ rewards MTN MoMo (Mobile Money) users by offering free accidental hospitalisation cover and life cover each time customers purchase airtime via MoMo. Customers can also take advantage of the AutoBoost, paid-for, functionality to get even more cover with every MTN airtime recharge.
With the free component of aYo Recharge+, each time a customer uses their MoMo wallet to recharge airtime, they get 8 times that amount as accident cover and 12 times that amount as life cover. When they take advantage of AutoBoost to buy additional cover (from 25 CFA to 300 CFA), this amount is multiplied by 200 for additional accident hospitalisation cover and by 300 for additional life cover.
aYo Kash+ offers cover for illness and accidental hospitalisations as well as life cover each time a consumer sends money, pays utility bills or school fees via MTN MoMo. Each time a customer makes a person-to-person money transfer or pays a bill using MTN MoMo, they get illness cover equal to the amount they spend in that transaction, accident and life covers for three times the amount transacted by paying a 5% premium. When they pay school fees using MTN MoMo, they get life cover for twice the amount transacted by paying a 2% premium.
Getting cover and claiming is as easy as using the aYo progressive web app from your mobile phone by visiting www.ayo.co.ci. Signing up, interacting, and claiming all happens without the need for any physical paperwork. When claiming, the required documents can be attached and sent via WhatsApp too.
aYo launched in January 2017 in Uganda and has reached more than 14 million customers across Uganda, Ghana and Zambia. The company has paid in excess of over $1 million in claims.
“Insurance, and the peace of mind it provides, has become more important than ever in today’s fast-paced world, where risks are a part of our daily lives. You never know when you will have to pay to get back on your feet after an accident or an illness. Often, the cost is so large that it goes beyond your immediate financial capacity, and that is where aYo and our innovative products will be most helpful,” said Jean-Charles N’Gotta.