Friday, June 12, 2020 / 08:29 PM /By
Ekerete Ola Gam-Ikon / Header Image Credit: dollarsandsense.sg
Interesting times are here again as we manage, and subsequently consign, COVID-19 to the position we had put such several threats after overcoming them. It is a season when an avalanche of information continues to pour into our space and we are having to decide what to take and what to forsake. At least, this aspect of our normal life will remain even as we adopt different approaches to use the available information in our best interest.
I have been participating in quite a number of webinars, especially on insurance, during this season and seeking for fresh usable information that I would share with others in view of my vision to expand the Nigerian economy through insurance.
So often, the issues, problems and challenges we discussed before COVID-19 are repeated, and rather than proffering clear solutions and directions, we conclude with phrases like "We cannot do the same thing after COVID-19 and expect a different result"; "COVID-19 has taught us hard lessons!" and "Who will be on the team to implement these recommendations?"
For the Insurance Industry, I will like to suggest what respective stakeholders should be doing differently now and into the future:
1. Federal Government of Nigeria (Presidency, Federal Ministry of Finance, Budget and National Planning, National Insurance Commission) - Undoubtedly, you are the creator and driver of insurance in Nigeria, and with concise reports and information about the market in your custody, you should seek to assist, relieve and empower Nigerians much more with information about the existence and value of insurance. In your position as the Federal Government, you have continued to hear and discuss low insurance awareness and poor customer education as part of the issues hindering the acceptance of insurance by Nigerians, yet you embark on empowerment (intervention and relief) programmes that are launched and commissioned without any mention of insurance. Given the role of insurance as stabilizer of the economy during and after any crisis, you will do better by constantly informing Nigerians about the need to take insurance for themselves and their businesses. If we do more insurance, as the Federal Government, you will not have to be providing reliefs as the insurance industry would have fully taken over that role while the revenue accruable from insurance companies will increase astronomically. At 0.3 percent contribution to our Gross Domestic Product (GDP), the insurance industry paid over 330 Billion Naira as claims (2019) to policyholders and over 300 Billion Naira as tax (2018) to the Federal Government, indicating that with greater insurance penetration (currently less than 2 percent), more value could be derived from the insurance industry.
My suggestion to you, therefore, is to take full responsibility for addressing the twin problem of low awareness and poor education of Nigerians about insurance; and this can be done by simply INFORMING Nigerians about insurance. Let the President, Finance Minister and Commissioner for Insurance go with a simple message "Insurance is good for you, get one today, claims assured!"
Some will argue that as Public Office Holders, you cannot be promoting insurance for the benefit of private businesses and it does not happen in other climes, then my response would be that "our problems are different from those in other climes and require a different approach!" Also, governments stand to benefit from it, so why not? In this time, when we are seeking to creatively address our revenue challenge, no style or approach should be considered unsuitable as far as it is legal. Besides, insurance is a social responsibility.
2. Licensed Operators (Insurance Companies, Insurance Brokers, Loss Adjusters and Agents) - Like every other profit-oriented venture, you need more customers but the agelong problem of the insurance industry that you must address is delay in settlement of claims and payment of discharged claims. As operators, you have all shared from the marginal increases in Gross Written Premium (GWP) every year in the last decades but you are also interested in the significant results that can come with more customers. Some analysts have opined that the current state of the insurance industry in Nigeria cannot handle more businesses except the processes are improved to deliver better services especially in terms of claims settlement. My position is that only more demand will force suppliers to invest in systems and measures that will seek to deliver beyond customers' expectations.
Therefore, I suggest, and indeed advise, that you invest a lot more in your communication, back-end infrastructure and knowledge systems. This is because more businesses are going to be coming from individuals and micro and small businesses, which will report claims (genuine and fake) more than the corporates you are more familiar with. This preparation is very necessary to ensure that when citizens respond to the information by the Federal Government and her Officers to buy insurance, you do not drop the ball. Communicate the features and benefits of your products and, more importantly, how policyholders can readily have their claims processed with the ease you announce the buying procedure.
Importantly, I suggest that each of you should focus on your selected area and do a great job of it. Over the years, professionals in insurance have been easily distracted by the efforts put into being an insurer and acting like a broker or loss adjuster to a policyholder, or being a broker and acting like an insurer to the policyholder; a completely weary process. Technology cannot even enable such a process except where it has been compromised.
Lastly, conduct thorough scrutiny of the engagement process for existing and potential policyholders and remove unnecessary bottlenecks that seem to protect you and frustrate them. Just simplify it!
3. Shareholders - You are the ones who provide the funds needed to meet minimum capital requirement to obtain/retain the operating licences and the working capitals to operate the businesses. If you are like most investors in the insurance industry, also involved in leading the day to day management of your companies, you are likely to exercise care in deploying capital into market research and development. However, it is a season of attempting new ways to reach higher levels of achievement, so you will need to reconsider your risk appetites.
My suggestions to you, as shareholders, are firstly to get respected persons as independent non-executive directors into your board to stretch you beyond fear to dwell on emergent opportunities; then secondly, insist on your company setting aside some percentage of the profit to address key societal challenges preferably youth engagement. Lastly, challenge yourselves to become stronger communities of shareholders in insurance from all the companies to not only protect your interests but promote the adoption of insurance by the public.
4. Policyholders and Yet-to-be Policyholders - My favourite group from where I believe the positive changes we desire for the insurance industry in Nigeria will come from; you have the biggest role to play in a rather simple way: Just ask the WHY questions!
This will be my suggestion to you. Ask questions, not only about prices and timing of delivery of policy documents but also about what they will tell you when any claim is reported. If you do this very well, you can possibly get what looks like a Claims Guarantee at the point of endorsing the policy.
Meanwhile, if you have not been signing your insurance contract documents, that may have been the reason you were not reading them and the failures in settlement of your claims by insurance companies could also be attributed to this. Ask questions!
Be assured, there are some insurance companies that are committed to giving you new and defining end-to-end insurance experiences, do not just buy insurance because you need to help a relative or friend sell and meet his/her sales targets, search for and compare rates and conditions based on your specific needs.
5. Students and Young Insurance Employees - You are the real changemakers of the insurance industry in Nigeria! I know, as some of you have told me in our sessions, that what you hear/read about the insurance industry in Nigeria scares and discourages you but, as you know, what does not ruffle your feathers would not be worth your time and talent.
I suggest you read more, listen more and research more about what you read and hear, then connect with innovative professionals globally, thanks to technology, to mentor you and prepare you for the "war"; you are going to be fighting the battle for economic space wherever you decide to pitch your tent. Be challenged, be informed!
The need to democratize insurance is the responsibility of all Nigerians and others resident in Nigeria as we will all live a better life in a more insured environment. Fear is consumed by boldly taking opportunities, and the insurance industry in Nigeria offers massive opportunities if we get committed to bringing millions of Nigerians into the insurance ecosystem.
Reflect on the suggestions that affect you as you enjoy a more informed Democracy Day!
About The Author
Ekerete Olawoye Gam-Ikon, MNIM, CPP, is a management consultant with a specialization in Strategy and Insurance. He is available through e-mail firstname.lastname@example.org
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