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!
Closing Thoughts
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 olagamola@gmail.com
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