Insurance Industry: Voting for the Best Commissioner for Insurance?

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Wednesday, April 03, 2013 4:18 PM / Ekerete Ola Gam-Ikon




As part of efforts to recalibrate the discussions around the state and development within the insurance industry and the perception created of a mediocre regulatory institution.


Now, here is my thinking. The previous Commissioners, Bailey and Chukwulozie did not complete their tenures, and much as I wish Daniel's own will be different, it is most unlikely to be.


He has had the greatest opportunity to leave a legacy not through his agenda but the environmental changes that he ought to take advantage of, yet he has not managed them well. Actions that seem decisive have been largely predicated on the impending actions of other regulatory bodies and in other cases, like the enforcement of premium payment by insurance buyers, the timing has misrepresented insurance as insensitive gate keepers and exposed operators to unanticipated financial risks. 


My greater concern now bothers on who will be the next Commissioner for Insurance? Should the industry engage the option of the route taken by SEC and AMCON? Here is the case for consideration by all insurance industry watchers.


The Case

It all started with a discourse amongst industry practitioners on the "State of the Insurance Industry" as most players do, given the state of the insurance market.


When the conversation got round to the subject of leadership within the insurance industry, one experienced professional, Bunmi, pointedly asked "Who would you consider the Best Commissioner for Insurance we have ever had?A more senior hand appeared stunned and after some seconds reacted thus "There we go again. What's the relevance of that question? Who needs to know? And why are you asking anyway?"


"Sir" I retorted "The relevance is to ensure we get a proper record of what has been done, what needed to be done but was not and how to get them done either by the current or next Commissioner" And I continued "Sir, do not forget that our population is growing at a rate the industry is not developing thus leaving the contribution of insurance to the Country's GDP at the same ratio year in year out despite the work done.


Whereas Bunmi agreed I was making quite an intelligent contribution to the discourse, the senior hand reasoned "But rating the Commissioners would not likely bring out the issues that have affected the growth of the insurance industry in significant ways".


I then argued that as theoretical as it may sound, let me set the criteria thus:

1.    Taking the gospel of insurance to Nigerians

2.    Instilling discipline in the operators

3.    Creating and maintaining an environment that attracts other economic stakeholders

4.    Promoting the image of insurance professionals among other financial services professionals

5.    Encouraging investors in insurance to extract value from their investments

6.    Recognition by their employer, Federal Government of Nigeria


They listened as I started matching the current and past Commissioners with the criteria I set. Those under my assessment included:

1.    Mr. Fola Daniel, Current Commissioner for Insurance since 2007

2.    Chief Emmanuel Chukwulozie (2004 - 2007)

3.    Dr. Oladipo Bailey (1997 - 2004)


Many may view the inclusion of Chukwulozie as inappropriate because he was booted out by President Olusegun Obasanjo before he could go half his tenure of 4 years. However, I thought an appraisal on the basis of the above set criteria will reveal whether or not he gave us something to reflect upon.


On the first point, Taking the gospel of insurance to Nigerians, which simply means seeking to ascertain whether the Commissioner engages relevant stakeholders with a view to encouraging them to buy genuine insurance.


While all three have had circulars forwarded to Ministries, Departments and Agencies from the office of the Secretary to the Government of the Federation instructing them to insure all their assets, only Chukwulozie adopted an approach of visiting Ministers and Heads of Parastatals to discuss the essence of insurance as conveyed in the circular.


There seems not to be any proactive steps taken now and then to engage and enlighten Heads of MDAs. Is it a good time for a seminar for all Heads of Insurance and/or Officers in charge of insurance in the MDAs? Someone has got the idea. Right?


Bunmi attempts to 'enlighten' me on the complexities of interpreting such circulars and points me to the fact that insurance, as compulsory as we make it sound, lacks the enabling law that will make its enforcement, like tax, acceptable and respectful to the general public. I took his point but wondered how that could be achieved without a forum that would allow the officers ask questions and get valuable answers towards actions that would  be favourable to the insurance industry.


"Next criteria" Bunmi urges me.


"Hmm, this second one, Sir is the crux of the matter" I asserted that - Instilling discipline in the operators could determine who would be voted the best as it affects both the buyers and sellers of insurance products and services.


Here, whereas Oladipo Bailey passes as the most vocal and may have put fear in the operators considering that the effective law held in the Insurance Act at the time could only allow him bark and not bite, he did a great job at barking.


For Chukwulozie, let's say he was preparing his arsenal for attack when he amended the terms on which the recapitalization process will be executed and it was sufficient indication that he was on a mission that was not acceptable to the industry chieftains.


Today, with a stronger law, would we say Fola Daniel has done enough to discipline operators? May be the answer can be better appreciated in the response of operators to claims and the number of new policies incepted especially by individuals; and if the customers can say their experience has been great and unprecedented, then Fola Daniel takes it.


Bunmi snapped "But Ola you know the insuring public has not stopped complaining, so shall we say, they have all not done well for anyone to be scored high?" I nodded.


Now to the third factor - Creating and maintaining an environment that attracts other economic stakeholders, my senior friend did not think we should wait time appraising them as all of them expended a lot of energy to shield the insurance industry from others.


Irrespective of what the law stipulates, they each used regulations, as Fola Daniel continues to do, to ensure the insurance industry remains a domain of the insurance practitioners for the insurance practitioners and by them. Until today, interested investment bankers and executives practically struggle to convince insurance practitioners to take advantage of assigned funds for the future growth of the sub sector.


The Nigerian insurance industry is a mirage or a myth to other economic stakeholders depending on which side you are looking, never clear and never made clear.


And on to the next factor among my suggested criteria - Promoting the image of insurance professionals among other financial services professionals, Bunmi thinks it should not even be there as NAICOM has no business in this regard.


"Really, I thought so" I said "but when I see how other regulatory bodies are building platforms for the professionals in their industry to engage others, I wonder when it will happen that insurance professionals will speak at events like National Economic Summit Group and The Economist hold annually."


"When insurance professionals take the stage that is not necessarily set by NAICOM and CIIN, we can hope to have other professionals follow such speakers back to insurance. In this age of partnerships and co-operation focused on Africa and Nigeria, we cannot afford not to be in the conversations." I concluded.


Bunmi did not yet agree that it was a point for the Commissioners to work on and argued that it behoves on the CEOs and Business Leaders in the insurance industry to get themselves on such stage! It got me thinking but I insisted that with what CBN and SEC has been doing, there must be a key role for the Commissioners to play in this regard.


Encouraging investors in insurance to extract value from their investments as our next factor would surely be where Oladipo Bailey scored his mark above others with the International Directors Seminar introduced during his tenure. Most investors in insurance appreciated the initiative by their large turnout for the two or three times it was held.


Though Chukwulozie tried to sustain it, Fola Daniel allowed it to pass and has since not had any engagement with those who fund the continued existence of insurance companies except when there was the compulsion for Directors to attend the planned seminars on Corporate Governance.


Bunmi then recalled with reservations how a major shareholder in a leading insurance brand asserted that it was NAICOM's insensitivity to investors in insurance that made him to take an executive role in the company to ensure his vision was pursued and realized.


Indeed, I also reminded Bunmi that I had once organized a Breakfast Meeting for investors in insurance and can truly say they are in the cold because SEC that should appropriately address their case have at best focused on the operations of the business.


And now, on the last one - Recognition by their employer, Federal Government of Nigeria, meaning which of them has any National Honours, Bunmi and I know none of them yet! 


So who would work and not be recognized and rewarded for accepting such national call to duty. Here, Bunmi and I again agreed that it was high time the insurance industry gets a boost by the award of national honours to its current and past commissioners.


Who would you vote as the best Commissioner? Whether it matters or not, we need to talk about it as part of examining the growth impediments of the insurance industry.


What do you think?


Ekerete Gam-Ikon

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