Discussing insurance and its practice in Nigeria has become quite exciting for me, unlike most Nigerians, especially those across the leadership strata because I have found ways to cut through the self-inflicted myth around insurance. For example, quite too often, it is believed that we should let our actions speak for us, but when our actions are mostly negative, one cannot continue to ignore the chance of employing tools that will attempt to reverse the outcomes or override the expectations.
In Nigeria's insurance industry, so much is being done at different leadership strata to win the ears and eyes of customers, yet it does seem these actions are repeatedly missing the targets, quite loudly!
It might be futile to dwell on the leadership gaps or the issues that have created these gaps but to set the tone for easier understanding of the subject being discussed, mention is made of the usual misgivings that leave stakeholders dissatisfied with the insurance industry in Nigeria, namely: poor contribution to the GDP, poor access to information/data, slow adoption of mobile technology, weak governance and financial mismanagement, inadequate underwriting capacity, lack of innovative products and distribution channels, horrifying claims experiences and ill-timed regulatory actions.
Sometimes, I have been told "we are trying, remember where we were 10-15 years ago?" or "what do you expect when government is not enforcing the compulsory insurances to start with?" and my response has remained, "Let us ask the existing and potential customers how we are doing and let us proceed from there!" Of course, the next response would be "The customers don't understand" and anyone conversant with the narratives of insurance practitioners would agree that this is a standard closure to insurance discussions at very top levels.
While it may be in order to argue that some of the actions leaders ought to take are hindered by the aged insurance law, threatening global economic trends and unpredictable domestic policies, let us consider what leaders in respective domains within the insurance industry in Nigeria can do to welcome more customers in our peculiar state.
1. Determine the categories of customers, what should be the primary message and who should convey it.
In my view, existing and potential customers (policyholders) of insurance in Nigeria can be categorized into:
1) Those who do not know about insurance;
2) Those who know about insurance and have a negative impression;
3) Those who know about insurance and have positive impression; and
4) Those who are quite comfortable with insurance.
Again, I will not delve into detailed description of the customers in these categories but would like to draw attention to the facts that they have ALL been affected by the loud actions of the industry on claims settlement and about 90% of the population are in the first two categories!
Under the circumstances, rather than embark on a public blitz to invite more citizens to simply buy insurance from a market with an admixture of financially weak and strong companies, the message should be primarily tilted to providing the citizenry with information and data that will help them decide. They are worried about the ability and willingness of insurance companies to pay claims promptly, so why should the message not address their concerns? Where are the data on claims? If all they see are the billions of premiums insurance companies announce while the claims figures are bundled in 5-10 years records, do you blame them for being suspicious?
Moreover, if an insurer has 10 claimants to pay but decides to settle only two with large amounts leaving the "less privileged" to ponder and speculate, do you wonder why there is still so much noise about unsettled claims? The primary message must be about claims (outstanding, fully processed and paid) because those two categories of customers will rather discuss who settles claims than who has the financial muscle.
Regarding who should convey the message, the regulator, NAICOM is the undisputed organ. It is because NAICOM fails in this regard that the discerning customers/claimants sometimes accuse the regulator of protecting embattled insurers. A quarterly release of data on claims via social media will define the new level of leadership at the Commission. Or how else should we keep the Head of Corporate Affairs at NAICOM busy?
As the first point of contact, NAICOM should be in the forefront of promoting the insurance industry in Nigeria amongst stakeholders within and outside Nigeria. For example, if NAICOM genuinely sought to attract investors into Nigeria, when will we see its helmsman, Mohammed Kari discussing with top managers of the economy - Vice President, CBN Governor, Budget and National Planning Minister, Finance Minister who directly supervises NAICOM and others whose actions speak quite loudly. These are the efforts those categories of customers tend to believe; it conveys confidence. And who says the NAICOM Boss cannot speak to investors in the UK and other European countries where he goes for international conferences/meetings or indeed, Africa and Asia where many still desire Nigeria? Such actions cannot be done quietly. When will the insurance industry hold an Investors' Roadshow?
Then too, as the face and voice of government in insurance, we expect to see the NAICOM Helmsman in the entourage that visits scenes of collapsed buildings or any disaster areas to ensure his actions speak loudly to the victims and the general public. Insurance has more stake in such outings than some representations we see there.
2. Educating citizens about insurance must be researched towards the growth of the insurance industry
The only institute for certification of insurance professionals, Chartered Insurance Institute of Nigeria (CIIN) does a great job of its mandate, sustaining the integrity of the profession, however it requires a new type of leadership that will acknowledge the need for strong research and development platform where the works/projects of the students can provide answers to several age-long issues. Who says we cannot have breakthrough ideas from the young professionals certified by CIIN?
Insurers under the guidance of a renewed Nigerian Insurers Association (NIA) can make excellent use of the results of such researches and we can have a proactive insurance industry with more positive actions.
When NIA, as home of the primary drivers of revenue, has struggled to fully domesticate the principles and practices of insurance (foreign/elitist) in the face of concerted challenges from ESUSU (local insurance), an appropriate industry-wide research will be useful for the keen competitor to take the lead amongst others. While there exist huge opportunity for Credit Insurance, it is yet surprising that the insurance industry in Nigeria does not seem to have taken advantage of the headquartered presence of Africa Reinsurance Corporation in Lagos to brainstorm with them and come through with an appropriate product that addresses the malaise of credit default; this would have saved the industry from the affront of CBN to set up Mortgage Guarantee Companies after dealing agricultural insurance a blow with its creation of NIRSAL, thereby "killing" Nigerian Agricultural Insurance Corporation (NAIC)
Furthermore, such research from CIIN would have made a superior argument for the promotion of insurance as a social responsibility tool and issuance of insurance policy in local languages. The only reason insurance is not in the topical discussions around the Social Investment Programme of this administration is because the managers do not understand the sustainability value that insurance avails such programmes. If any of the beneficiaries of SIP dies or becomes permanently disabled, are we not likely to have more citizens below the poverty line?
3. Group actions have temporary effects that can be positive
If over 500 insurance brokers, 5,000 insurance agents and 50 loss adjusters and marine superintendents will call for positive actions by 58 insurers on claims settlement, for example, the impact will be phenomenal. Now, why will they not do that? Is it because they are conflicted over their interests or afraid that they would be backlash?
It is unimaginable that this group of professionals have heard the hues and cries of policyholders/claimants over the years and refused to open a full campaign against the horrible experiences meted out to those who pay premiums from which they earn their incomes.
As the strongest channel for distribution of insurance services until recently, insurance brokers are known to have challenged and won several battles against insurers but not that of claims settlement where only a few landmark cases stand out. Customers with smaller amounts of claims have been bruised and their character, at times, torn to tatters.
Surely, there is a lot these professionals can do as we look forward to a new type of leadership given the arrival of digital technology but their focus must be on the customers and not on themselves and their industry.
Talking about reengineering internal processes, NAICOM spent the last three and a half years trying to reorganize the insurance value chain especially the insurance companies and its loud actions provided hard lessons to all. Should it have spent those years propagating insurance, publicly, to the citizens through avenues we are constantly in touch with? What would it have caused the NAICOM Boss to maintain an active presence on Twitter, if not Facebook and Instagram? Or do we not think insurance needs such actions?
Too often, we have seen insurance industry leaders come together to announce joint action (not on claims) for members of the public to BUY INSURANCE and my question have simply been "Whom are they calling and who is checking the impact of this call?" Which of the categories mentioned earlier are they addressing?
In a service business like insurance, customers must be allowed/encouraged to seek out those who offer the best and long queues would be at their outlets and websites but that is not happening in Nigeria's insurance industry because you are not permitted to go against the guidelines of the group even if you can afford it!
The good news is that to survive, some insurers have the option of returning the operating licence they have in exchange for a microinsurance licence and NAICOM must encourage this, especially as it is set to welcome bigger players from 2019 irrespective of its botched attempt to tier-capitalize insurance companies.
4. As the battle for financial space intensifies, collaboration is key
If you will not let them into your industry, you have to go to them because the era of working alone has gone forever!
The insurance industry may have lost quite some of its space within the financial environment but can regain it and even win more if the leaders seek more opportunities for collaboration. Insurance cannot go to customers alone! The pace at which customers are going now, digital and otherwise, makes it extremely difficult for an insurance agent to have their eyes and/or ears and NAICOM is not helping matters with its slow action on the guidelines for aggregators. I was hoping NAICOM would have made big headlines by inviting interested aggregators to share their strategies thus hastening their release of the guidelines but clearly the CBN/NCC resolution that telcos offer mobile money will further minimize the space on which insurance is operating. Or what value proposition will the insurers then take to the telcos after mobile money is launched?
A new leader in the insurance industry in Nigeria that seeks collaboration must start with identifying professionals with diverse background with deep understanding of the sectors or organizations they desire to work with. Too often, discussions on probable collaboration between insurers and others (government, private organizations, NGOs) have been unsuccessful due to the lack of understanding by both parties, especially the insurance side. If your actions have been received negatively and you seek to leverage on another party that enjoys public acceptance, you must be ready to follow and see it as an opportunity to create value.
There is so much that the insurance industry in Nigeria can do with other sectors in Nigeria that drive large numbers but those that have the good name are seemingly too busy enjoying public sector largesse to consider them.
Imagine a scenario where, beyond expressing heartfelt condolences and gratitude for the sacrifices of our gallant officers and men to the Security Chiefs; we proceed to recommend measures and present initiatives that can be taken to assuage their families of the fallen or/and injured; and motivate others to realize that they are not alone at this time and at any other time? What a teachable moment that would be in gaining the much needed mind-share of the Nigerian public?
The categories of customers that have positive impression of the insurance industry and those that are comfortable with it would be reproduced a million times to face those in the first two categories, and the type of leadership required to engage them will have to do much more than just answering the questions I have posed here.
A few passionate persons will try but a complete restructuring of the insurance industry in Nigeria is now necessary for the new leadership to deliver what many readily say they see abroad: An environment where it is quite expensive, and not even worth the effort, to try to acquire any asset without insurance.
Indeed, a new type of leadership beckons for the insurance industry in Nigeria!
About The Author
Ekerete Olawoye Gam-Ikon, MNIM, CPP is a management consultant with specialization in Strategy and Insurance. He can be reached vide telephone on +234-806-648-1111 and +234-802-585-0344 or by e-mail vide firstname.lastname@example.org