Monday, July 15, 2019
/ 12:39PM / By Ekerete Gam Ikon /
Header Image Credit: Ngcareers
Arguably, the problems and challenges faced by countries are solved and better tackled by foreigners. The United States of America may have discovered this early and decided to legalise the entrance of foreigners using the Visa Lottery system, Academic Scholarship and other such means to attract the best brains into the US, making it the most sought after immigrants program until Canada adopted the approach. The Asian Tigers, China and India, on the other hand, adopted the reverse strategy by exporting their human resources to help fill the gaps in the developing countries and later established themselves as reliable partners for needed infrastructural development.
Either way, the problems and challenges of these developing countries, including Nigeria, increasingly serve as opportunities to foreigners, in my opinion.
The Rest of Us as Foreigners
The insurance industry in Nigeria may have considered a hybrid of both approaches of the Americans and Asians, as it seeks to implement a long awaited transformation plan when one considers the announcement of the new capital requirements by the National Insurance Commission (NAICOM).
For several years since the last recapitalization exercise of 2007, the insurance sub-sector, seemingly, struggled "on its own" to build an enviable reputation that would surpass its perceived competitor, the banking industry, but lagged behind due largely to the slow admittance or actions of foreigners. The only time most outsiders to the business of insurance (the rest of us) or foreigners understand that opportunities exist in the insurance sub-sector is during the season of recapitalization. However, there have always been opportunities but poorly presented and unstructured for the rest of us to understand. Besides the evident challenge of low capital, there are other challenges namely ineffective branding, poorly motivated workforce and slow adoption of solutions that could address the core problems of enforcement of compulsory insurances and connection with other economic drivers.
It is in these attributes that the assistance of foreigners become imperative as capital should not again be poorly utilised if the insurance industry must be transformed.
So this time, the leadership of the industry is closing ranks to deliberately request assistance from foreigners to resolve its age-long problems and challenges by seeking stronger voices to make the call. This is evident in the way President Muhammadu Buhari and other stakeholders have expeessed support and confidence in the current recapitalization process.
Yet, NAICOM must act, deliberately, in ways that are consistent with the calls by engaging private investors through the Nigerian Stock Exchange (NSE), Nigerian Investment Promotion Council (NIPC) and various chambers of commerce.
Unlocking the Opportunities
The rest of us (foreigners), it would seem, hold the key to unlocking the opportunities in the insurance industry in Nigeria and this is the time to seize those opportunities that exist in the non-core insurance areas.
Some analysts have asked: "Is the insurance industry in Nigeria truly seeking for these foreigners to come in and assist them work on their problems and challenges?" This is because a few such attempts in past years resulted in huge losses that stakeholders have not recovered from. My answer however is that for two reasons, the insurance industry in Nigeria desperately seeks and would gladly welcome foreigners that have real solutions to its problems and challenges.
Firstly, the industry has a higher population of tired workforce not supported by commensurate band of young professionals that can succeed them, and secondly, the innovation needed to revamp product offerings and launch new ones, is in the hands and hearts of individuals completely foreign to insurance.
It is worthy of note that after the last recapitalization exercise, some of the leading professional services providers identified real opportunities in the insurance sub-sector, and with little work done, readily identified the greatest problem of the insurance industry in Nigeria as its inability to attract and retain younger and capable professionals of insurance and non-insurance discpline. However, without the necessary guidance from the suspended Code of Good Governance, that problem could not be properly addressed and though fresh hands and hearts joined the industry, they were kept far from where changes of transformational type could occur. Yes, remuneration packages improved but those paid could hardly deliver commensurate value because like it is popularly expressed, you cannot give what you do not have.
Training, a vital element for retaining high quality and performing employees, suffered as did the insurance companies that faced the pains of economic recession. This is one non-core insurance area that holds opportunities which we hope foreigners will exploit as the era of new capital arrives.
Essentially, the insurance industry needs thinkers, young and old, then implementers, that will constantly navigate the risky waters of our national economy to remain above well known issues of attempted dismemberment of the insurance industry in Nigeria.
The contest for capital and by implication, economic space is real, therefore investors, executives, employees and even customers that will help the industry hold its space and add more, need to seize the opportunities as presented today or rather be engaged by the industry leadership.
Experts in lobbying and legislative processes are also urgently needed to undertake a fresh review of the insurance laws, their efficacies and impacts in line with future realities. If hand held devices are being readily launched to excitingly exceed users' expectations, product innovation and changes in service culture when it comes to insurance should be even quicker to deepen insurance penetration. Examples of these actions exist in other African countries.
As regulator, NAICOM in conjunction with the industry leadership need to initiate connecting hubs for ease of doing business with the rest of us. Now, there seems to be a connection with the professional services providers which only needs to be fully reactivated in the process of recapitalization but there is need to deliberately create a hub for foreigners who have ideas and concepts that can assist the growth and development of the insurance industry in Nigeria. For example, NAICOM could open and publicize the existence of a social media account that receives subject matter experts in diverse non-core insurance areas with those ideas that could assist the transformational process.
Time for Insurance Ambassadors?
In the face of the "Battle for Capital" given the recapitalization required of microfinance banks and new capital for mortgage guarantee companies as well as payment system banks, the insurance sub-sector needs more than persons that seek to exploit the opportunities presented above; it actually needs "Ambassadors"!
Persons, especially renowned entrepreneurs, who are passionate about insurance need to be engaged NOW. Insurance cannot remain relatively faceless and expect to attract and keep capital of $50m or more across different companies.
Who is inspiring the young digital natives amongst us? How are we expected to deal with common risks of harm (including death) resulting from attacks, kidnappings, failures and disruptions? Who is going to give answers to those policyholders whose claims have remained unsettled months after they had executed discharge vouchers with insurers that they never suspected had any issues? Or is the insurance industry afraid of engaging these foreigners for fear of the success that might come to the sub-sector?
Indeed, who will respond to these and many more questions to enable the insurance industry in Nigeria get on that path of transformational change?
Let the foreigners be engaged, or engage the industry, as the Americans and Asians have done successfully over the decades. We can start NOW!
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
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