Global discourse on economic rebounds, especially during post-crisis periods like we have had with the COVID-19 pandemic, focus on the efforts of governments to ensure the environment is safe for citizens to return to work and business and vigorously manage her fiscal policies to minimize the effect of inflation and other economic factors on our lives. Quite often, the expectations remain exceedingly high and, sometimes, the governments are overwhelmed as we have seen in the recent past.
Therefore, economic analysts have opined that governments need to increasingly embrace the approach of collaborating and partnering with the private sector to rebuild and reopen the economy. However, there is the persistent challenge of priorities and expected outcomes.
What matters to the government should be what matters to the citizens if we must find the right path to economic recovery and renewed growth.
Clearly, working on sectoral basis to rebuild the economy would be one of the ways that governments including the Federal Government of Nigeria can set achievable milestones. Hence, the attention that the insurance industry in Nigeria has been getting from the President Muhammadu Buhari administration should not come as a surprise to anyone.
The insurance industry is the silent builder of any economy and keeping our economy resilient post COVID-19 remains its significant task.
If the Federal Government of Nigeria, over the years, have created the environment through enabling laws and actions to ensure the development of the insurance industry in Nigeria, how should they be involved in its transformation from "a caterpillar to a butterfly"?
Arguably, governments make laws to guide and regulate the behaviour of its citizens and residents but operationalizing the laws become what constitutes business. Reading about the calls by insurance business leaders for the support of government to develop the insurance sector in Nigeria, in my view, sounds like requesting government to set up and operate the business of insurance underwriting and customer engagement.
Developing anything is a process, indeed a journey, and in the case of the insurance sector in Nigeria, it has been at the stage considered ripe for transformation. The big question is WHO SHOULD DRIVE IT?
What does the Transformation Require?
Firstly, before the who, considering the WHAT is imperative. Transformation, typically, portends a complete change from what it was, and to what can be described as exciting for the users and producers, in this case, policyholders and insurers.
To be at such stage or path of transformation for the insurance sector, a critical success factor is the voice of the policyholder and what that voice is saying. A preliminary independent survey already indicates that less than an estimated one percent of the one percent of the Nigerian population that holds one form of insurance can express satisfaction about the current experience.
Examining the suitability of available products, the means by which people get them and the quality of services before and after sales would reveal the points that changes are required for there to be real transformation.
Recently, increasing number of people are seeking for risk solutions that are either not offered yet by insurers or uneasy to obtain except through special considerations.
Technology, a key element for transformation, though available, has been slow in adoption and high in discussions within the insurance industry in Nigeria.
Insurtech is gaining more attention however the operating environment seems reluctant in adopting it as the viable alternative tool for deepening insurance penetration on a national scale.
Though regulatory actions have been discussed as relevant for transformation of the type expected in the insurance sector, it does appear that bold and innovative steps on the part of operators are what would further push the National Insurance Commission (NAICOM) to expand the field.
For example, incoherent steps taken so far by operators with regards to microinsurance, where the regulator has expanded the field by allowing all insurance companies the opportunity to push the strategy after due clearance, and Takaful, simply shows that they are not quite ready for the anticipated transformation.
Interestingly, NAICOM has made positive efforts to promote and encourage microinsurance and Takaful through the enlightenment events in Kano, Abuja and Lagos, whilst the operators that actually need to attract customers seem to have been bitten by the same bugs that have held the entire insurance sector down for years.
The Responsibility for Real Transformation
The operators of insurance business and policyholders (existing and potential), in my view, need the transformation of the insurance industry in Nigeria far more than the regulator.
Businesses are established to have and increase customers, and the insurance operators are not exempted from such mission, as any transformation that brings more customers, more revenue and more brand value will deliver benefits, firstly, to the operators before NAICOM gets some percentage as annual levy.
The operators ought to be so active and visible with trying to convince more people to take up insurance, of course, using the old reliable method of sharing evidences of claims payments over certain number of years.
Deliberate actions that produce expected results are what claims payments represent and they should not be taken for granted or allowed to pass quietly. Planning to pay claims can only be seen as the strategic intent of few insurance companies that make reserves.
Insurance operators and policyholders know, or rather agree, that settlement of claims promptly, is the most potent tool for the transformation of the insurance industry in Nigeria.
President Buhari averred to this recently when he called on insurance companies to endeavour to "pay claims in good time", as he received the honour of Grand Patron of Insurance from the Chartered Insurance Institute of Nigeria (CIIN).
I can only opine that the emphasis on the prompt payment of claims by the President reflects the desire of the Federal Government of Nigeria to see real transformation of the insurance sector.
It will therefore be impressive, taking a cue from the President, to see the leadership of NAICOM follow through and not only address pending claims complaints but also periodically announce the cases treated and payments made to the public.
NAICOM is the only body that has the full details from insurance operators (brokers, insurers, loss adjusters) that would be needed to coordinate an effective communication plan on a consistent basis. Sharing such information and data may be her primary role towards the real transformation of the insurance sector.
When this happens, another big issue hedging transformation of the insurance sector, recapitalization, will more easily be addressed because investors often put their money in the direction they see people moving into, especially in a richly populated nation like Nigeria.
Taking responsibility is the first step to recording transformational change and, hopefully, insurance operators will no longer cringe when called out as the President did.