Stakeholders Advocate for the Adoption Of Innovative Insurance Products In Nigeria

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Wednesday, September 30, 2020 / 6:05 PM / Bukola Akinyele for WebTV / Header Image Credit: WebTVNG

 

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Stakeholders have advocated for the adoption of innovative insurance products that can support sustainable development in Nigeria. This was part of the key discussions at the 2020 edition of the "Insurance September 2020" event which discussed the theme "Insurance and Sustainability".


The annual event which is a roundtable that brings together key stakeholders, policymakers, regulators, experts and analysts in the insurance industry in Nigeria, was an opportunity to explore how the country can attain the Sustainable Development Goals (SDGs) by 2030.


The Convener of the Insurance September Mr. Ekerete Ola Gam-Ikon in his welcome address at the event said the goal remained for all Nigerians to experience better insurance coverage.


According to Gam-Ikon, insurance sustainability was critical for the next generation of customers, and it was important to communicate with what they can understand.


Keynote speaker at the event and  MD/CEO of Crystal Trust Insurance Brokers Limited Nigeria, Mrs. Ekeome Ezeibe, said that the theme captured the mood for adopting insurance as a potential tool for driving sustainability in a Post-COVID-19 era.


She said the impact of COVID-19  on the global economy including the insurance industry is no longer news. She said it was a twin shock for Nigeria as a result of a health pandemic being worsened by falling international oil prices.


"It will affect some businesses that will help to sustain the economy,  even as we are still challenged with the absence of physical face-to-face interactions between client and stakeholders, cancellation of events, business interruptions, job losses, a decline in revenue for some businesses, increase in the prices of goods and services and closure/ restricted opening of schools," She said. 


She said, the insurance industry has started discussing innovation and is exploring ways to hasten the way the industry advertises its services leveraging digital platforms to achieve convenience and efficiency. 


Speaking on insurance as a tool for sustainability,  she said it was an important industry that was vital to global economic stability. She said the global economy has had less capacity to absorb shocks in 2020 than in 2007 and would require more risk protection for citizens.


She called for the issuance of new products while making a strong case for collaboration between insurance stakeholders and brokers to achieve sustainability for the economy.


 Some examples she gave include the following;

  • USA where there is a potential  strategic market for policyholders through the COVID 19 support scheme,
  • The decisions by some Nigerian insurance companies to refunded motor insurance payments to clients,  
  • In Singapore, some insurance companies reduced the money on motorcycles insurance premium registered for delivering businesses, insurance life and health was extended by  6months.

 

In her opinion, this principle represents the first-ever global sustainability framework tailored to insurance that keys into social capital and good governance.


She concluded that as a tool for sustainable development, insurance makes the world resilient and can help Nigeria farmers by protecting them from the effects of climate change and help stabilize their businesses.


The risk protection expert believed the amendment of the Insurance Act was key to making a stronger sector.


Ezeibe commended the Nigerian insurance regulator the National Insurance Commission (NAICOM) for awareness created for Insurance by adopting the market development regulation approach, especially during the pandemic.


The Founder/CEO, Consistent Energy Limited & President, Renewable Energy Association of Nigeria (REAN). Mr. Segun Adaju spoke on the impact of COVID-19 on energy consumption. 


He shared some statistics on Nigeria's energy situation room:

  • Nigeria population over  200m,
  • Energy access is 45%
  • Current electricity demand 40,000MW
  • Current grid supply 4,000MW averaged
  • Installed capacity 13,000MW
  • Transmission capacity 7,000MW amongst others


According to him, "The renewable energy we have in the country is enormous. Speaking on COVID19 response to solar energy, he said in the last month the energy consumption during the lockdown was much, helping online remote work cheaper to stay online and buy energy than trafficking to and from work, which has revolutionized the remote work experience and the energy will be needed more for health, residential, public facilities, worship centres. Etc. 


Concerning market developments, Segun Adaju said renewable energy especially off-grid solar has been classified as essential services and given an exemption to operate in Lagos.


He said the government has shown commitment in seeing to the growth of the industry given its role in powering health facilities, renewable energy included in the sectors that have benefited from palliatives and government funding support. He also acknowledged the efforts of petroleum products pricing and the move to cost-reflective tariffs for electricity.


He gave a further presentation on the role of insurance in Solar Energy for all, the renewable energy expert said insurance is essential for a viable economy. Without it, businesses and individuals would be unable to take the risk and protect their assets, and bankers have adopted it.


Concerning opportunities available in insurance for renewable energy, he highlighted the following;

  • The risk inherent in the Energy-Water- Food Nexus
  • The insurance sector exploring opportunities in Climate Change, Health, Natural Resources, Microinsurance, Emerging Manmade Risks, Recycling, Lifelong Income, Environmental Liability, Internal Efficiency (IWG UNEP FI)
  • Insurance shaking hands with the Renewable energy sector


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The Guest speaker, Mrs. Shalom  Asuquo-Ankoh, CEO Travellab Nigeria Limited said in her remarks that between 2012-2013 the music industry grew in leaps and bounds and became commercial because it was downloadable. From  2013 to 2014 the telecom industry in Nigeria incorporated the music industry into its market. Before now she noted that the music industry faced challenges of piracy and the introduction of ringtones opened up the market and sustained the industry.  


Looking at sustainability, she believed that with the COVID-19 pandemic it was an opportunity for rethinking and re-strategizing the Nigerian economy, and believed it was a catalyst for innovative thinking.  


According to her, when talking about sustainability there is a need for availability, affordability and accessibility. For her, the advent of technology has provided opportunities for adopting ways in driving seamless insurance services.  we need to look at things like AI, drones which is generation Z, also looking at the tourism space are the insurance company catching up to all these.


"There are bigger opportunities in the domestic travel space. How do we think about the young generation in terms of insurance risk,  the insurance companies should collaborate with the music industry, tourism,  and need to be innovative, creating newer products".


She added that there is a need to ensure that insurance is affordable to market women, to innovate, to create new products and embrace technology. 


The MD/CEO, Financial Institution Training Centre (FITC), Nigeria Mrs. Chizor Malize said the realities and challenges facing insurance company are different  from what happened in the past


She said technology has involved so much and wide which is why technology is still a key investment. Finding innovative ways to bring more people to the insurance sector was key at this time.


She said the insurance industry should think of innovation that brings people into the sector thereby achieving more than 25% penetration, educating the market, the industry and potentials consumers.


"The industry must become more innovative in delivering and ensuring that there is product innovation, growth is also critical to the insurance sector," Chizor Malize said.


She further stated that the insurance industry needs to find a way to drive product innovation that is required, also the industry must pay attention to customer services, feedback or responses,  creating innovative products, engaging customers to ensure delivery to the client is satisfied. 


She said, there are huge opportunities for insurance companies and regulators to deepen knowledge and engagement, which will create more awareness,  embracing consumer literacy and consumer education, training, capability,  knowledge- capacity building and capacity development which are all very important aspects of the industry.


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