Three (3) Reasons Insurers Performed in 2020 Despite COVID-19 Pandemic

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Tuesday, November 30, 2021 / 10:38 AM /  OpEd By Ekerete Ola Gam-Ikon  / Header Image Credit: iStock

 

The fears were real and the expectations were high that the insurance sector in Nigeria, like other sectors, would go through unprecedented challenges as COVID-19 pandemic ravaged us on all sides.

 

Virtual conversations, webinars and news reports conveyed increased uncertainties, which led to critical decisions. For example, the outstanding action where insurers that were struggling with meeting recapitalization requirements donated N500m and provided insurance coverage for health professionals to support the fight of the Federal Government against COVID-19 pandemic remains instructive in terms of how the insurance sector needs to engage Nigerians and its leadership.

 

This may have become the turning point for the insurance sector as the President and Commander-in-Chief of the Armed Forces mentioned the support of the insurance sector in his April 2020 Presidential Address and in May, the new Commissioner for Insurance got his substantive position announced. The confidence of the insurance sector players and regulator was therefore boosted.

 

Reason #1

Investing in or contributing to where you expect results is essential! So this is the first factor that can be attributed to the success the insurance sector recorded in 2020 financial year and set the path for more growth in the coming years.

 

With the confidence won, more conversations on how to respond to customers amidst the pandemic became focused on the opportunities that emerged, from Nigerians requesting more information about insurance, especially Health and Life Insurance.

 

Organizations were even eager to have Group Life Insurance in place for their employees, in line with the law, before letting them resume work after the lockdown.

 

Enlightenment of the insuring public became part of the regular activities of some insurance companies and the regulator was on hand to support these initiatives and events.


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Reason #2

Here's the second factor responsible for the successes achieved by insurers: Increased engagement of existing and potential policyholders in a manner of providing answers to their questions and putting to rest anxieties in certain areas. For example, the heavy rumblings in the agricultural sector about investments through crowdfunding, which many thought were covered by insurers while unfortunately were not, because traditional insurers do not cover speculative risks.

 

Massive losses in agriculture, especially the deaths of pigs and chickens in Lagos amongst others across the country forced more discussions and actions on agric insurance.

 

Little surprise, a few leading insurers were getting the regulator's approval to launch their health and agric insurance divisions while the pandemic persisted.

 

In the midst of COVID-19 pandemic, the insurance sector was creating new things rather than wait for the failures of some companies that were sure not to meet the recapitalization deadline.

 

NAICOM proved its confidence in the future of the insurance sector by announcing the issuance of six new insurance entities including four insurers, one reinsurer and one Takaful.

 

Additionally, NAICOM announced that insurance incumbents could offer  microinsurance if they met their conditions.

 

The year that started with fears and concerns was indeed ending with positives on all fronts except the issues that generally affected the global and national economies.

 

Reason #3

Doing business with customers online and without the personal touch often associated with insurance stood out as the most important reason the insurance sector recorded successes. This is especially because the insurance sector did not know the capacity it had to deploy and use technology to enable their operations but the challenges presented by the pandemic brought out the best in the best amongst our insurers.

 

Amidst the frustrations and threats the COVID-19 pandemic meted to us, some insurers provided accesses to their policyholders which they did not know they could do. Even policy conditions were tested and, when insurers rose to the occasions, policyholders were happy to share their good news on social media platforms thereby encouraging others to take up insurance policies.

 

More Work Ahead

Notwithstanding the successes recorded both in financial and non-financial terms, the insurance sector still has a lot of work to do to reduce the trust deficit and ensure Nigerians have the confidence to respond to any advertisement put forward by any insurer without asking for evidences.

 

Is it not intriguing that despite paying out N9b of the estimated N20b claims to policyholders who suffered various losses resulting from the violent destructions of properties that followed #EndSARS protests in October 2020, the insuring public has remained unimpressed and expects more from the insurance sector.

 

I think the narratives of the insurance sector players need to change, while many Nigerians without insurance should be offered insurance products that suit their lifestyles in the way they prefer to be served and serviced.


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Like it is said, the reward for hard work is more work, so the insurance regulator and operators should be even more engaging as the opportunities have just expanded.

 

Evidently, more investment in digitization and winning the trust of Nigerians should occupy the minds of every stakeholder in insurance as the sector goes into 2022, of course with the successes achieved this year as well.

 

About The Author 

Ekerete Olawoye Gam-Ikon, MNIM, CPP, is a management consultant with a specialization in Strategy and Insurance. You can contact him via e:mail olagamola@gmail.com and mobile +234-806-648-1111 

 

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