Buchi Ubani
The insurance landscape in Nigeria has
tremendously evolved and this growth can be attributed to
certain
policies introduced to the industry. Contributions from the government
and governing bodies, which were positively welcomed by the masses, have
turned out to be impressive over the years.
Commendably, the rising rate of response
of Nigerians to insurance and insurance policies is responsible for the
increased level of awareness of insurance, especially in the corporate
world.
Many institutions now realise the need
for insurance cover on their assets and personnel, as well as motor
insurance and group life policies.
In a recent interview, the Chief
Executive, Stanbic IBTC Insurance Brokers Limited, Anselem Igbo, noted
that the implementation of compulsory insurance by the National
Insurance Commission (NAICOM) is a crucial driver for increased
insurance acceptance in the country.
He said: “First, the regulator is part
of the federal government. Looking back at the last two decades,
insurance has gained more acceptance, as the efforts of NAICOM and other
industry players have yielded some results.
“The industry is now able to attract
professionals from all fields of life. Individuals of different
professions like medical doctors, lawyers, engineers, accountants, among
others, have become a part of the industry and they all contribute
their different ideas on how to move the industry forward.”
Igbo, noted that the industry had
achieved much, with the prompt payment of genuine claims by insurance
companies, which has led to increased trust in insurance products.
He said: “Even in this pandemic, and
despite the lockdown, most insurance companies have performed creditably
well by paying the genuine claims, once they are fully documented.
However, there is a continuous need to grow the market to attract the
younger generation. With current digitalisation, the purchase of
personal lines insurance will become seamless and more attractive to the
younger, active and working population.”
When asked about digitalisation, Igbo stated that it had positively impacted the insurance landscape.
He added: “Insurance companies now have their motor insurance automated for third party motor insurance cover. For comprehensive protection, there are still some processes before full confirmation of cover can be granted. It is certain that in the no-distant future, some class of motor insurance claims will be fully automated and claims paid seamlessly.
He added: “Insurance companies now have their motor insurance automated for third party motor insurance cover. For comprehensive protection, there are still some processes before full confirmation of cover can be granted. It is certain that in the no-distant future, some class of motor insurance claims will be fully automated and claims paid seamlessly.
“Also, frontline insurance companies are
putting in efforts towards digitalisation. They have launched one form
of App or the other, to deepen digitalisation in the industry.
Technology is expensive, no doubt, but if the sector can pool resources
together and have shared services where necessary, the cost of
digitalisation will reduce significantly.”
According to Igbo, the industry players
can take charge to propel the industry by delivering efficient services
and investing in technology to drive the business, without aimlessly
waiting for the government to change the narrative. “All that is needed
from the government and the regulator will only be an enabling
environment to amend the laws and give necessary approval for
digitalisation. The COVID-19 experience has proven that innovation is
greatly needed in the insurance industry,” Igbo affirmed.
At these uncertain times, the insurance
industry, as well as many others, have faced a bit of downtime for
operations that excluded digitalisation. The COVID-19 pandemic was
unprecedented and minimal preparation was made for it. Sadly, it has in
one way or the other affected several businesses and industries,
insurance inclusive.
One limitation was that the level of
insurance transactions slowed down for most insurance companies while
working remotely. Although little impact was felt on the generation of
policy documents, the significant fall in service was in the delivery of
hard copy documents. This is because the insurance service is mostly
reliant on courier services, which were partially grounded during the
lockdown, except for essential deliveries.
For significant risks that involve
coinsurance from multiple companies, all of the coinsurers’ signatures
on policy documents and endorsements are needed. However, this has been
very difficult to effect during this period, as the social distancing
guidelines did not encourage bringing multiple insurers together.
During the total lockdown, a few
insurers announced a possible ‘give-back’ for Personal Motor Insurance,
although this was limited to the Comprehensive Insurance only. The give
back could be as much as a one-month premium rebate to the policyholders
who were constrained to ground their vehicles in strict compliance with
the lockdown order.
The insurance industry has immensely
contributed positively to the Nigerian economy, even in these difficult
times. Unfortunately, there is currently no known ‘pandemic insurance’
sold in Nigeria. It is certainly not common, although there have been
sufficient events in the past that should have warned businesses that
the day of COVID-19, and its likes, could come.
The foremost insurance brokers Chief
Executive suggested that the pandemic insurance, along with a business
interruption insurance, may help cushion the effects of a pandemic. In
his words: “An insurer interested in transacting this product only needs
to show evidence of an adequate reinsurance arrangement and the
satisfaction of other conditions as may be required from time to time.
Considering the increase in fraudulent activities and event
cancellations as a result of the pandemic, insurance brokers should
encourage their clients to take up cybercrime and event cancellation
policies.”
Every challenge presents its
opportunities. The Covid-19 pandemic is no different. Recently, the
industry regulator – NAICOM – examined the impact of the pandemic on
insurance companies and came up with new guidelines on the
recapitalisation for the industry.
This includes a more reduced
recapitalisation limit to be met by 31 December 2020, which was the
initially advised date. However, the companies will still be required to
achieve full recapitalisation, but at a later date in Q3, 2021.
The Commissioner, NAICOM, Mr Sunday Thomas, also said that there would be a change in regulation post-COVID-19.
According to him, the Commission will also make the consolidation initiative focus on designing products that are more suitable for such unexpected events. In NAICOM’s views, the pandemic has thrown up challenges which, if embraced by the operators, would reposition the industry for better growth and development. There is also a waiver on the deadlines for some regulatory reports, with NAICOM giving some months of extension.
According to him, the Commission will also make the consolidation initiative focus on designing products that are more suitable for such unexpected events. In NAICOM’s views, the pandemic has thrown up challenges which, if embraced by the operators, would reposition the industry for better growth and development. There is also a waiver on the deadlines for some regulatory reports, with NAICOM giving some months of extension.
In the area of distribution, direct
marketing staff and some insurance brokerage firms who rely heavily on
physical contact for selling of insurance were deeply impacted by the
pandemic.
This mode of marketing is not allowed by
some insurance brokers and clients who do not encourage visits. There
is every possibility of repurposing some business development staff who
rely on physical contact marketing. Another impact of COVID-19 is that
there is an increased uptake in life insurance policies for both
corporate and personal lines.
Igbo, noted that the speedy growth of the insurance landscape in
Nigeria is largely dependent on the expansion of technology.
Digitalisation must be embraced to build better and faster solutions
that will attract and cater to the insurance needs of the masses.
No comments :
Post a Comment