BusinessDay 22 Aug 2018

Wednesday 22 August 2018
C002D5556
BUSINESS DAY
27
E-mail: insurancetoday@businessdayonline.com
Insurers emphasise trusts, innovation,
response time in driving penetration
Stories by
Modestus Anaesoronye
Insurance operators
in the country have
agreed that operators
must build trust, bring
in innovation in product
design and distribution,
as well as claims response
time to increase acceptability
and penetration. These
were the views of Yetunde
Ilori, director general, Nigerian
Insurers (NIA); Moruf
Apamapa, managing director/CEO,
Sunu Assurances
and Jide Orimolade, managing
director/CEO, Law Union
and Rock Insurance Plc.
The texperts, who spoke at
the 3rd National Conference
of the National Association
of Insurance and Pension
Correspondents (NAIPCO)
in Lagos, added that since
the business of insurance
is about utmost good faith,
then, insurers must earn the
trust of the people to deepen
insurance penetration.
The reason Nigerians
are neglecting insurance,
according to Yetunde Ilori,
has to do with the negative
perception they have about
insurance services, stating
that there is no regulatory
enforcement of insurance
unlike pension. Misconception
and misrepresentation,
she said, is another very serious
problem that must be
quickly addressed by operators
in the sector.
“It is high time insurers
understand what the buyers
are looking for; how do they
want it as well as where do
they want it so that this will
drive a change in their behavioural
pattern when it comes
to deploying their limited
resources,” she stated.
Moreover, she said, if insurance
products are readily
accessible to the people, it
will attract more people and
that if it’s deployed through
mobile phones and a familiar
terrain such as the banks,
people will take advantage of
this and embrace insurance,
thereby, deepening penetration
as well contributing to
nation’s economy.
When developing insurance
products, she said,
innovation and creativity
should be taken into consideration,
noting that a product
should be able to address
the needs of the customer;
it should be kept simply and
flexible. She equally charged
operators to offer bundled
and complementary products
that will make insurance
attractive to Nigerians.
She further stated that
products should be scaled
down in such a way that it
addresses the immediate
needs, she added that, insurance
pricing should be
scientific and commensurate
discounts and incentives
should be put in place so that
people can love to enjoy it.
“Insurance Companies,
Association and Regulators
should be responsive when
it comes to complaints and
disputes resolution. Those
that sell insurance should be
people that are knowledgeable
and have high sense of
honesty who will not deceive
the buyers. Since Information
and Communication
Technology (ICT) is the in
thing, insurance company
should invest more in ICT so
that people can leverage on
that and be reached when
they want it as they want it.”
she stressed.
On his part, Moruf Apampa
said, insurers must know
their customers, to be able
to carve products that address
their immediate needs,
adding that, it is high time
operators focus on the retail
business.
According to him, “the
most important thing for us
Climate change heightens need for
disaster risk finance, insurance
Insurance and Pension Stakeholders at a conference on “Role of Stakeholders in Developing the sectors in Lagos
(insurance companies) to
do is to actually first know
our customers; how do we
reach them and how to serve
them because if you don’t
know your customer, you
can’t reach and serve them.
Insurance penetration is currently
below 1.5 per cent, and
yet, operators are focusing
on the corporate side of the
business. What is happening
to the retail side of the business;
the market women; the
trade associations? We need
to identify these people and
then device means to reach
them.”
Apampa stated that insurance
policy rates might not
necessarily be a challenge;
he believes insurers are not
doing enough to convince
the people to buy insurance.
“Okada rider can afford
N2, 000 pepper soups in a day
and the same Okada rider
cannot afford to buy annual
insurance for N1, 500. What
we need to do as I said earlier,
is to know these customers.
Now, they are willing to pay,
but how do we make them
to pay? They only want two
things, which are, investment
and protection,” he stressed.
He therefore urged underwriting
firms to make
their products accessible and
attractive to these people, he
called on operators to be responsive
to claims settlement
as these can go a long way to
make Nigerians build their
trust in insurance services.
To him, “We have to be
very fast in terms of paying
claims. In terms of product
innovation, I think we have to
be very innovative. What kind
of products are we churning
out? Are these products really
addressing the need of the
people? These are questions
that must be answered. The
only thing we can give to
these people is to get their
trust and when you get their
trust, they can give you their
money.”
Recent natural disasters
across the world
have raised concern
on the need to prepare
for impact of climate
change with insurance for risk
mitigation. While for many
the extreme weather was no
more than a mild inconvenience,
for millions of smallscale
farmers, their families
and communities in vulnerable
countries, climate change
is already having a devastating
impact. It is clear there is
an urgent need for climate
and disaster risk finance and
insurance which can build
resilience and help mitigate
the worst effects, according a
report on Insurance Impact
Network.
According to the recently-formed
InsuResilience
Global Partnership, 26 million
people are forced into
poverty each year as a result
of climate-related disasters.
The Insurance Development
Forum (IDF), launched two
years ago, estimates that 70
percent of economic losses
from natural hazards remain
uninsured, and in middleand
low-income countries
the uninsured proportion of
economic losses often exceeds
90 percent.
None of this is new to the
MiN, whose members have
been collaborating to ensure
greater resilience through insurance
cover for more than
ten years. Working through a
range of partnerships such as
the UN Environment’s Principles
for Sustainable Insurance
(PSI) initiative, the MiN
aims to close the insurance
protection gap and build resilience
to shocks through
truly inclusive insurance.
Since joining forces a year
ago, the MiN and UN-PSI
have worked together to support
the development and
expansion of sustainable,
socially inclusive insurance
services.
Given the essential role
that inclusive insurance
can play in achieving the
SDGs, it is small wonder
that new organisations and
partnerships are coming
into play. It’s encouraging
to see increasing collaboration
between civil society,
governments, UN agencies,
insurance companies and
regulators. Stephan Opitz
of long-standing MiN member
KfW Development Bank
welcomes new initiatives
“to develop comprehensive
and complementary solutions
for and with our partners
from civil society and
the private sector. Solutions
to give quick support to people
who need it most in situations
that are threatening
their livelihoods”
Some, however, caution
against focusing too much on
insurance as a silver bullet to
tackling climate change and
natural disasters. Inclusive
risk management strategies
such as mitigation and prevention,
which go ‘beyond
insurance’ are just as important,
says Josh Ling, director
of Financial Inclusion at Mercy
Corps, another member of
the MiN. “Savings are an important
tool to provide a buffer
to smaller shocks, and can
play a complementary role
to insurance products. Risk
mitigation solutions must be
considered first and should
seek ways to avoid the climate
exposure altogether.”
Bridging insurance gap
through the schools
The level of ignorance
about the benefits
of insurance and its
role in the economic
development of the society
in this part of the world is no
doubt very high. This accounts
for why majority of
the populace, even among
the educated elite still do not
find need for insurance or
use insurance to protect their
dependants or assets, despite
the age of the industry in Nigeria.
While this is a different
situation in most advanced
economies including South
Africa, the case for Nigeria
which has made the country
one of the least insurance
conscious countries in the
continent in terms of penetration
given its population,
has continued to engage the
thought of stakeholders.
The challenge therefore
has been on how best to build
insurance culture such that
right from childhood citizens
would begin to understand
and appreciate the importance
of having protection
through insurance.