By Chiamaka Ajeamo [email protected] 08060655687
Following the many business disruptions such as the COVID-19 pandemic, #EndSARS riots among others, the Nigerian insurance industry witnessed in 2020, the year 2021 was one that started off with much anticipation, hopes and expectations towards repositioning the sector for recovery and growth.
The year 2020 was indeed a tough one for the industry as operators experienced numerous challenges occasioned by the pandemic and its related business disruptions. So, one can literally feel the enthusiasm of operators as they welcomed 2021; a year that avails them the opportunity to revamp their business operations to flow with the current trends ushered in by the COVID-19.
In fact, for most of the stakeholders, 2021 was tagged “the year of recovery and rebuilding for the insurance industry”. This tag formed most of the themes for discussions at the various events the industry held in the year.
Although the news of the transmutation of COVID-19 into Omicron and Delta variants seemed to have heightened the pandemic challenges forcing the country into the fourth wave of the virus as declared by the Nigeria Centre for Disease Control (NCDC), insurers were still upbeat about the huge opportunities the year heralds.
The industry bubbled with activities and events; all focusing on building a new insurance industry and how to advance and leverage technologies that would enable the sector flourish in the face of the new business trends.
For example, the industry hosted the 47th African Insurance Organisation (AIO) conference with the theme, “Rebuilding African Economy, the Insurance Perspective.” The Chartered Insurance Institute of Nigeria (CIIN) anchored the theme of its professional’s forum for 2021 on “The Nigerian Insurance Industry in the Digital Era”. The Nigerian Council of Registered Insurance Brokers (NCRIB) anchored the theme of its annual conference and exhibition on, “Innovation, Strategy and opportunity.”
The above instances revealed operators’ optimism and expectations for the year as a year of new business beginnings with revamping and innovation.
Industry 2021 agenda
Earlier in the year, the industry regulator; the National Insurance Commission (NAICOM) released a 3-year strategic plan on what to expect in 2021 and beyond.
According to NAICOM, the plan which aims to transform the industry within the period of execution (2021-2023) has its foundation on five pillars, namely: entrenching effective and efficient service delivery; ensuring safe, sound and stable insurance sector; adequately protecting policyholders and public interest; improving trust and confidence in the insurance sector; encouraging innovation, and promotion of insurance market development.
The Commissioner of Insurance and Chief Executive Officer, NAICOM, Sunday Thomas, while speaking at a seminar in Lagos, explained that the plan was birthed due to unexpected events such as; COVID-19 pandemic, the #EndSARS protests, and the rise in kidnappings, banditry, communal tensions and conflicts, occurring since the development of its last strategic plan implemented between 2016 – 2020.
According to Thomas, these events have ushered in the new normal, altering the status quo on how the industry conducts its business going forward and the corresponding regulatory response.
“The present challenges brought about by the pandemic in the economy in general and our industry, in particular, is enormous. Critical measures are, therefore, required of us that sit on top of the pyramid. It must be emphasised that the insurance sector require more urgent recovery post COVID – 19 to support the recovery and restoration of other businesses.
“The times in which we require more prudent management of resources in order to meet all stakeholders’ expectations including ensuring quality return on investments. Our focus must shift to service delivery, which will make our companies seek more reasons to settle client’s claims and fewer reasons for repudiation of claims.”
“The era of huge backlog of claims should no longer be associated with our companies and, while the Commission is profiling companies with huge unsettled claims for necessary regulatory action, companies that are responsive to the plight of their clients in prompt settlement of claims are encouraged to sustain the good business conduct.”
NAICOM, during the year, also launched its online portal in September to encourage the digitalisation agenda of the sector.
The Commission charged all operators to integrate their operations with the portal, warning that any company that was lagging behind in the technology era will not thrive in the new business order.
#EndSARS claims
This was a major feat achieved by the industry in 2021 as the industry paid a total of N9 billion claims to those who suffered losses during the #EndSARS riots.
According to the Chairman Nigeria Insurers Association (NIA), Ganiyu Musa, insurance companies settled 718 claims on vandalisation; 93 cases on looting; 113 on theft; and 136 on loss of cash, three death claims were paid while claims were paid on other property losses, 99 claims were settled on malicious damage; eight claims on business interruption; 455 claims on burglary attack and 912 claims on fire and burnt site.
It is worthy to note that this claims payment and provision of N11 billion life insurance cover to the frontline health workers during the COVID-19 outbreak, as well as the successful outcome of the AIO conference, earned the industry very high recognition by President Muhammadu Buhari.
Stakeholders’ reaction
Expressing their views on the performance of the sector, industry experts affirmed the industry did well in 2021 with respect to an increased level of public discourse, yet left lots of work undone based on the opportunities that existed to address the age-long issues of trust deficit and insurance penetration.
Speaking to Daily Sun, Insurance expert and Consultant, Ekerete Gam-Ikon, appraising the sector in 2021, said “the critical point to start from is to ask the question: What was the insurance sector looking to achieve in 2021?
“The regulator, NAICOM gave us a 3-year strategic plan, so it will be a good place to look at for this appraisal. Of course, NAICOM could not continue the recapitalisation process and that was a major setback in trying to address the problem of public apathy against insurance. Even as NAICOM embarked on public engagements including the partnerships with the Federal Fire Service (FFS) and Federal Road Safety Corps (FRSC), and agreements with states and FCT, the insurance sector has not succeeded in winning public confidence because efforts at claims settlement have largely remained mere words as long as the public is concerned.
“Interestingly, claims payments made by insurers to those affected by #EndSARS violence seem not to have received the expected public endorsement and confidence, simply showing that much more work needs to be done.
“We may not yet know what has happened in terms of premium generation and insurance density for 2021 but the Life category is expected to further increase due to the increased compliance with the Group Life Assurance for employees as enshrined in the Pensions Reforms Act 2014. The same cannot be said about motor and marine insurance classes though the law is clear that they are compulsory.
“Going forward, the insurance sector needs to do more about seizing opportune moments like building collapses and fire incidents to positively engage the populace.
“Operators have to be deliberate about getting more Nigerians onboard especially those that have never had any insurance policy.
“Available technology and digital solutions can ease the burden of delays and denials associated with the insurance sector and more insurers have to be ready to respond to the questions of the insuring public in a collaborative manner.
“In 2022, insurance operators should be ready to engage with tech solutions providers that can enable them to get access to customers faster,” Gam-Ikon stated.
