It was mixed feelings for me as I read a BusinessDay report that quoted the Deputy Commissioner, Technical (NAICOM), Mr. Sunday Thomas as stating that there are only two million insurance policyholders out of Nigeria’s estimated 180 million population. Firstly, I felt happy that our assertion had finally been given official seal. About seven years ago, the then Commissioner for Insurance said there were 1.5m policyholders! If we consciously work on the numbers and make it the new benchmark for insurers, the trip towards insurance penetration will be well on course.
On the flip side, the statement by Mr. Thomas left the same bitter taste that often arises when I read from regulators – lamentations upon lamentations.
So who should give us the hope we need if the regulator laments?
This latter reaction is what prompted this submission. If the insurance philosophy must be accepted by Nigerians, we must “change the narratives”, at least we understand that phrase. Insurance professionals, practitioners and regulators must understand that no one is interested in your lamentations and sad stories. We have enough in Nigeria that can create a successful nationwide competition, so let us save ourselves further depression. I am always reminded, at times like this, of the story of an insurance company I once served at; there was a hostile change of Management which also affected the Board. Two Annual General Meetings after the explosion, the Company leaders were still referring to it as the reason for poor performance until a shareholder drew attention to it, emphasizing that new customers present at the AGM cocktail were uncomfortable with sad references to the past. From that day, the narratives changed!
So, here are 7 critical actions I think NAICOM must take to earn acceptance for the insurance industry and deepen insurance penetration:
- Revamp its strategy and hinge implementation on promoting excellent customer experience to increase the number of persons who embrace insurance and have positive assertions; turn them into ambassadors and it should not matter whether they are in the Public or Private sector;
- Recognize communication as the principal reason for non-acceptance of insurance in Nigeria and engage PR experts to develop and articulate an all encompassing multi-year plan that will deliver. The communication and the communicator are critical in this regard because the professionals and companies that had not been believed need not be in the line of such communication;
- Market development has since become a professionally managed activity that requires an in-depth appraisal of the current situation for which NAICOM needs to engage renowned experts. A study funded by interested international development organisations can only be facilitated by NAICOM;
- Identity management remains a national problem yet NAICOM can lead the way out of this for Nigeria by simply adopting an innovative approach that encourages Nigerians from the President to the leadership at ward levels to have one form of insurance or the other. Potentially, insurance is the one business that has the tendency to capture most of our population and this can be done;
- There is an increasing perception of the public that the insurance industry is a fraternity where members cover up one another, including the regulator acting in favour of an operator. What more reasons can NAICOM give for letting its intervention in the management of “failed” insurers extend beyond 3 years while many insolvent companies are allowed to continue operating and deepen the confidence crisis between the industry and customers. The latter actually have experiences that they expect sanctions from NAICOM but nothing gets done, hence creating that “cover up” impression;
- Speaking positively about the good developments in terms of innovative product development and service delivery should be NAICOM’s first call at this time. An insurer has recently launched an Own Damage Third Party Motor Insurance product which addresses the issue motorists had with the old (existing) policy but NAICOM which gave approval for it does not seem to be talking about it. Also, Takaful (Islamic Insurance) which offers payback that insurance customers had been agitating for requires NAICOM’s loud broadcast beyond an event. Could the current NAICOM Helsman understand why he should and indeed appear on the morning TV shows to speak about this?
- Support for youth engagement programmes in Nigeria has become inevitable for any one, organisation or government that desires to succeed. The Commission needs to get involve in such social responsibility with a view to earning the acceptance of the increasing youth population especially as some insurers and brokers are taking actions in this direction.
I have deliberately not mentioned “Taking control of the source of insurance (Motor Vehicle Licensing Offices)” because I assume current efforts will address it.
All said, some positive actions by NAICOM to give the insuring public needed confidence is overdue. Issue new licences if you will not withdraw any to ensure that those who are currently working but not paid regularly can be better employed.
2018 could be the year for the insurance industry despite the gloomy outlook if the things listed above could be acted on by NAICOM.
We are watching with due vigilance!
About the Author
Ekerete Ola Gam-Ikon MNIM, CPP, is a strategy & insurance consultant. He can be reached vide email@example.com