‘Take insurance to protect yourself, assets against terrorism, political risk’

Mr. Mayowa Adeduro

Given recent developments in our environment, particularly with insurgency, Insurance operators must begin to create the necessary awareness about available covers for political risks, kidnapping, terrorism and other mass events to protect people’s life and properties. Mayowa Adeduro, managing director/CEO, Anchor Insurance Limited in this interview with Modestus Anaesoronye in Tunisia bares his mind on issues in the industry. Excerpts…

The downturn in the economy is slowing down specific consumptions like insurance, how do you perceive the situation?Nigeria’s economic situation this time is challenging, but we see it as a passing phase within the context of a broad economic view. We see it as a phase that will soon go away and a new environment engendered that will also encourage people to do insurance. It is true that the people are prioritising their expense because first of all you have to ensure that you have food and other basic things before you think of insurance. But incidentally insurance is very important because as you are thinking of security over your life and properties, you should also be thinking of insurance.

As a company, you must be thinking outside the box on how to manage the situation to remain in operation and create shareholder value. What is Anchor doing in this regard?We have looked at the situation, we have looked at the history of insurance in Nigeria and even within the context of Africa and we have seen that innovation and bringing out products that address the momentary challenge of average Nigerians now and in the future, is the way to go. One of the products we have is called loss of employment income insurance, because, for young graduates who are able to secure employment today, the next fear in their minds are what will happen should the job go. That is part of the innovation. And in spite of these challenges in the operating environment, we have seen some classes of our business growing significantly. And this has been as result innovation just like encouraging people to buy third party motor insurance cover using recharge card. Those are the things we think can bring a change to the insurance industry, that is, innovation and developing products that will address poverty as well as meet the needs of the middle class.

Issues bothering on political risks, terrorism was at the front burner at the recently concluded African Insurance Organisation Conference, how prepared is Nigeria for this?
The first thing is enlightenment campaign. People must be made to be aware that these mass events will always come up; it is like a cycle. So, we must make people understand that these mass events exist and that it is not ancestral curse. Of recent, we had issue of contamination of drinks in Ondo State, and some people were saying “it is ancestral, and that the people were dying because the gods were annoyed with them”. The people must understand that these mass events will always come up once in a while. We must make people appreciate the fact that these mass events are bound to happen and that they should get insurance cover to protect themselves against it. But we are so religious in Nigeria that when things like this happen, an average Nigerian will say “it is not my portion”. However, the people should also think whether it is the portion of those people who were in the church and they throw bomb into the church. We must let them know that there are
insurance covers for such incidences. Life insurance covers such things. The only thing not covered is suicide.
Another high point of the conference is the thinking that having political risk and terrorism pool will support underwriting capacity and help build investor confidence in the continent? What is your take on this?

I think we are getting there in Nigeria. Fr more than 10 years after the local content policy, you will find out that a lot of us are passing these premiums outside to the London market given the fact that our capacity is still very small but we are rising up to the challenge. We have Nigerian energy pool now; we have aviation pool, and liability pool. So, the idea of coming up with a pool for mass events or natural catastrophe is quite germane in our country and I believe the Nigerian insurance practitioners can rise up to the challenge.

Considering the low level of disposable income among majority of Nigerians, and the need to ensure that more people embrace insurance, what is your company doing in the area of micro insurance?At Anchor Insurance, we had developed micro insurance products before many people started talking about it. We just did a small study to see the event of motorcycle accident within the country and realised that a lot of people died from this particular accident especially in Akwa Ibom, where we conducted the research. We also found out that a lot of people died due to their inability to pay just N5000 as hospital bill. So we came up with a product called ‘Anchor Aspire’ and the product was very successful in Akwa Ibom. But the problem we have in our environment is the challenge of infrastructure, that is, the technology to drive some of these products is not within the reach of potential insurers. If you say you want to have agents in all the 774 local government areas in the country to speak to the people in their local languages, I believe you know the implication of that. But I think we are getting there, it will only take some time. But like I said when it comes to things like this, government needs to work hand in hand with the providers of insurance services. Government must be able to tell the people that we are with the insurance industry in the provision of these services and assure them that should the unexpected happens, they will be duly compensated.

Nigeria has witnessed 16 years of democratic rule between 1999 and 2015, how will you assess the insurance industry during this period?Thank God for democracy, but I must give credit to the National Insurance Commission (NAICOM) in the last eight years for the robust regulatory environment the country has engendered during this period. As a result of democratic rule, you can be sure that if you are appointed into NAICOM, nobody will remove you until you finished serving your term. That can be linked to the democratic principles in place. But democracy in itself may not necessarily be the permanent solution to Nigeria’s problem. I think our problem is leadership. At any given point in time, we need to have that discerning leadership. That leadership that look beyond issue of partisan politics, I think that is best for us. The insurance practitioners are very happy with the smooth transition of government in the country. We are happy there is no chaos because no business will survive in an environment of chaos and instability.

What assurances are you giving to your customers; that you will be there for them when need you most?I want to assure our customers and clients that just like our motto which is “where insurance works” we have demonstrated this over and over again. It is not just about the number of advertisement you can run or how beautiful your building is, it is about your capacity and willingness to meet the needs of customers as at when due. We have instances where we issue claims cheque of N44 million within three days. We are there as practitioners to demonstrate integrity, to demonstrate willingness and to demonstrate capacity that insurance indeed works in Anchor.