Given the subject of this conference “The Role of the African Insurance Industry to Support the Economic Development of African Countries” and the discussions so far looking at other markets in Africa, what are you taking home as a Nigerian?
What I have seen, which is going to be a great challenge to us in Nigeria is the fact that the Nigerian government has not taken the right step and right interest in insurance industry. We have seen many papers delivered and comparative figures show that a lot of countries are ahead of us; you can see South Africa, Kenya, Egypt and even Morocco.
What we found out is that as far our business is concerned, government is our biggest buyer and the biggest insured and you I know that kind of interest they have put in, and even when they purchase insurance for their assets or the life of their employees, payment is a problem. And when premium is not paid, what is the element of investment to the insurance companies, which at the end of the day suppose to contribute to our bottom line and at the same time directly or indirectly to the economy.
Don’t forget that insurance is supposed to be one of the biggest sources of employment which you and I know, is a major headache for our development as a nation. But if insurance is being developed as is being done in other economies as we have seen from this Conference, definitely, it is supposed to a big industry that should absorb our growing youth population and other classes of people in the society.
My take is that we need to have more government interest in insurance, just like they have in our cousin industry, the bank. They didn’t see insurance as an industry to grow and develop, and once this can change, they will know that as far as the financial services sector is concerned insurance will be the biggest contributor to the GDP and other social benefits needed in an economy.
With a lot of discussion on micro insurance and its capability to impact on the life of Africans, what is the potential of this market in Nigerian and what are you doing as a company?
Royal Exchange Prudential as you may be aware, is a major service provider of life insurance, and micro insurance itself is very much a part of life insurance because it is targeted at individual life policies and that is our core area of business.
The potential is huge and given our population in Nigeria, we cannot but develop this aspect of the market. And I can tell you that in Royal Exchange, we have got quite a lot of individual life products more than many of our competitors in the market.
Therefore I can confidently tell you that our efforts to bring these individual life products through our agency and branch offices nationwide are really deepening our penetration and we have also keyed into the National Insurance Commission (NAICOM) initiatives which are targeted at increasing market penetration.
With that, Royal Exchange as a Company is contributing hugely to insurance penetration through product develop developments in life business, general business, and health care lines.
We are almost at the half of the year, how has the business been in terms of premium and new businesses?
I can tell you, which I know, is also the perception of other operators: it has never been this good in terms of premium collection, and this no doubt is as a result of the NAICOM policy on premium collection which became effective January. This policy on “On No Premium No Cover”, has never been driven like this before.
It has been a good experience in terms of liquidity for so many insurance companies, but in the other hand, there has been a lot of reluctance on the part of the insured because they never prepared for it and secondly is the fact that they never thought it was going to be driven so seriously.
You know it’s not the first time this policy was been projected, this is about the fourth or fifth time the regulator will insist on it, but it has never been driven like this as a matter of policy and this is where the difference has come.”
The new businesses are coming in, the premiums are also coming in, but I can tell you that the biggest customer we have is still not adjusting to it. So many federal government parastatals have still not paid their premium up till now and they are insisting to have their cover effective January. They group life insurance has not been closed up till now, and the same with the general business accounts.
But I know that from next year, it is going to be much better but as far as collection of premium is concerned, it’s been a wonderful experience for most of the companies including Royal Exchange.