Insurance recapitalisation, though halted inspired confidence in consumers – Orimolade
Stanbic IBTC Insurance Limited is one of the newly licensed underwriting companies that came into the industry in the course of the sectors’ recapitalisation exercise. Akinjide Orimolade, chief executive(CE) of the company in this interview with Modestus Anaesoronye shares his vision for the company, expectation of the market, outlook for 2021 and what consumers will enjoy in the new insurance industry. Excerpts:
As a leader in the insurance industry, kindly review Nigeria’s insurance industry in 2020
The insurance industry’s performance for 2020 has not been published by the Nigerian Insurers Association (NIA). However, based on the NIA 2019 report, the insurance industry posted N490 billion compared to N413 billion in 2018 representing a growth of 18.6 percent. The industry is expected to record further growth in 2020 largely because of some uncertainties, including the COVID-19 pandemic and the #EndSARS protests. This was reflected in the high magnitude of claims reported by insurance companies during the period. Inaddition, the recapitalisation exercise though currently stalled inspired confidence in consumers’ minds.
What were the key issues in the economy that shaped the insurance business in the past year?
Ongoing infrastructural projects such as the construction of roads and revamping of the rail system have led to increased revenue generation due to the issuance of contractors’ all-risk policies.
However, the low-interest rates adversely impacted return on investment income and asset-liability matching for annuity products in the industry.
Can you give an overview of how the industry responded to losses during the #EndSARS protests and what lessons can be learned?
During the #EndSARS protests, the losses experienced were mainly covered under Fire & Special Perils, Burglary and Life insurance. The payment of claims by insurance companies is ongoing, which is a positive score for the industry. The regulator also assisted by encouraging stakeholders to report uncooperative insurance companies.
The protests highlighted the need to have non-life insurance and life insurance plans. The events also underscored the importance of seeking the advice of insurance brokers in obtaining detailed information about insurance products. There is a saying that “With insurance, it is better to have it and not need it than to need it and not have it”.
The critical role technology plays in operations was also highlighted as many industry stakeholders were forced to enhance technology and improve the digitalisation of their offerings to avoid losing business.
List some positives for the insurance business in 2020 that could turn to growth catalysts going into the future.
Three fundamental changes happened in 2020, which will serve as growth catalysts for the industry: The regulator had increased the minimum rate applicable on compulsory group life business in 2018, and by 2019 into 2020, life insurance operators started to see the positive impact. This is expected to continue going into 2021.
Second, is the joint guidelines on the annuity product signed by PenCom and NAICOM should also enhance product understanding and uptake.
And thirdly, is that the Nigeria Insurance Industry Database (NIID) for motor and marine cargo products will also help significantly reduce fake insurance certificates in circulation and create more confidence in the industry.
Now that you have an underwriting arm, what does that mean for the Stanbic IBTC brand?
On the one hand, we will deliver on our group vision to be the leading end-to-end financial solutions provider in Nigeria through innovative and customer-focused people. Our customers can now consolidate their financial liabilities even better by purchasing life insurance through Stanbic IBTC Insurance Limited.
In addition, access to insurance will be even more seamless as customers will soon be able to directly purchase life insurance products from the Super App – the Stanbic IBTC Mobile App.
What are we going to see differently in Nigeria’s insurance business from your Group?
We will be providing an end-to-end solution for buying life insurance products and claim payment on all our products. We are developing simple products that meet the needs of consumers. In conjunction with other stakeholders, we will continue to push for the relevance of the insurance industry in the financial sector and engage in advocacy to encourage the youths to embrace the insurance business.
What are your expectations from the Nigerian Government/ Insurance Industry Regulator as an operator?
From the government, we will be grateful if the consolidated insurance bill is passed into law this year.The government can also encourage the populace to obtain insurance cover for natural disasters and other incidences such as a fire.
Government buildings should be insured against the risk of fire and special perils which will further encourage uptake of compulsory insurances like group life, public buildings, buildings during construction with professional indemnity, etc.
The regulator is doing a lot, and we hope that they will continue to collaborate with service providers to fast-track the use of technology in delivering more seamless solutions to clients.
What does the emergence of Stanbic IBTC Insurance Limited offer the insurance industry?
Easy access to simple, and in some cases, bespokelife insurance solutions. Customers will have the ability to purchase life insurance from their mobile devices, and when needed, make claims submissions on their life policies easily.
Why does Stanbic IBTC need a Life Insurance arm when it has an Insurance Brokerage business?
Very simple; the brokerage entity is an intermediary between the insurance company and clients. We are the ‘manufacturers’ that pay claims to the customers.
Insurance penetration in the Nigerian market is still relatively low, do you think Stanbic IBTC Insurance stands a chance to help grow the sub-sector?
There are many opportunities to grow the market as less than 10 percent of the population are currently insured.
The pension industry has AUM in excess of 11trillion naira. These contributors will retire, and when they do, they can buy annuities if they prefer not to continue with programme withdrawal.
Also, as more SMEs are registered, the industry will develop.There will be an increasing need for business owners to prioritise insurance to protect their properties and lives.
In the area of digitisation, what should new customers of Stanbic IBTC Insurance Limited expect? Faster ways of doing business from the comfort of their homes or business environment; Knowledge gathering via our digital platforms; and Access to product information at the touch of a button.
Stanbic IBTC Insurance Limited is a subsidiary of Stanbic IBTC Holdings PLC and a member of the over 150-year old Standard Bank group.