Nigerian insurance industry is embarking on a major recapitalisation exercise with a lot of funds expected to flow into the sector, from both within and outside the country. Funmi Omo, MD/CEO of African Alliance Insurance Plc in this interview with Modestus Anaesoronye shares her thought on future of the company; recapitalisation plans and other issues that concern her as a chief executive. Excerpt:
Funmi Omo is managing one of the leading life insurance companies in Nigeria, but has preferred to remain quiet. What is the best way to describe you Ma?
I won’t describe myself as quiet though. Unassuming, yes: intuitive, and with an ability to draw energy from within.
African Alliance Insurance recently released its unaudited full year result for 2019, showing major developments in terms of volume and underwriting performance, what have you started to do differently since you came in as CEO of this company?
I became the CEO in 2017 and the first thing we knew we needed to do was to reposition the brand. A key strategic decision was to focus more on traditional insurance products and rebrand the business. In doing this, we leveraged heavily on digital technology to improve efficiency, manage cost and deliver faster, better results. All these have reaped good fruits for us as the top line of our financials show. In 2016, the year before I became the CEO, we wrote N14.26 billion of which over 85 percent of that was annuity, meaning roughly N2 billion was from other lines of business combined. We suspended sales of annuity in 2017 and our 2019 unaudited figures showed we wrote N7.5 billion. That is almost 400 percent leap in gross written premium from other lines of business that annuity nearly stifled. Like you said, that is a major leap in terms of volume. This shows we are a viable, virile institution with the right structures and capability to do much more and serve our customers very well. Unfortunately, the impact of suspending the sales of annuity vis-à-vis the peculiarities of payouts to annuitants still shows in our bottom line. However, all hands are on deck to turn this around. It’s a bend I am very confident we will turn this year.
Your shareholders we believe are beginning to look at African Alliance differently and more positively now, how long will their waiting for dividend last?
Not very long. Not long at all. With the strategies on ground, we are definitely getting there.
The nation’s insurance industry is embarking on a major project of recapitalization, which many have said holds the big future for the business, what is your take on this?
Honestly, I feel the exercise is long overdue. It’s one that will help strengthen the industry, build stronger institutions and assure stakeholders. It will also help boost our capital bases whose values have taken a hit by current economic realities and by so doing, insurance could take its rightful place as a major driver of the economy. Really, insurance is supposed to be the major sustenance for everyone –individuals, corporates and even the nation.
In specific terms, take us through your recapitalization plans?
I wish I could literally list the step-by-step plans towards recapitalization but as you know, this is a very sensitive topic and I would not be able to say much. But know this: we are on course. Our shareholders are happy with the plans because we already shared with them and we have started executing same. To be a little more specific, we are looking inwardly, assessing and realizing the full value of some of our assets that we could leverage on as well as a couple of external interests in the business. Remember. we are a legacy brand, we have enough assets and goodwill to pull this off; all we are doing is to ensure we do our due diligence and don’t come off short in any way.
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Are you considering a merger or acquisition, and do you think these are good strategies at this point in the business?
You are asking the same question differently. I believe in mutually beneficial strategic partnerships, so we will wait and see.
The National Insurance Commission (NAICOM) is expecting so much from annuity business, but this seems different from the way players are looking at it, can you share your thought on this?
This is a sensitive question but I’ll quickly say this: the regulators definitely have their perspective and the players have theirs. So, it is neither here nor there.
Give an insight into what African Alliance is planning for 2020, and what is your business expectation looking at the operating environment?
A lot has been said about the operating environment which I would not want to rehash here. As a legacy brand with 60 years of experience in this market, we know enough to say that this is the time to reflect and redefine strategies for survival. Through thick, through thin, we know how and when to refocus and indeed re-strategize. Maya Angelou said every storm runs out of rain. That exactly is our belief at African Alliance. So in 2020, while we weather this storm knowing it will, like many before it, run out of rain, we have re-evaluated our product lines, re-jigged some and created new ones that respond to the market needs. We are making progress despite the operating environment as you can see. We have become more agile, very nimble and extremely creative and innovative to reach our targets. We are not slowing down, we will do more and more until more becomes the norm.
Any other issue critical in your mind?
The CEO’s mind is always full. First, African Alliance turns 60 this year. As a homegrown CEO, I am quite ecstatic about this milestone as it signals the start of a brighter future for the business especially as it falls in the year of recapitalization.
Second, I just lost my dad, Rt. Revd. Samuel Ajani, the first bishop of Egba West, Anglican Diocese. He was my mentor and, of course, major driving force growing up. It’s a tough one for me but then, what has happened has happened. His legacies are overwhelming and his death reminds me of my own mortality and the need to leave a legacy that will surpass his.
