Insurance companies operating in the country have lost sales and revenue as result of the COVID-19 pandemic, which is taking a huge toll on economy and businesses in Nigeria and across the globe.
COVID-19 has lead to shutdown of businesses and lockdown of economic activities by government in an effort to contain the pandemic and minimize contraction of the virus by the larger population.
According to a survey conducted for attendees at EY Nigeria Webinar Conference held last week, 41 percent of the participants voted that sales and revenue was most hit during the COVID -19 period.
The theme of the conference is: ‘COVID-19: Responding to Disruption: Now, Next and Beyond: An Insurance Sector Webinar’.
As contained in the report, another 14 percent voted operations as next most hit aspect of their business during the period.
Marketing got 12 percent, as most of the people said they have deployed digital means of marketing to reach their customers and intermediaries.
On how companies are supporting their distribution partners, including agents and brokers, the EY Nigeria survey report shows that 52 percent voted in favour of digital platforms for intermediaries.
This is as 29 percent voted in favour of remote marketing.
On regulatory interventions post Covid-19, 26 percent of participants who were largely from insurance companies and partners at EY Nigeria, said they will expect policy palliatives from the National Insurance Commission(NAICOM) to enable then go through the cycle and recovery period fast.
Another expectation will be tax incentives and returns submission to the Commission, which about 25 of the participant voted to support as critical in enabling them survive during the post Covid-19 era.
Rotimi Okpaise, partner, Actuarial Services at EY Nigeria who provided background to the discussion noted the global economy is challenged at this time as result of COVID-19, stating that there is public health crisis and risk of mass unemployment.
Okpaise also observed drop in economic performance due to lower demand for oil, reduced import transactions from major trade routes as well as supply chain disruption and financial market downturn.
He said going forward, insurers in Nigeria and other West African countries will have to show resilience to be able to weather the storm and remain relevant.
Responding to Covid-19 demands a cross-functional approach to crisis management, particularly in the short term.
On workforce management and employee health, Okpaise said management must identify contingency working arrangements; put in place measures to improve employee productivity, mental and physical health, as well as communicate to reassure employees.
Another approach is customer and brand protection, which according to EY Nigeria will focus on building customer trust; implement communications and relevant societal value actions; put measures in place to manage claims leakage as well as review competitor and market situation.
Another critical issue will be maintaining solvency, which will require activating real-time solvency monitoring; increased liquidity monitoring; identify and evaluate material default triggers and covenant, as well as ensure proactive stakeholder engagement.
Also of importance in the short term is business continuity, which will require that companies activate business continuity
Plans; monitor new business channels; revisit recovery & resolution plan (RRPs); as well as frequently re-assess third party dependency and status.
Corporate actions post COVID-19 will be engagement with external stakeholders to shape societal response; assess strategic growth opportunities and defense measures; consider tax planning and fiscal reliefs, as well as implement recovery actions to restore capital and or liquidity.
