To be able to make policies and strategies for the survival and growth of insurance institutions, directors and members of the board must be knowledgeable about the operations of the business.
Industry stakeholders who participated at the 2021 Insurance Directors Conference with the theme ‘Insurance Industry in a changing world’ organised by the College of Insurance and Financial Management (CIFM) said being up to date with the knowledge will enable directors to support management drive for success.
Sunday Thomas, commissioner for Insurance/CEO, National Insurance Commission (NAICOM) said the rapid changes brought about by the Covid-19 pandemic on many fronts have drastically opened doors of opportunities for many positive thinking minds and created serious setbacks for many who are not able to cope with the speed at which some of these changes appeared.
According to him, an obvious example is a technological advancement in the insurance industry that has been accelerated by the Covid-19 pandemic, compelling many of us to shift from the traditional ways of conducting business to more sophisticated and technology-driven mechanisms.
Thomas told the directors that their respective attitudes towards information technology funding in their various companies will go a long way in determining the longevity and existence of not only the companies but the retention of the brand names or corporate identities.
“I want to urge you also to follow up on the implementation of International Financial Reporting Standards (IFRS) 17 in your companies with an implementation dateline of 1st January 2023.
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“Sufficient capacity-building engagements have been conducted and sub-working groups inaugurated to facilitate the migration”.
You are therefore required to ensure that your entities are in full compliance and ready for the dateline, Thomas said.
On the issue of development of insurance in the country, I will urge the Directors to work closely with their management as a lot is expected from them at the top level.
“The Commission is working assiduously to open up the market particularly the retail end, conducting engagements with various agencies and state governments on the need to boost insurance culture across the country. However, the supply side which is the insurance companies must also be proactive with follow-ups in these places. If the industry is desirous of having a significant impact on the nation’s GDP, it, therefore, must take retail business seriously. This has to start from the policy level and the directions clearly spelt out.”
He also informed the directors that, one issue that has been setting the industry on a reverse gear in its developmental efforts is the issue of claims settlement.
“A few amongst us have been making this work a tedious one by not paying claims promptly. We should know as a fact that insurance business is about payment of genuine claims and anything short of that will continue to hurt insurance business in the country thereby giving the industry poor reputation, perception and image.”
I urge you to look at this issue at your level and deal with it decisively as it has continued to give the industry a bad name, Thomas said.
Muftau Oyegunle, president of the Chartered Insurance Institute of Nigeria (CIIN) while commending NAICOM on its efforts in deepening knowledge of stakeholders said this platform will refocus members of board and directors on their very important role of running ethical, profitable, and sustainable insurance organizations.
He noted that beyond technology and knowledge, however, there is a need to bridge the existing gap between various stakeholders in the industry if we must take this industry to the next level.
“Most of the challenges confronting us today require serious cooperation within the industry and collaboration with other relevant stakeholders to move this industry forward, Oyegunle stated.
Nkemdilim Uwaje Begho, CEO, Future Software Resources Ltd speaking on the theme ‘Insurance Business in Uncertain Times: The Corporate Governance Perspective’ said during times of crisis or uncertainty, directors have an integral role to play in ensuring that the organisations they lead effectively implement governance risk models that can react to changing environments.
On the need for directors to key into technology, she said boards with three or more digitally savvy directors had 17 percent higher profit margins than those with two or fewer, 38 percent higher revenue growth, 34 percent higher return on assets, and 34 percent higher market cap growth.
