Insurers retool to respond to rising market risks

Insurers are building the required capacity in terms of skills, tools, and expertise to enable them achieve sustainable operations amid risks and emerging opportunities.

These were the focus of the 2023 Insurance Industry Professionals Forum organised by the Chartered Insurance Institute of Nigeria, held in Abeokuta, Ogun State with the theme: ‘Sustainability of the insurance industry in the volatile, uncertain, complex and ambiguous (VUCA) environment.”

Sunday Thomas, commissioner for insurance in his opening remarks at the event Thursday, said the theme reflects the current realities of businesses in the country as well as on the global scale, as the environment has become VUCA.

Thomas, who is also the CEO of the National Insurance Commission (NAICOM), said it has become imperative for the industry to constantly identify and respond timely to emergent issues that can affect the sustainability and continued existence of insurance businesses and the industry. “Whether we believe it or not, the prevailing norm of constant and unpredictable change has now altered how we view the world, and in effect how we respond to our ambiguous business milieu”.

“It has also forced changes in how we conduct our day-to-day activities as business leaders, executives or managers.”

“The volatility in the stock market, rapid changes in the technological hemisphere and the uncertainty occasioned by regulatory changes such as data privacy rules, as well as the competitive scene alongside disruptive start-ups and changes in consumer tastes are typical cases in point, Thomas said.

He said the business environment was advancing more into artificial intelligence, environmental, social and governance (ESG) issues and will continue to experience issues relating to the increased cyber security threats, natural disasters, acts of terrorism, economic volatility, etc.

Thomas said to navigate this ‘new normal’ the industry must develop a wide range of new skill sets and orientation which enables adaptability and agility.

“The industry must adopt strategic foresight, continuous learning and development as well as effective communication and transparency.”

“All of these require adjusting operating models and workflow processes in doing business today, Thomas advised

He informed that the adoption of a risk-based approach to supervision by the commission was another stride in the area of long-term plans for business continuity and sustainability in the sector.

Edwin Igbiti, president, of the Chartered Insurance Institute of Nigeria (CIIN), said, in today’s rapidly changing world, the insurance industry was faced with unique challenges stemming from the volatility, uncertainty, complexity, and ambiguity (VUCA) that characterises our environment.

Igbiti said, that as professionals, it is crucial that we come together to address these challenges and explore innovative solutions that will ensure the sustainability of our businesses.