Ebere Nwoji writes on the need for organisers of the annual Insurance Professionals’ Forum to refocus the conference so that it can contribute to the growth of the industry
When the Chartered Insurance Institute of Nigeria (CIIN), the educational arm of the country’s insurance industry, commenced the Annual Insurance Professional Forum (AIPF) in 1991, one of its top objectives was to equip insurance professionals with requisite knowledge, ideas and experience that would enable them to abide by their professional ethics in their daily business conduct.
In line with this objective, both the regulator and the leaders in the Nigerian insurance sub-sector of the country’s financial system had often set for themselves the target of repositioning the industry in terms of market conduct, product offering and customer satisfaction in ways that would meet the global market standard.
This effort has witnessed the delivery of many addresses, paper presentations and technical sessions by professionals from within and outside insurance circle all to ensure that participants in this annual gathering went home recharged and fired with the zeal to play according to rules of the game in their bid to win mass patronage and grow the industry’s premium.
However, with the benefits of hindsight, it appears that the annual gathering is nothing but a ritual that is long in preaching and hearing, but short in practice.
A critical look at the widespread unprofessional conducts among insurance practitioners and its telling negative impact on the growth of the insurance market, throws up the question of whether the noble ideas of nurturing strongly ethical minded insurance professionals that inspired the hosting of the AIPF for 29 years have been achieved?
According to an industry player who spoke to THISDAY on the condition of anonymity, most of the participants at the annual event are there for reasons not connected to building their ethical and professional practice. The source said that most of them attend the forum to gather papers they would use to write their professionals examination without any intention of putting what they have learnt into practice.
She said: “The professionals read for the purpose of qualifying, what is discussed at public sessions like the professional forum is quite different from individual company’s claims processing and payment policy.
“Again, every insurance firm appears to be in an uncontrolled race to grab any available business at all cost and at a lowered premium rate.”
Observers have pointed out that most of the events that occurred this year points to the importance of insurance and the need for more Nigerians to embrace its services as a cushion for unforeseen circumstances coming the way of their lives and businesses. However, they noted the low level of trust on insurers due to their unprofessional is a big hindrance.
Among those that confirmed this viewpoint was the Managing Director of the Universal Insurance, Mr. Ben Ujoatuonu, who acknowledged that recent happenings in the country are enough to encourage Nigerians to embrace insurance services.
According to Ujoatuonu, the destruction of businesses by hoodlums during the recent civil unrest that occurred in some parts of the country should serve as an eye opener to Nigerians on the need to buy insurance for protection because no one knows when risks of this sort will come.
He said there was likelihood that this type of commotion and the associated risks on lives and properties would come again anytime because peoples’ expectation from government is becoming higher and government cannot totally meet these expectations.
He added that the anticipated mass patronage of insurance services obviously would grow the market.
Currently, in spite of Nigeria’s standing as the highest population and the biggest economy in Africa its insurance sector still has one of the lowest contributions to the GDP in the continent when compared with a country like South Africa whose size of economy is close to Nigeria’s.
The Nigerian insurance sub-sector is made up of 58 insurance underwriting firms, two indigenous reinsurance firms, more than 500 insurance brokers and more than 20,000 insurance agents both registered and unregistered and at least 40 loss adjusting firms. Currently, about four new underwriting firms are rearing to go into business having been approved for licensing by the NAICOM.
Despite the seemingly impressive numbers of players in the sub-sector, the industry is yet to attain the desired level of growth when compared to its counterpart markets within the continent. Premium generation is still very low while density and penetration are still at their lowest ebb.
For instance, the industry currently contributes less than one percent to the country’s GDP compared to the insurance sub-sector of South African that is contributing more than 10 per cent to the country’s GDP.
This is also a far cry from the insurance regulator’s target of attaining the contribution of at least three per cent to Nigeria’s GDP, creating 250,000 new jobs, achieving gross premium of N1.10 trillion and a per capita of N7500 in 2012.
The attainment of these targets would have made the insurance industry more relevant to the economy and wean it from being perceived as the poor cousin of banking sub-sector.
Moreover, the performance of insurance listed firms on the Nigerian Stock Exchange leaves much to be desired. The exchange’s daily listing and stock market reports showed that the insurance industry is not very active. In addition, dividend payments and capital appreciation are also too poor to be sources of motivation to investors to stake their funds on them.
Going by the annual reports of insurance quoted companies as at December 2019, the overall industry premium is about N500 billion, which is still below the 50 percent of the regulator’s targeted N1.01 trillion since 2009.
Obviously many reasons accounted for this and they ranged from poor disposable income of the Nigerians to lack of awareness, nonpayment of claims as well as lack of trust from the insuring public.
Unfortunately, insurers are fast to increase efforts towards addressing the awareness problem and most often turn a blind eye on nonpayment of claims as at when due.
Till date, many insurers would repudiate a claim by coming up with one excuse or the other even when it is obvious that the clam is genuine.
They would rather mobilise all their key staff, including their legal personnel, claims managers and marketing managers against one policy holder who has come to demand for his claims.
Some companies can even afford to schedule meetings up to five times at their head office for a single client who has come to demand for his claims.
The situation is worst if the client went into direct purchase of the policy or bought the policy through an agent instead of a broker.
Some insurers have advanced in their claims repudiating tactics to the extent that they would from the outset tell the loss adjuster accessing the risk and the occurring claims to declare the claim non genuine even when it is genuine.
The situation is worsened by the fact that insurance underwriter now pays the loss adjuster rather than the policy holder.
In some instances, the underwriter may give the policy holder the liberty to bring his own adjuster. But even this gesture would not help bring the policy holder any succour as the loss adjuster depends on the patronage from the insurance firm to survive and continue the business because the drummer must beat his drum to the tune of the paymaster.
The question begging for an answer as sharp practices, unprofessional and unethical conducts pervade the length and breadth of the insurance landscape in Nigeria is: where is the place of professionalism in Nigerian insurance companies and the relevance of all the lessons taught at the APIF that is organised annually by the CIIN in the day to day practice of insurance organisations and their workforce in the country?
The landscape might be level and the play fair when big corporate entities like West Africa Milk Company (WAMCO), the Nigeria Breweries Plc are at the receiving end. Then the insurance firm could even go the extra miles of bringing foreign adjusters to adjudge the case fairly and equitably. But the rule of the game changes where an individual that bought life policy or holds investment related policy or insured his personal property is involved.
The former Commissioner for Insurance, Mr. Fola Daniel, had condemned the attitude of insurance firms that indulged in this kind of behavior. Daniel said that no advertisement would be stronger for an insurer than prompt payment of claims.
Similarly, the current Commissioner for Insurance, Mr. Sunday Thomas, who has severally encouraged insurers to ensure prompt payment of genuine claims, had said: “I believe that the recapitalisation will be the leveler because we are going to factor in all those outstanding claims before we adjudge any company as having met the requirement. There is what we call age analysis and this ensures that if you have claims that have been more than some number of months in your book, you have to clear them.”
Also former President of the CIIN, Mrs. Funmilayo Babington Ashaye, had said that the time has cme for the regulator to adopt ‘name and shame’ strategy to weed the non-claims paying companies from the system.
Ashaye had noted that as an industry that indemnifies investors and risk takers, insurance underwriters must remain stable, strong, resilient and financially solvent to be able to meet emerging obligations, addiong that achieving these goals in a sustainable manner is part of the objectives of that year’s forum.
She said: “By delivering value to our clients, we would be able to make profit for our shareholders over the short to long term. Also, we need to minimise our cost of operations and engage in financial engineering as strategies for growing our businesses on a sustainable basis.”
Findings by THISDAY showed that insurers repudiate claims because of their quest to win an account at all cost, an attitude that constrained them from assessing and charging the risk professionally. The implication is that they already have it in their mind from inception that they were not going to homour the claims.
Recently, the Chairman of Mutual Benefit Assurance, Dr. Akin Ogunbiyi, at the insurance conference organised by the National Association of Insurance and Pension Correspondent, disclosed that some insurers gave as high as 99 percent discount on premium they charge, which raised the question on how such insurer would pay claims on such business when risk occurs.
These are but few of the dirty games played by insurers in the discharge of their professional duties, yet all of them on yearly basis rush down to Ogun State for the professional forum.
Through critical observation, it has been observed that one of the shortfalls of the professional forum is that over the years, speakers and paper presenters focus their theme on what to do to meet underwriting standard in the international market but hardly do they talk about nonpayment of claims and the harm it portend to people’s confidence and patronage of the industry.
The 2020 edition of the AIPF had as its theme: “Insurance Industry: Defining the future.”
In his address, CIIN’s President, Mr. Muftau Oyegunle, said: “We had previously acknowledged the changes that the advent of technology was gradually institutionalising but that slow and measured process has been heavily jolted by the outbreak of the COVID-19 pandemic disease.”
He pointed out in his speech that consumers have experienced highly personalised, self-directed shopping experience followed by instant fulfillment and they are looking for this same service from all service providers including insurers.
He, however, failed to specifically mention that there is no quality service delivery to customers in insurance transaction without quick payment of claims.
In the same manner, the immediate past President of CIIN, Mr. Eddie Efekoha, anchored the theme of the 2019 edition.
Then, he was also was here and that artificial intelligence was playing a major role in its evolution.
During her tenure as the President of the CIIN, Mrs. Isioma Chukwuma, at the 2015 edition, had emphasised on ethical conduct and had also failed to mention claims repudiation as one of the professional misconducts that has remained a killer virus to the industry.
Therefore, it appears that over the years, insurance professionals and their leaders have been regarding claims as the least important topic to be discussed at the annual forum.