Friday, 9 November 2012



being a paper delivered at the

2012 Education Seminar with the theme

“Making Insurance Count”

Organized by

Chartered Insurance Institute of Nigeria

And Presented


Wale Onaolapo
Managing Director/Chief Executive Officer 
Sovereign Trust Insurance Plc

November 8, 2012


Mr. Chairman, dear professional colleagues, distinguished ladies and gentlemen. I will like to start by thanking the Chartered Insurance Institute of Nigeria for inviting me to this conference. The Customer in the insurance industry is a very important and relevant issue today and it is indeed timely to be addressing a gathering of insurance technocrats on a perspective that borders on customer satisfaction in our service offering. I must say that our noble Institute has once again proved to be at the forefront in the quest for improving our professional skills through continued manpower training and development.

I accepted to address this theme – Making the Customer a Winner not just because I can identify with the ongoing radical improvement in the quality of service delivery in the insurance industry, but also because our industry needs to position itself properly to play its rightful part as a sector contributing significantly to GDP and overall real economic growth. It is my belief that at the end of this discussion, we all would have updated our knowledge base and reenergize ourselves on the importance of prioritizing the needs of our customers.

The topic of this paper: “Making the Customer a Winner” presupposes that our customer is a "king." But, first of all, let us ask ourselves, who is a customer? A customer also known as a client, buyer, or purchaser is the recipient of a good, service, product, or idea, obtained from a seller, vendor, or supplier for a monetary or other valuable consideration. Customers are generally categorized into two types:

·         An intermediate customer or trade customer (more informally: "the trade") who is a dealer that purchases goods for re-sale.  
·         An ultimate customer who does not in turn re-sell the things bought but either passes them to the consumer or actually is the consumer.
A customer may or may not also be a consumer, but the two notions are distinct, even though the terms are commonly used interchangeably. A customer purchases goods; a consumer uses them. An ultimate customer may be a consumer as well, but just as equally may have purchased items for someone else to consume. An intermediate customer is not a consumer at all. The situation is somewhat complicated in that ultimate customers of so-called industrial goods and services (who are entities such as government bodies, manufacturers, and educational and medical institutions) either themselves use up the goods and services that they buy, or incorporate them into other finished products, and so are technically consumers, too. However, they are rarely called that, but are rather called industrial customers or business-to-business customers. Similarly, customers who buy services rather than goods are rarely called consumers.

From the foregoing, we all will agree that a Customer is a person who is using any or all of the services offered by any person, group or an organisation.

Since the advent of the customer concept, different categories of customers have been identified, but the most common of these which this paper will limit its discussion to are:

         External customers who are not directly connected to the organization. For example as with insurance companies, we have brokers, agents, loss adjusters and ultimately the policyholders.
         Internal customers who are directly connected to an organization, and usually (but not necessarily) internal to the organization. Internal customers could be taken as stakeholders, employees, or shareholders, but the definition for the purpose of this paper also encompasses creditors and external regulators.

In insurance, examples of a customer could be likened to;
  1. A man who seeks to insure his car against theft or property damage.
  2. An agent/broker who places insurance business on behalf of his clients.
  3. A loss adjuster who tries to ascertain the actual value of loss at the time claim is lodged.
For there to be a sale of any product or service, the customer is the sole determinant. Once you have developed your marketing strategy, there is the need to execute the traditional 4Ps of marketing popularly referred to as the Marketing Mix.  This will enable you evaluate and re-evaluate your business activities continually. Consideration could also be given to entertaining the concept of extended marketing mix which is the 7Ps.  While the concept of 4Ps has been long used for the product industry, the 7Ps has emerged as a successful proposition for the services industry.
These 7Ps are: product, price, place, promotion, people, process and physical (evidence). No manufacturer or producer of service will venture into any business transaction without the knowledge of an existing market (customers). When there is, the level and quantity of what is produced, how it is packaged and place of sale is based on the location and size of the market available while pricing is determined by the market forces of demand and supply.  The people element, method and process of providing your service and the management of your brand give the total experience of what your business represents when customers come into contact with your product or service.
The positioning strategy adopted is also of utmost importance.  With positioning, one has to develop the habit of thinking continually about how the product/service and your organisation is positioned in the hearts and minds of your customers. How do people think and talk about your product and service when you're not present? How do people think and talk about your organization? What positioning do you have in your market, in terms of the specific words people use when they describe you and your offerings to others?
What is noteworthy here is the important role of the customer and the pride of place it holds in the market place. Little wonder, Philip Kotler asserts on the importance of a customer when he postulated that “who should ultimately design the product? He responded – The Customer of course”. He asserts further that good customers are an asset which, when well managed and served will return a handsome lifetime income stream for the company because we are living in a world that is no longer facing a shortage of goods, but a shortage of customers.

Customers are the foundation of any service organisation. They are the scorekeepers in the service game. Management practice should therefore be based on a deep knowledge of customer characteristics in the area of expectations, needs and competencies as they vary from kind of services to products. Benjamin Schneider and David Bowen in their book “Winning the Service Game” said of service as less tangible than products; much of service quality is in the delivery. The how of service delivery is as important as what is to be delivered.

The Oxford Advanced Learner’s Dictionary defines the word “win” as “a victory in a game, contest, etc”. Consequently, we can regard a winner as a victor in sports or a notably successful person, be it in business or other fields of endeavour. Alhaji Aliko Dangote of Dangote Group of Companies or Chief Mike Adenuga of Globalcom or our foremost nationalists like Chief Obafemi Awolowo, Sir Ahmadu Bello and Chief (Dr.) Nnamdi Azikiwe who at various times held sway in the politics of our dear country.  A winner can further be seen in the following context;
  • A winner of a race in a sporting competition like Usain Bolt of Jamaica, regarded as the fastest human on earth.
  • a politician whose victory is contested like Governor Mimiko of Ondo State who just won a re-election.
  • A company who participates in a bidding exercise and won.
  • The winner of a lottery
  • A person who has achieved distinction and honour in some field like Professor Wole Soyinka, who won the Nobel Laureate prize in Literature in 1986 and
  • A person(s) of great ability and ambition like you and me.
For me, I regard the one who creates an opportunity to be brilliant, one who gets the opportunity to be lucky and the one who capitalizes on the opportunity to be a winner. An individual who has achieved the above is regarded as having won or being a winner in every sense because of this accomplishment.

Today’s winning companies are characterized by the following attributes; they have:
·         Creative and innovative products.
·         Customized products.
·         More efficient and effective distribution techniques.
·         Greater sales force productivity.
·         Excellent customer service
·         Sophisticated and profitable underwriting.
·         Quality human capital
·         Reengineered and streamlined operational processes.
·         Leveraged information technology.
Creative and Innovative Products
We have seen in the last couple of years a number of products being introduced into the market. Today, a sizeable proportion of premium and other incomes are derived from these products that did not exist at the turn of the century. Prominent and most successful among the product innovations are:
  • Medical and Healthcare schemes
  • Medical savings account
  • Education account
  • Accident insurance for the retail end of the market
Customized Products
The present day customers of insurance products are smarter about their insurance options. They expect and demand customized policies and services and are getting them from the leading underwriting companies:
  • Flexible Protection Plans:  a private client division for High Net worth individuals
  • Offshore Investment Policies: corporate bodies investing in unit-linked schemes offshore like in Guernsey and Jersey located off the coast of Normandy in France. These funds are managed by local insurers
  • Property Asset Management Plans: outsourced by corporate bodies and HNI but supplied by insurance companies
  • Personal Retirement policies
  • Indexed equity funds and indexed bond funds: both offer stability against volatile investment performance of retirement fund managers.
More Efficient and Effective Distribution Techniques
Most underwriting firms now use more direct sales methods and rely more on their own full-time representatives than was in time past. Although brokers are still being used, they are tending to become more specialized in market segment and product group thus enhancing their ability to add real value to the insurance subsector. Other changes in distribution techniques include alliances with banks through bancassurance model, increase in direct marketing and the adoption of e-business. The use of these new and innovative techniques has meant new skills in selling and technology support.

Greater Sales Force Productivity
Today’s salesmen in insurance are better educated, more empowered and better motivated than before. To enhance their productivity and effectiveness, they are supported with the necessary tools and information to both sell and serve customers. The result is that average gross premium income per sales staff has increased tremendously in the last couple of years as affirmed by reports published by most underwriting firms.

Excellent Customer Service
Most successful underwriting firms have now gone beyond quality of service to providing truly excellent customer service in all aspects of customer service delivery from enquiries to rate quotation through to prompt claim settlement in the occurrence of risk crystallization while also deploying their risk management techniques to reduce the occurrence of loss.

Sophisticated, Profitable Underwriting
The winning insurance companies have been those who successfully demonstrated competitive risk selection and pricing. The very keen competition for available business has forced companies to develop even more sophisticated ways to evaluate, categorise and price risks. These companies have successfully reversed the previous acceptance of underwriting as inherently unprofitable. Profits from their underwriting business, coupled with smarter investing, have vastly improved their overall profit performance and return on invested capital.

Quality Human Capital
The quality of the human capital recorded in the insurance industry in recent times has vastly improved. The industry has now been able to attract and retain good quality people. The industry now competes effectively with banking, accountancy and management consulting for top talents graduating from our higher institutions of learning. The more successful companies now outspend banks in staff training and management development, spending a significant percentage of their net premium and investment income on this newly discovered strategic resource. The resulting increases in productivity, creativity and innovation have played a large part in their relative superior performance,

Re-engineered and Streamlined Operational Processes
The restructuring that took place in the Nigerian insurance industry in 2007 also saw to the fundamental redesign of insurance business and this has led to much improved operations and enhanced customer service. Reengineering has helped the companies that embraced it boldly to reduce costs, improve performance and enhance their flexibility. The quantum leap in the value they are able to deliver to their customers enabled the leading underwriting firms confront the competitive challenges unleashed by the restructuring of the industry. Large scale reengineering has also meant massive investments in technology and reduction in headcount.

Leveraged Information Technology
With the advent of “Global Village”, the concept of universality as envisaged by our forbears that the entire universe is one, has become a virtual reality now. Thanks to scientific technological advancements pronouncing the death of distance and speeding up communication. Peoples’ contacts have become instantaneous across nations and businesses have profited the most. Our industry too has finally woken up from slumber and come to terms with technology. Technology today is the competitive engine; its application has gone beyond the hereto-fore traditional uses of systems beyond capturing, storing and retrieving data. Information systems are now being used to design, package and deliver innovative insurance products and services online. Some of the leading edge technologies in widespread use in the industry include electronic data interchange such as the NIID project of the NIA, and similar projects which banks have been using for decades, image processing and expert systems.

For organisations to succeed, having in place a winning formula is not only imperative, but highly needed if their corporate objectives are to be achieved. For any business to be successful and to be classified as a winning company, a winning formula predicated on a good strategic framework must be adopted.
In his work, “Good Strategy Bad Strategy”, Richard P. Rumelt asserted that a good strategy honestly acknowledges the challenges being faced and provides an approach to overcoming them, that the greater the challenge, the more a good strategy focuses and coordinates efforts to achieve a powerful problem solving effect.
The winning formula which I would recommend should be inspirational and embedded with powerful business development framework designed to support and equip leaders and managers with the knowledge and skills required to successfully grow their organisations. The formula encompasses;
This is the “how” of achieving what the Board and Management of any company must have agreed as the mission of their business. Today’s managers must take action that will help to attain one or more of its organization's goals and objectives. This could be achieved through the detailed strategic planning process of integrating organizational activities and utilizing and allocating the scarce resources within the organizational environment so as to meet the objectives. While planning the appropriate strategy, it is essential to consider that decisions are not taken in vacuum and that any act taken by an underwriting firm is likely to be met by a reaction from those affected like; competitors, customers, employees or regulatory authorities.

Businesses must create structure that best suits their operations or meets the industry standard. Organizational structures outline how a company completes various business functions with the function of business owners and managers clearly delineated ensuring that no one individual is responsible for too many functions. Not only can this create a backlog of work, but it can also allow fraudulent activity to occur. Managers and employees often work better in an environment with a clear structure and level of expectations.
According to organizational consultant Dean Meyer, a well designed organizational system must be stable and capable of influencing everyone's performance. However, prior to planning an organizational system that will be effective and efficient, knowledge of the various types of systems that exist is required. The choice of system that an organisation allows to predominate among the variants of country club, team and task management as postulated by Blake and Mouton's "The Management Grid"  would determine to a large extent a winning company.

What is important is that any system adopted must clearly define the roles, responsibilities and relationships between all strata in the organisation.

The business process is a series of activities occurring within a company that lead to a specific end. Most often, the business process must focus on meeting the needs of the customer and delivering a good or service that will fulfill that need. In many cases, the business process is actually a collection of interrelated processes that function in a logical sequence to achieve the ultimate goal of customer satisfaction from the acquisition of raw materials to production and even to the conclusion of the delivery process and to the obtaining of feedback from the customer regarding their level of satisfaction with the product and the efficiency of the physical delivery.
This is getting the right human resource personnel to drive the corporate objectives and implement the strategic planning process. Jim Collins in his book “Good to Great”, postulates that a good leader must first get the right people on board and the wrong people off with the right people in the right seat. The old adage that “People are your most important asset” turns out to be wrong because people are not just your most important asset; the right people in the right place are.

Market and Marketing
The business must seek to provide answers to the following questions as regards its product or service;
v  Is there still room for expansion in the product lines offered by the company overall?
v  Do we see possible extensions of the company’s product line into new uses and markets?
v  Is there a high rate of technological change?
v  Does the company serve numerous and diverse customers?
v  Does the company’s offering provide good value for its price?
Setting up of Priorities by the Leader
Because senior executives have long been seen as the strategy makers in the organisation, their role in the process has been the most extensively written about and examined. The characteristics of effective strategic leaders can be best expressed through the metaphor of the tightrope walker, who needs focus in clarifying the organization’s strategic direction and vision for the future, balance in helping people resolve dilemmas associated with the strategic focus and remain open to change and coordination in ensuring that the diverse functions and strategic initiatives of the organisation work in harmony in the service of shared goal to get from one end of the thin wire to the other.

The leader in its growth strategy must ensure that the company’s volume is increasing and should exceed the average growth rate of the entire industry with the company’s products serving as substitutes to products in other industries where possible.

Cash Generation
The leader must ensure that the business generate enough cash inflows because cash gives you the ability to stay in business. It is likened to the company’s oxygen supply. Lack of cash, decreasing cash or consumption of cash means trouble, even if other factors like profit margin remain good. Everyone in a company must understand that his daily activity uses cash or generates cash. All people in every organisation have a role to play in keeping the cash flowing. 

Return on Assets
This number tells you what the company can do with what it has. It's a useful number for comparing competing companies in the same industry. The number will vary widely across different industries. To paraphrase Ram Charan "one truth about business is that the return on assets has to be greater than the cost of using your own and other people's money, the capital.  That is when management is seen to be creating shareholder wealth."  Every company must hold itself up to this standard.

Good Corporate Governance & Sound Risk Management
It is imperative for an organisation to have a good corporate governance structure and enterprise risk management system in place to direct and control the organisation. This structure will specify the distribution of rights and responsibilities among different participants in the corporation, such as board, management, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company’s objectives are set, and the means of attaining those objectives and monitoring performance while also aligning the organization’s risk appetite to its business strategy, enhancing risk response decisions, reduce operational surprises and losses, identify and manage interdepartmental risks, allow for more informed risk decisions and improve capital management.

Over the years, the general perception of service delivery in the insurance industry as demonstrated by the actors; agents, brokers and insurance companies have not been anything to be proud of. The industry was known to be quick to collect premiums and yet dragged its feet if not avoid the payment of claim when the need arises. Most customers had sad tales to tell from the shabby treatment gotten from the inception of the contract to the adoption of the risk management principles and ultimately the payment of claim. More worrisome was the attitude of underwriting firms to look for a minutest excuse to repudiate genuine claims.  Our agents and brokers too did not fare better holding on to premiums unduly for too long without remitting same to the insurance companies, not forgetting the ill-equipped human resource paraded by the industry that barely knows the intricacies of what insurance stands for.

But such experience have now become history as the industry has now come to terms with its purpose and ready to play its pivotal role in the economic development of the country. So many steps have been taken by the regulatory authorities since the 60s to weed out the bad elements in the industry with the government coming up at various times with new laws and regulations to guide the conduct of insurance business in Nigeria.

In spite of all these efforts, and the need to address the theme of this discussion, one might need to ask, are we getting it right? Are we practicing the correct principles?

To my mind, I will say yes even though we are not fully there yet. However, the journey of a thousand years they say start with the first step. That we, as an industry must rise to this challenge that is hydra headed by committing and applying ourselves to the various principles and practice of this profession as it is done elsewhere in the world. We sincerely need to provide excellent service by ensuring that the risks are adequately priced through application of economic rates that will enable us pay compensation to our policyholders, meet regulators demand and do have provision for the owners of the business. This will ultimately improve our brand; grow our market especially in areas that we are yet to penetrate.

I strongly believe that there is no short cut to success other than playing by the rules of the game with total submission to the principle and practice of our noble profession.

The customers who are our very reason for being in business can truly be a winner if we practitioners and operators in the insurance industry can put our house in order by applying the Winning Formula espoused above and also observing the following:

  1. Offering of quality service delivery at all times.
  2. Possession of product knowledge and understanding of customer needs by client-facing personnel is a great way to get customers happy to buy our products.
  3. Be fast and efficient in our product offerings especially handling claims to the satisfaction of our customer. This will simply guarantee more business patronage. Therefore, we should at all times keep the customers’ needs in mind.
  4. Avoid mistakes, no matter how minor or trivial as getting a customer’s request wrong, or misspelling a customer's name on the policy document, receipt or debit note. This can give the impression that you don't respect the person enough as a customer to get those little basics right. This, most times characterizes the difference between having a loyal and satisfied customer.
  5. If you fail to deliver or over-promise and under deliver, your customer will give you lousy feedback and any future possible buyer will think twice before buying from you. Always remember that your customers' satisfaction level will determine how well you do in your business.
  6. Imbibe discount offering in your pricing strategy especially to your loyal customers on their next purchase of any policy as they share their testimonial that can be displayed on your website or newsletters. Having this will always get your customers to come back to enjoy another great purchase.
  7. Prompt settlement of claims and offering ex-gratia payments on technically deficient claims will please many customers. It is one of the excellent ways to put smiles on the faces of customers who have just sustained a loss that is not covered by their insurance policies.
  8. Because your satisfied customers are usually much quieter than the unsatisfied ones, sometimes you may have to give them an incentive to give you some praise. The happy and satisfied customers will refer many people to your great service or product. This is a good way to get more customers.
  9. Whichever avenue you decide to take, just remember that if you make customer service a priority, then you will not only sleep well at night but you will also have satisfied customers that pass your link on to their friends and family members.
I will like to conclude, my distinguished audience, by inviting you all to dream big dreams because only by so doing will we be able to move our industry forward. In time past, given that our industry’s credibility and overall performance had suffered tremendously and despite the improvement recorded in the recent times, we still have a lot of catching up to do in service delivery. I humbly recommend visioning and positive attitude as a tool to help us restart our march to winning ways.

I will end by leaving you with this quote that was credited to Zainab Alkali in her book – STILLBORN. She said “it is good to dream, everybody does and as long as we live we shall continue to dream. But it is also important to remember that like babies, dreams are conceived. Not all dreams conceived are born alive; some are aborted, while others are stillborn”. Our aspirations are our possibilities and if we can’t dream it, then chances are that we can’t do it. I hope you will find inspiration and challenge in my vision of making our customer a winner at all times. But you have got to dream your own dreams.

I thank you all for your rapt attention. Once again, I commend the Chartered Insurance Institute of Nigeria (CIIN) for this laudable programme and I urge you to keep on in this trend of providing our members the opportunity to increase their knowledge base. I do hope the knowledge we have shared today will be inculcated in our minds and will be applied in our service delivery offering.

Thank you and God bless.


  1. Benjamin Schneider and David E. Bowen; “Winning the Service Game” Harvard Business School Press, 1995, Page 20.

  1. Blake & Mouton; “The Managerial Grid”, Gulf Publishing Co., Houston, 1994.

  1. Charan, Ram; “What the CEO wants you to Know”, Kindle Version, published by Crown Business, New York, 2011.

  1. Collins, Jim “Good to Great” published by Random House (2001) page 12 - 13.

  1. David Schmittelin; “Customers as Strategic Assets” Management Thisday, June 15, 1996 Page 15 – 18.

  1. Kotler, P. and Connar A.J; “Marketing Professional Services”, Journal of Marketing, January 1977, Page 71 – 76.

  1. Nirmalya Kumar and Jacques Horovitz; “Getting Close to the Customer”, Management Thisday, July 28, 1996, Page 13 -15.

  1. Oxford Advanced Learner’s Dictionary, 8th edition (app edition)

  1. Rumelt, Richard; “Good Strategy Bad Strategy”, Kindle Version, published by Crown Business, New York, 2011.

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