INAUGURAL SPEECH BY THE CHAIRMAN OF THE NIGERIAN INSURERS ASSOCIATION (NIA), MR. REMI OLOWUDE, OON, AT THE FEDERAL PALACE HOTEL, VICTORIA ISLAND, LAGOS ON FRIDAY, 30 NOVEMBER, 2012.
PROTOCOLS.
I consider it a great privilege to have begun my tenure as the 20th Chairman of the Nigerian Insurers Association (NIA) since June this year. First, let me welcome all our distinguished guests most warmly, on behalf of the Governing Council and the entire NIA family. I thank you for taking time off your busy schedule to honour us with your presence.
I seize this opportunity to again express my profound gratitude to all members of the NIA for entrusting the leadership of our great Association to me and my colleagues on the Governing Council for the next two years. We thank you for investing your trust in us. We shall not let you down.
The mission of the Nigerian Insurers Association as a trade group is focused on "protecting and advancing the common interests of insurers in Nigeria by creating and sustaining a positive image for the Insurance industry, and contributing to legislation and decisions made by the Government and other public authorities in the best interest of the industry in particular and the national economy in general." All things considered, our Association has fared quite well in the fulfilment of this mandate. We have recorded appreciable progress over four decades, a tribute to the hard work and purposeful determination of past Chairmen and members of the Governing Council as well as the commitment of member-companies.
We acknowledge the support and co-operation of other key industry stakeholders including the industry regulator, the National Insurance Commission (NAICOM); all brokers under the umbrella body, Nigerian Council of Registered Insurance Brokers (NCRIB); all loss adjusters in the Institute of Loss Adjusters of Nigeria (ILAN); Professional Insurance Ladies Association (PILA); agents and all other intermediaries. Importantly, On behalf of all our members, I also recognize the contributions of our clients and patrons, who keep us in business. Our partners in the media have also been a great asset and source of inspiration. They remain part of our success story.
Distinguished ladies and gentlemen, today’s inauguration signals the beginning of a fresh journey in the advancement of our Association to the next level. In our Association, there is a continuum and the new term simply presents another opportunity to consolidate our past gains and further transform the industry’s status in the nation’s socio-economic circles.
In my acceptance speech as Chairman during our Annual General Meeting last June, I promised to use the platform of my investiture to elaborate on the ingredients of my vision for the Association and the insurance industry in general. I am therefore pleased to outline some specific areas of focus which I consider deserving of the front burner in the months ahead:
Winning support and respect from all stakeholders in the Nigerian economy.
In our determination to achieve our mission and objectives as a group, it has become imperative to take deliberate steps towards closer interaction and strategic partnership with all stakeholders, particularly the major arms of government: the Executive, the Legislature and the Judiciary. Towards this end, the Governing Council will consider seeking an audience with The Presidency to table issues such as the key roles of insurance to the socio-economic growth and development of the nation; how the insurance industry and the Government can collaborate in areas of poverty alleviation; the need to give the industry the opportunity to contribute to the formulation of certain government policies; insurance industry representation in appropriate government committees; among others. Closely related to this is the need to restructure and strengthen the NIA secretariat for effective public sector liaison and monitoring of the political andlegal environment as it affects insurance. As recent events in the Nigerian financial sector have shown, no insurance company was too big to fail or too small not to matter. Insurance companies are institutional investors which invest in equities and securities. When these entities fail, insurance companies are faced with the challenges of honouring their obligations to their customers. But unfortunately, there is nothing in place on the part of the government to bail out the insurers in times of trouble. This is food for thought.
Similarly, we intend to initiate interactive sessions with the appropriate committees or organs of the two chambers of the National Assembly to discuss issues such as restrictive laws on insurance practice, multiple taxation, insurance awareness and penetration, development of oil and gas industry, etc. The NIA will equally strengthen relationships with the different organs of the Judiciary by organising annual or bi-annual Insurance seminars for judges and the leadership of the Nigerian Bar Association. The seminars will focus on developments in insurance law in Nigeria, and ensure that the judiciary, legal profession, the regulators, and practitioners in the insurance industry as well as the media have a mutual understanding of insurance law and practice. The more people understand the law, the less the courts are inundated with avoidable suits.
The NIA will pay greater attention to its partnership with the Organized Private Sector. We will increase our participation and representation in the activities and deliberations of the Nigerian Association of Chambers of Commerce, Industry, Manufacturing and Agriculture, the Chambers of Commerce and Industry in Lagos, Kaduna, Abuja and Port Harcourt, and the Nigeria Employers Consultative Association.
The NIA will also support the activities of the Cargo Defence Fund, an offshoot of the Nigerian Shippers Council (NSC). We shall collaborate with the NSC to introduce Protection and Indemnity insurance clubs, to monitor developments in maritime law on carriage of goods by sea and related international conventions. It is my conviction that this kind of collaboration will help to develop marine insurance generally by ensuring full protection of maritime risks, backed by authentic and strong reinsurance cover to lighten the burden of marine insurance claims.
Promoting Ethical Standards and Ensuring the Workability of Market Agreements. The Association will initiate a review and improvement of the Professional Ethics and Code of Good Insurance Practice for the Insurance Industry in Nigeria. It will be the responsibility of all practitioners and institutions to promote and uphold the tenets of the ethics and codes. The Governing Council of NIA will, in addition, draw a charter for all Council members on the conduct of business by their individual companies. The proposed charter and adherence to its principles will ensure that Council members lead by example with specific reference to market discipline.
NIA will organise workshops on some key topics critical to success in any business, especially in the financial services industry and insurance business in particular. The workshops will offer further insight into the real issues involved in IFRS, ERM and Corporate Governance, all of which deal with frank disclosures, integrity in accounting, and reporting. It is high time we fully incorporated these concepts into our business models to place our operations at the same level with international best practices..
We shall propose a quarterly or half-yearly meeting with NAICOM to discuss levels of compliance with insurance laws, regulations and supervisory requirements and also to review developments in the market and jointly tackle any emerging problems. Similar meetings will be instituted between the NIA and the Nigerian Council of Registered Insurance Brokers, Institute of Loss Adjusters of Nigeria, Risk Surveyors Association of Nigeria, Professional Insurance Ladies Association and the Chartered Institute of Insurance of Nigeria. These sessions will ensure cohesion and a more organic unity of purpose in the industry.
Collaborating with other bodies in the market to ensure greater insurance awareness and to deepen insurance penetration in Nigeria. This would require active collaboration with NAICOM and all segments of the industry. The only way the market can appreciate the Market Development and Restructuring Initiative (MDRI) of NAICOM is to join the Commission in the campaign, and to comply fully with the policy directives. Insurers must be committed to the support of NAICOM in the publicity and launch of compulsory insurance in various cities and States of the Federation.
As a responsible stakeholder in the financial services industry, the NIA will remain committed to improving its relationship with all regulatory agencies, including NAICOM, Central Bank of Nigeria , Securities and Exchange Commission and the National Pension Commission and the Bureaux of Public Procurement. The Association will continue to support and facilitate the job of NAICOM in areas of transiting from compliance-based supervision to risk based supervision, and on migration to IFRS. The Association will encourage all its members to proactively strengthen their financial and technical capacities for risk bearing.. The Association will also continue to promote the culture and practice of compliance with regulations, corporate governance, enterprise risk management (ERM) and corporate social responsibility (CSR) as an integral part of the philosophy, strategies, systems and operations of member-companies.
Towards creating insurance awareness across all strata of our society, we will introduce an annual Insurance Week for the entire industry to celebrate the goodness and significance of insurance. The week will feature other events including public lectures, children essay competition, debates, etc. The programme will involve all groups and institutions in the industry.
Improving the quality of Insurance Education and Practice. We shall actively support the objectives and programmes of the CIIN with a project aimed at enriching the examination syllabuses to expand the content and incorporate local institutions, provisions of Nigeria statutes, case laws and business environment into the curriculum. In addition, the Association will sponsor full-time intensive revision programmes to ensure that candidates prepare seriously for the Institute’s examinations. These would enhance the quality and competence of Associates of the Institute. The Association will also support the post-associateship and Mandatory Continuous Professional Development programmes of the Institute to encourage professionals to appreciate and embrace continuous learning and development. In line with developments in more advanced markets, we shall work with CIIN to introduce modern risk management concepts and products that deepen the secondary market for structured risks.
Education. The West African Insurers Institute in Banjul, The Gambia, has produced a highly competent crop of insurance professionals and practitioners in the West African Anglophone sub-region, including statesmen like Ernest Bai Koroma, the President of The Republic of Sierra Leone, and some of his cabinet ministers. The Institute requires the support of our industry to continue to supply the industry with highly skilled practitioners. I enjoin our members to take the opportunity provided by the Institute’s programmes by sponsoring a good number of their staff to the Institute every year.
Insurance Pools for Catastrophes, Flood Insurance and Climate Change
The sad reality of our world today is that, more than ever before, we are all exposed to all kinds of disasters, natural or man-made. The frequency, intensity and spread of these disasters have placed an enormous responsibility on us as insurers to create special pools that will not only cover certain fundamental risks of oil spillage, transportation, tanker explosions, etc., but will also address the phenomenon of climate change and the associated tragedies caused by flood, landslide, earthquake and vagaries of weather. It is in the light of this that I call for immediate introduction of flood insurance and a catastrophe fund. The industry needs to collaborate with the Federal, State and Local Governments to set up a National Flood Insurance Fund Programme. The scheme will provide (insurance) coverage against property loss from flooding, landslide, rainstorm, etc. and protect insurers from illiquidity arising from massive claims.
And talking about flood. A lawyer and a broker were fishing in the Caribbean. The lawyer said: "I’m here because my house burned down, and the insurance company paid for everything." "That’s quite a coincidence," said the broker. "I’m here because my house was destroyed by a flood, and my insurance company also paid everything." The puzzled lawyer asked: "How do you start a flood?"
It is imperative to seek Government involvement in the project because the perils covered are more or less fundamental, and when they occur, the poor are usually the dominant casualties. Unfortunately, this segment of our society can least afford the cost of conventional insurance.
The industry should also brace for micro insurance and full financial inclusion as well as the insurance of commuter transport passenger risks. Our vision seat NIA is to ensure that insurance services are provided to all strata of our society within four years. As a planner, I will like to initiate a Five-Year Development Plan for our industry. This will benefit all stakeholders, particularly the policyholders.
Relationship with the international and regional sectors. The NIA will continue to encourage its members to participate actively in the activities of the West African Insurance Companies Association and the Africa Insurance Organization and Fairs. In particular, the Association will support actions which are directed towards West African financial services market integration and uniformity of insurance practice and other financial services.
Building NIA PLAZA. I will like to draw the attention of our members to the need for a befitting edifice for NIA. It has become imperative that together we mobilise resources to ensure the offices of the NIA have a physical accommodation that suits the association.
Implementation and Resources Implications.
Distinguished ladies and gentlemen, let me state with all sense of responsibility, that I am not unmindful of the resources implications of implementing the above-listed agenda in terms of fund, man hour, executive time, logistics, etc., including the fact that I have just few more months to perform. The strategy is to quickly lay the agenda before the Governing Council for discussion and adoption, and then set up an implementation committee and a monitoring system to drive the entire programme. The task is daunting, no doubt. But we must seize the bull by the horn and take advantage of the untapped potential demand for insurance in Nigeria to remain relevant.
As I mentioned in my acceptance speech, we hope to institute 'Insurance Joint Sessions', to bring together all insurance sector groups and insurance elders forum. The forum will serve as a platform for deliberations on critical industry issues. I am proposing that the sessions be chaired by respected elders and leading lights of the insurance industry, either jointly or on a rotational basis.
Ladies and Gentlemen, there is no doubt that the challenge before us is enormous and I honestly need the cooperation and support of each and every one— my predecessors, the Governing Council, the entire membership of NIA, the Commissioner for Insurance and NAICOM leadership as well as the leadership of NCRIB, CIIN, ILAN, RISAN and PILA as well as our political leaders in the Executive, Legislature and the Judiciary. Never before has the wellbeing of the insurance industry been so dependent on our ability to collaborate and offer world-class services in a very competitive global economy.
To meet this challenge, we must all join hands to foster and promote the culture of excellence that will take the industry to the next level. Earlier in this address, I spoke of reaching out to and partnering with the three main arms of government. I deliberately chose to mention last the fourth estate of the realm, which is the Media. We thank our ladies and gentlemen of the press for their past support, and look forward to even more rewarding partnership in the future.
As we embark on a remarkable and uplifting journey, I count on your encouragement and prayers at all times.
It is with a feeling of solemnity and a sense of responsibility that I accept this honor which you have conferred on me. I deeply appreciate the great obligations of this position to which I have been appointed and I shall regard it a duty and privilege to advance our goals
Thank you for listening and do enjoy the rest of the evening. God bless you all.
REMI OLOWUDE, OON
CHAIRMAN
LAGOS, 30 NOVEMBER, 2012
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