How long have you worked in the insurance Industry in Nigeria?
My career path has spanned different businesses and job functions in the telecoms and hospitality sectors of the economy. I joined the insurance industry in 2007. As the group head, private sector of Standard Alliance Life Assurance Limited, I head a unit that is made up of critical business sectors of the economy which compromises; Oil and gas, Telecommunications and Aviation. I equally have oversight functions in the financial sector or what we call multi client unit of emerging market.
Would you say that in the course of your experience in the industry that there have been remarkable changes in the remunerations structure in the industry? If yes, give us a descriptive insight into these changes
I will say there have been remarkable changes in wage structure in the insurance industry. This change is a reflection in the economic activities in the country. Obviously wage is a byproduct of the economic system. If you look at Nigeria in historical perspective, you will agree with me that 20 to 30 years ago, the earning then cannot be compared in term of volume to what is obtainable now without prejudice to inflation. This cuts across all segments of the economy.
For insurance particularly, I will say yes there have been a remarkable change in term of remuneration. The working conditions generally have improved tremendously.
Compared to other sub-sector in the financial industry are pay packages in insurance sizeable?
If you look at the financial industry as it were, you cannot compare insurance and maybe banks because the businesses the two carry out are different, the products they sell are different. As you are aware, the remuneration prevalent in each sector is a product of what they earn by way of their business tractions. So what insurance companies do and what the banks do are not the same, but I can say authoritatively that the difference in term of remuneration is not that much. It is not too far ahead in terms of the size of the remuneration.
In addition, the salary structure is determined by each organisation. My understanding is that there is what we call industry standard but that industry standard is not by regulation, it is not to say that across the banks there is a set amount. Other things like the position you are being hire for, the value of work you are going to bring into such organisation among other things determines what you will be paid.
This is a clear departure from how it used to be in the past where there is an already set salary grade and level. But in todays’ corporate environment, it is a matter of your negotiation power, so you may discover in Nigeria today that two people working in the same organisation, having the same qualification, the same years of experience, doing the same job, but are earning different salaries, this boils down to how each of them is able to negotiate their pay package.
Can you compare the pay structure between insurance and other sectors in the economy and even between Insurance in Nigeria and other countries?
Comparing the wage structure like I earlier said is a function of the economic activities of the company’s income. It is from what each company earns, that they set what to pay to their staff.
As you are aware, some sectors are high earning sectors such as the oil and gas, you can’t compare someone in the bank now with someone working in an oil company. So some sectors are high income generating sector.
Looking at the size, insurance as a sub sector in the financial industry, measures well with the bank, we are not far off. Part of the reasons why the wage structure changed for better is because the industry is now driven by competition, each insurance firm needs to bench mark their pay and see what other companies are doing so they can likewise.
The trend some years back which saw banks buying into insurance raise the stake because what the banks practically did was to bring in more or less the same wage structure they were using in the bank into the Insurance industry and with that, they were able to lure lots of good hands to their system.
Having seen this trend, it was therefore necessary that those insurance companies whose activities were not backed up by the banks had no option than to up their game. So these are part of the factors that altered the wage system in the industry.
Also other factors we need to look at is the growth in economic activities as you are aware, Nigeria is a fast growing economy which implies that people income generally is improving. When income increases, the value and quality of life increase, the marginal propensity to save becomes high and this where insurance draws its strength. As long as there is a great economic activity going on, insurance services will continue to be on the increase.
I will also add that the recapitalisation and reconsolidation exercise which took place in insurance in 2007 that standardised the practice in insurance really help because people’s confidence in insurance became very high and patronage increased. All these translate to productivity for the company and in effect, when a company is doing well, there is no way it won’t reflect on the staff. To a large extent the best way to measure the success or otherwise of a company is through their employees.
If you look at the wage system in Nigeria compared to other countries in Africa. I will say Nigeria is a leading force in Africa when it comes to insurance. A simple justification is how many insurance companies in Nigeria are owned by foreign companies? Infact this goes to show that Africa has become the centre piece of our insurance policy.
I can say comparatively that Nigeria is doing very well compared to other African countries except maybe countries like South Africa when it comes to insurance penetration.
As you are aware, insurance thrive on number and Nigeria have the population. The larger the population, the larger the possibility of the insurance sector to grow and I think Nigeria is really taking advantage of her huge population and this is positively rubbing off on the insurance industry and some other sectors of the economy.
When comparing Nigeria insurance operation with what obtains in the western world, all you need to do is look at all the indices of growth. I will like to add that when you look at all these, Nigeria is not doing too badly but we still have a long way to go compared to the western world. The reason is the in the western world, a lot of them have reached a stage of high mass consumption, what that stage means is that it is a stage where you are no longer looking at the economic activities generating itself, rather high premium is placed on welfare. This is where you will see the unemployed being given monthly stipend, this is where you will see the old people receiving medical attention free of charge, but when you situate this to Nigeria, you will see that the country is very far from attaining that level of growth.
Again the level of awareness about insurance is very low in the country, for example most of the expensive automobiles Nigerians drive around in the country have only third party insurance. This is because a lot of them do not have a clear understanding of what insurance can do for them.
However NAICOM as a regulator is driving this change of orientation. As more and more people get aware of what insurance can do for them, the better the industry. From the angle of the life insurance, I will say that a lot needs to be done.
Has the current remunerations structure in the industry been a plus or minus to the attraction and sustenance of required talents?
I will say that Remuneration in the insurance industry has been a plus for the recruitment and sustenance of talents in Nigeria today because all over the country, there is competition for labour.
A young graduate with a good result have options on which sector to work in because at this primary level in his career, he or she is driven by money, so they would be concern with a sector that would offer more wages, but there is a level one will get to in career, that you are no longer driven by financial reward before making a job switch or career decision.
The adjustment in the insurance wages is a plus because right now you can talk about professionals in the industry. If you compare the quality of workforce in the insurance industry today and what it was say 30 years ago, you will see that there is a very great difference. Today we have apart from those who are chartered professional; we have well bred learned people in the insurance workforce. I don’t think there is any insurance company you get to that their human resource department that is not manned by a qualified personnel manager. This goes to show that because you have these professionals coming in, it rubs off positively on the industry because they are bringing in good knowledge into the job and these things translate into higher productivity for the industry.
I can confidently say that the increase of activities you are seeing in the industry today is a direct result of the quality of human capital that is why you can draw a sharp line between insurance of today and insurance of yester years. In the past, insurance was just the last hope for any man who is looking for a job, but today things have change because today we see first class graduates in this industry, you see professionals from diverse fields in the industry, this to me is a plus.
Another important thing to note is that apart from the wage structure in the industry, corporate culture is another factor that has served as incentive for the industry.
Hardly have you seen any company doing business as was done in the past. Every transaction has acquired a corporate taste. From the office environment to other capital transaction, they have all acquired what is called international standard.
In addition, apart from the salary, the work environment, the job content have cause changes in the industry for the better and make the insurance industry attractive. In the past, insurance is just two parts; operations and marketing. The operation are few underwriter who are technical people that handles technical underwriting of the insurance, then you have the commercial which is sales and marketing, this is an all comers affairs, but today, part of the transformation we have in the industry is that insurance is no longer limited to these two areas, we have information technology coming in. Infact in every insurance company, ICT is the chief driver of the company. If you don’t have a robust ICT, that company won’t have a seamless operation. Clients must be able to reach their insurance company at every time through their mobile devices. So the ICT department occupies a very prominent in insurance operation.
When you come to the business development aspect of insurance, it is not what it used to be in the past, in the past it was more like the use of commissioned agents, but today, it is a different thing all together, now the wage structure have taken care of that because companies now have standard corporate polished marketers.
These new arrangements are possibility that have made insurance industry very attractive.
Do young people show keen interest in joining the insurance industry as they do desire pursuing banking careers? If not why?
There are interests from young people to join the insurance industry as long as the jobs are there. In the past getting job in the insurance industry is very easy, but now, the competition is higher. The reason for this is because today the industry is highly regulated, all the activity of insurance companies are scrutinised to ensure that they operate in tandem with international best practice.
On the strength of this and the salary structure in the insurance industry which has been standardised, insurance industry is an attractive place to work.
It is very true that every graduate would jump at an offer to work in oil and gas or even telecoms companies. Yes insurance industry might not be their first option, but when looking at career growth enhancement, insurance industry provide the ladder for people to climb high in their careers as long as such individuals are willing to distinguish him or herself and add value to the company they work for.
KELECHI EWUZIE
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