AN ADDRESS PRESENTED BY THE MANAGING DIRECTOR OF NICON INSURANCE LIMITED, MR BAYODE SAMUEL AT THE MEMBERS EVENING OF THE NIGERIAN COUNCIL OF REGISTERED INSURANCE BROKERS IN LAGOS ON AUGUST 25TH , 2015.

The Commissioner for Insurance

The President of Nigerian Council of Registered Insurance Brokers (NCRIB)

The Governing Council

My Professional Colleagues,

Gentlemen of the Press,

Distinguished Ladies and Gentlemen, 

I feel very pleased and privileged to present this address at the August edition of the NCRIB members’ evening.

The theme of my presentation is “The developments in the Nigeria Insurance industry from 2006 till date: The Case of NICON Insurance Limited”

I have carefully chosen this to reflect the present realities of our times as practitioners in the insurance market and our relationship with you all.

The Insurance industry has indeed come a long way, as it had been in existence decades before Nigeria became independent.

However, within 55 years as a sovereign nation, the insurance industry has recorded a mixed grill of ups and downs. The contribution of the insurance industry to the country’s Gross Domestic Product (GDP) has remained abysmally poor. The industry ought to be playing a key role in the national economic development of our great country. Regrettably, its contribution is less than 2% of the GDP.

The slump in crude oil price has continued to have severe impact on the Nigerian economy as well as other oil producing countries in the world since the beginning of this year.

The price of a barrel of crude oil has more than halved from $115 in June 2014, to $40 a barrel now. This has led to drastic reduction in Nigeria’s revenue and has compelled the Federal Government to introduce some economic stabilization measures in order to ensure a more sustainable revenue profile in 2015. 

However, the factors inhibiting the growth of the industry are: low level of insurance penetration, high public apathy for insurance products and rate cutting among practitioners etc. 

The insurance industry has made some progress within the last 60 years, particularly in the areas of human capital development, company ownership and creating confidence for other sectors of the economy to thrive.

The enforcement of compulsory insurances by the National Insurance Commission (NAICOM) and its public awareness campaign has surely helped in deepening the market. Additionally, the introduction of the Market Development Restructuring Initiative (MDRI), establishment of the technical management board for Energy and Allied Insurance Pool (EAIPN), the industry’s contribution to the GDP will hopefully be in higher figures.

The intervention by NAICOM’s Customer Complaints Bureau in the controversial disputes on the delay in settling claims by we underwriters is worthy of note. In other words, the alternative dispute resolution platform earlier established by NAICOM and NIA should be sustained, strengthened and improved upon. After all, the business of insurance is ultimately to settle genuine claims.

Annually, insurance companies make huge provisions for outstanding premiums in their books and delays or non-payment of these premiums, invariably affect their ability to make profit, pay dividends to shareholders and attract investments to sustain growth.

However, the new policy of ‘no premium no cover’ has impacted positively on the cash flow of the underwriters and has drastically reduced, if not totally eliminated outstanding premiums that were hitherto written off as bad debts.

The Local Content Act in the Oil and Gas sector came into being in April, 2010. It provides a huge opportunity for local operators to enjoy premium rights on services provided before it is taken abroad. The energy and allied insurance pool that was promoted by NIA will ensure risks diversification and spread in the industry.

The Nigerian Insurance Industry Database (NIID) should be strengthened by both NAICOM and NIA to rid the nation of fake insurers and insurances. The NIID which is the only central record of all insured vehicles in Nigeria could effectively be used by authorized Law Enforcement Agencies to enforce motor insurance law.

Please permit me to refresh our memory on the introduction of micro insurance products, aimed at protecting the low income earners against specific perils in exchange for regular premium payments proportionate to the likelihood and cost of the risk involved is a welcome development.  

Distinguished Ladies and Gentlemen, the code of corporate governance recently introduced by NAICOM in the insurance market aimed at rebuilding and sustaining the waning confidence of stakeholders is another point worthy of note. 

Globally, one of the most significant changes in the financial services sector is the development of the non-integrative Bancassurance model, midwife by NAICOM and the CBN. The opportunities will deepen insurance penetration in the sector, thereby enhancing insurance contribution to the economy. 

NICON INSURANCE LIMITED: THE JOURNEY SO FAR.

It suffices to say that prior to its privatization, NICON Insurance was the flagship of the insurance industry in Nigeria. This position was incontestable until the blueprint to privatize some government establishments in the country came into force. At that time, NICON Insurance had enjoyed an unparalleled market environment devoid of stress and strain.

However, privatization came with a lot of changes that drastically upturned the flow of events. The monopoly on federal government insurances was broken. The insuring public had wide choices to make in the insurance market. The relaxed mood of the company therefore, had to be awoken. It was then the real challenges of competing in the insurance market began.

Currently, we have swung into serious action with concerted efforts aimed at rebranding the company. This has become pertinent due to the fact that every establishment over time, carries out reforms that will reposition the organization in the comity of equals as wells as clients.

We have, since the inception of my tenure, carried out radical structural and human rebranding exercises with the intent of placing the company on a balanced pedestal. 

We have engaged highly cerebral staff to drive our new strategic direction and road map to reposition our company. In acknowledgment of this, we have won various awards. 

NICON Insurance is collaborating with NIA in the process of engaging students of Actuarial Science in higher institution on internship programmes. This will no doubt help in advancing   insurance profession in Nigeria.

There is an on-going rebranding exercise, aimed at giving our offices across Nigeria impeccable look, comparable to any world class office.

We have sent our staff to train at various reputable institutions so as to equip them sufficiently for proficient productivity. On a lighter note too, you will agree with me that we have bounced back to professional associations just like we are fraternizing with you today and it is ardent desire that this fellowship is sustained. 

Our operations have so far not been different from what obtains everywhere in the industries. We have always done our best possible to jump across series of hurdles to have come thus far. It has not been rosy more especially with our erstwhile estranged relationship with you our partner and professional associations, but we are confident that the current management team will fix things right in the shortest time possible. 

In our resolve to reposition the company, we have decided to extend our strategies to our 6 Regional and 40 Branch offices across Nigeria for optimal and superior performance.

From January this year to date, we have paid a total claim of over N138.11 million, made up of N50.98 million in general business and N87.13 million in life and pensions businesses. 

NICON INSURANCE’S RELATIONSHIP WITH BROKERS.

Undoubtedly, the insurance industry in Nigeria is a wholly Brokers’ market. The extent of success of any underwriter therefore is determined by the rapport with the Brokers. In our case, the past few years have been most challenging and harrowing with resultant decline in our fortunes.

However, we have come to seek your hands of fellowship in reversing this trend and promoting the business of insurance in Nigeria to the delight of all.

Distinguished colleagues, ladies and gentlemen, while thanking you for your kind audience, we assure you of our best and sincere intentions at all times and look forward to the renewal of a symbiotic relationship with you.

Thank you and God bless.