‘More investment needed in insurance sector’
Bode Akinboye, GMD,
Standard Alliance InsuranceMr. Bode Akinboye, Group Managing Director, Standard Alliance Insurance enumerates the challenges of the insurance sector in the country and suggests possible solutions in this interview with Ayeleso Oladele. Excerpts:
KINDLY explain the workings of Standard Alliance
Insurance?
The industry has positively changed for good; the last couple of years have been momentous, full of so many positive things that have happened in the industry.
We have bigger and more financially vibrant financial institution not just insurance institution, we have better people being in charge of managing these institutions, and we are using better technology to drive it, we have better products that are being followed by reintegrated customer service. More of positive things are happening in the industry.
For us as a player, we have positioned the company as a top player and as a financial services shop, we are not just out to sell insurance, we are out to sell life style, not just general insurance, our services include, pension fund, life insurance annuity, personal financial plans, property, banking, stock brokerage and asset managers. They have to do with way of life. Every customer is fit in into the shop in terms of what you need to survive in life. That forms the six companies we have in the group.
What is the target of the company in the next four years?
The sky is not the limit. The opportunities available in the insurance industry today are enormous for anyone to think that the sky is the limit. We have not even tapped in to five to ten per cent of the available opportunities yet. Even when you take the compulsory insurance, it has not been fully subscribed into by people. Government is not doing enough. Where we are taking the company to is to continue to be a dominant player in the business that we know how to do best which is insurance.
And top player in the other areas of our business that has to do with financial service, so we are positioning Standard Alliance as a group, as caring company to our customers in every areas of their lives, as a profitable company to our investors, and a company to work to our staff. We want to be the leader in financial services solution beyond Nigeria. We want to been seeing with a very big balance sheet, quality assets, quality staff, quality investment portfolio, high class technology to drive our services. The totality of what we stand for is quality service and excellence to the customers.
Your company has the vision of going beyond the shore of this country…
(cuts in) In the medium term, not immediately, a lot of companies are rushing out, but we believe very strongly that the market is here, Nigeria constitute two third of the whole west Africa, so we need to have victory at home first before we go out and start the battle. Of course, there are advantages, we want to succeed here heavily, then to take other part of west Africa will be a small thing to do, our focus is on Nigeria, we have not covered up to 15 percent of Nigeria , where are we rushing to? But we have focus to cover Africa, we will start by being very strong, being formidable player in Nigeria , before we take our success out
What are the countries you have in mind?
West Africa. Nigeria is the biggest in the whole West Africa, we want to master that, and then we can move to the rest of West Africa . From there we venture into the East Africa, and South Africa then the whole of Africa.
What does your capital base looks like?
Our capital base is in excess of N6 billion, prior to this last offer we just concluded. We just concluded raising N18 billion which is the first, biggest ever offer that any insurance company in Nigeria to have raised. We have set that record in terms of the quantum and by the time approval is gotten from SEC which is the final approving authority. Our shareholders fund will be in excess of N25 billion and that will make us to be the most capitalised insurance company in Nigeria.
Challenges of managing a big capital base and method to employ in facing the challenges
We are already there. First of all we have a strategy in place and in implementing those strategies we have provided platform. We have SA insurance that is into general insurance, oil and gas, SA Life that is into life insurance, annuity and investment products, SA capital and Asset management that is into stock brokerage and asset management product, SA Pension, that is into pension fund management, SA property that is into property, buying and selling in the real estate investment and then we have SA mortgage, which is represented by Lagoon Savings which is just acquired December last year. The money we have just raised will be distributed along those lines. We already have where to deploy the capital raised from the market. These different subsidiaries are operating in unique market that is profitable and rewarding. With the right people with the right strategy and the right capital, we can always deliver superior returns to our shareholders.
How can you describe your Claim portfolio?
There is no company in this market today that is responsible, that will toil with paying claims because when you don’t pay claims, you are destroying the whole essence of doing business. I think what our regulator; the commission was talking about is that how do we look at the timing, how do we ensure that claims are processed expeditiously and customers insured got their claims cheque right on time. How do we ensure that we simplify all the documentation requirements?
How do we ensure that we educate customers so that they know what is expected of them, so that they know what to do, the processes and the stages they need to pass through when there is claim. But what we see most time is that customers don’t know what they should do when there is claim.
How they we ensure institution invest in that process to educate customers as to their right and obligations under the insurance contract they are entering into, because insurance is a contract where each of the parties need to fulfil their obligations, but because we are serving the customers, we need to explain more to the customers to understand how they should handle their own part.
The bottom line is that most customers are not aware of their responsibilities, so we have the responsibility as an industry to simplify it and to make it available in terms of information dissemination to the customers. That is the responsibility on the part of us, but there is a responsibility on the part of the customers to read what they are buying, or engage consultants such as brokers, insurance advisors to help them in understanding what they are buying as regards what must be done and what must be avoided.
Most time when you have brokers, you don’t run into some of these problems because it is the responsibility of the broker to work with the insurance companies to make sure that all the grey areas are sorted out for the benefit of their customers.
Can you say the Nigerian insurance industry is doing well?
Given the operating environment, the industry is doing very well, but we need to develop more customer friendly product, we need to invest more on our people, so they have more demonstrable competence in terms of ability to interact with customers and give customers quality service, knowledge of the product, knowledge of what they are selling so that they can pass that across to the customers.
Ability to show empathy to the client, to be able to understand customers problem from his own perspective break it down to how insurance can solve it, we need to develop on those process, produce, people, technology to drive our business, we need to invest more on infrastructures, these are the areas we need to look into, when I said we are doing well, in paying claims, this industry has paid massive claims in the last couples of years.
