African insurance dependent on Nigeria - CIIN boss

Oladele Ayeleso, Lagos

THE President and the Chairman of Council, Chartered Insurance Institute of Nigerian (CIIN), Mr. Adeyemo Adejumo, has disclosed that the human capital needed for the Africa sub region in insurance sector rests on Nigeria, hence, the need for the institute to embark on rigorous training for insurance practitioners.

Mr. Adejumo, who admitted that the numbers of insurance professionals in Nigeria is grossly inadequate, especially in this post consolidation era, compared with the demand within and beyond the shores of the nation, disclosed that there are 2,158 associates, 109 fellows and 100 certificate holders in the country.

While speaking at the council’s office, he said, ‘let me reiterate my assertion that the challenges of leadership in today’s Nigerian insurance industry are anchored on the imperatives for managing changing situations and the appreciation of the enormous responsibility of leading by example.

“The only way to guarantee accurate management and professional decision-making is for our industry to embrace human capital development by making it priority in their corporate scale of preference. In consideration of the foregoing, the institute has commenced a campaign aimed at fostering a new spirit in corporate responsibility to the training and retraining of the industry workforce”.

Speaking further, Mr. Adejumo stressed that the governing council has accordingly ratified policy aimed at compelling insurance organisations to include training as part of their employment package. This new policy which he described as an off shoot of the Mandatory Continuing Professional Development (MCPD) programme, according to him, would provide an annual score card from which companies would assess their rating in the training of their employees during the assessment period.

The president, who is also the Managing Director of Continental Reinsurance, said that the year 2008 in the Nigerian insurance industry, being the year after the industry consolidation, would be eventful and would be expected to provide ample opportunities for

operatives to crystallize the imports of the recapitalisation and consolidation exercise. He said that the projection of the institute captured the areas of need, especially the repositioning of insurance managers for the greater tasks ahead.

He said, “2008 is going to be a year of rediscovery for most operators in the sector. No doubt, most operators will be compelled to discard their old garbs which engendered limitations and made them see limitations rather than expectation. Insurance stocks have become the toast of investors, an indication that capitalisation will become systematic rather than being enforced by statute”.

Insurance as a career: Removing the phobia

Abiodun (surname withheld) was admitted to study Insurance as a course at the Polytechnic Ibadan some years back, but for the first two semesters of his study in the school, he was psychologically disturbed, not because he was unable to meet up with the standard in the course, but because the course was of no interest to him nor his parents.

According to Abiodun, he had made several attempts to change the course to any other course that may be pleasing to his parents who had refused to see anything good in insurance. In fact, they had refused to give him any further support in terms of allowances necessary to keep him going.

Meanwhile, Abiodun is about graduating from the school. Interestingly, when he went for his one year industrial attachment (I.T) in one of the leading insurance companies in Nigeria , his achievement within that period raised his hope to high heavens. With the experience he garnered within that one year, Abiodun became a counsellor, psyching up his fellow youngsters who might have been discouraged from studying insurance.

Abiodun’s case is not peculiar. It is a common phenomenon among students and his parents may not be blamed for taking such decision. Probably; they might have been discouraged by the attitude of some fringe players who once dominated the industry. It is also pertinent to note that the industry had suffered a great set back in performance.

According to experts, lots of factors were responsible for the poor performance of the industry. Undercapitalisation was one of the major factors, and this was coupled with inadequate human capital development, poor returns on capital, high receivables, existence of too many fringe players, unethical practices and lack of innovative and exciting products.

Equally, some of the personalities at the helm of affairs of many insurance companies as managing directors today were once discouraged, but, they are not only relevant icon in Nigeria today, but also international figures that have made it, career wise. Hitherto in Nigeria, insurance practitioners were often referred to as people with dubious characters. People alleged that the then practitioners would canvass for customers but default when it comes to claims. That characteristics were erroneously transferred on all insurers in the country.

However, it is of note that if everyone has the same mind with Abiodun’s parent, the coming generation may not have Nigerians sitting at the helms of affairs in Nigerian insurance companies. Now that the economy is growing, insurance sub sector is not doing bad as well, and of a fact, the recent recapitalisation in the industry has redeemed its image.Insurance companies in the country can now cope with their counterparts in other parts of the globe, in terms of strong capital base, technical efficiency and others.

As at today, there are 49 insurance companies in Nigeria, with several branches within and outside the shores of the country. Insurance now offers a wide range of career path opportunities that portends for the practitioners a fulfilling lifetime career. Aside the underwriters, there are several number of brokers, loss adjusters cargo superintendents, agents and risk surveyors.

Underwriters work for insurance companies and receive remunerations. They are needed to identify and calculate the risk of loss from policyholders, establish appropriate premium rates and write policies that cover these risks. They analyse information in insurance proposal forms to determine if a risk is acceptable and will result in a loss.

Brokers specialise in acting as the middle man between the insured and the insurance company carrying the risks. They work for the insured and have primary responsibility to ensure that they obtain the best rate, terms and conditions for their client. They derive their income basically from commission on premium paid by their clients.

Agents, like the brokers, canvass for business on behalf of an insurance company. An agent may be working for an insurance company or may be working for himself. In whichever case, he is a paid commission agent. Although he performs similar roles like the broker, he is not expected to have the same level of expertise and competence as the broker. Where he works for himself, he is regarded as the agent of the insured and vice versa where he works for the insurance company. He can only operate as an individual.

Loss adjustment is another branch in insurance. Loss Adjusters specialise in the adjustment of large losses for the insurance companies. The responsibilities of a loss adjuster are to investigate, assess and make recommendation on claims assigned to him on behalf of all parties to the insurance contract. Appointment is usually by the insurance companies but the trade ethics require that he operates and discharges his duty without favour to any party. He is regarded as an independent and unbiased party in the claim process.

The Cargo Superintendent is also an insurance expert. The main area of specialisation is the supervision, discharge, examinations and unstuffing of cargo at the insured’s warehouse. He is expected to note any damage to the cargo as it is being handled at the different stages and parties of the transits and hold any negligent party liable for such damages. Often, superintendents operates as a corporate body, but it is not unusual to operate as an individual.

The importance of insurance to any nation’s economy cannot be undermined. In advanced nations of the world, insurance is as important as banking. Of a fact, there are some countries where insurance companies own banks. If youngsters are scrambling to study Accounting, Banking and Finance, Medicine and all other professional courses, Insurance should also receive the same attention.

Interestingly, from all indications, it seems as if the government is also paying more attention to the industry. More business opportunities had been opened up for the industry, most especially, the flood gate of business opened by the Federal Government through its target on oil and gas of 45 per cent of the Nigerian content by 2006 and 70 per cent by 2010.

Before now, the insurance industry had faced human capital challenge. With low quality personnel, poor remuneration and near lack of creativity and innovation, occasioned by conservative practices, except in few instances, the industry could not compete in attracting quality hands, like their counterparts in the financial services sector. But with the capitalisation and consolidation, things have changed drastically and fresh injections of quality hands are expected in an industry that holds lots of attraction.