By Adetokunbo Abiola
With the COVID-19 pandemic, the insurance sector faced numerous challenges in 2021, especially with the destruction caused to socio-economic activities.
Even though the event took place in 2020, the effects of the #ENDSARS episode continued to pose challenges to the insurance sector in 2021, due to the fall-outs of the incident.
Along with this, the spate of kidnappings, banditry and communual conflicts provided another challenge to the Nigerian reinsurance sector, and they caused a number of disruptions,
These challenges, needless to say, provided the impetus for other situations among reinsurance companies, as they strove to maintain their market share and create profits.
For example, a surge occurred in health, travel and business interruption claims, a situation worsened by reduced business activities of companies.
In addition, interest rates went even lower, with increasing credit risk exposure from businesses facing default, raising the possibility of regulators asking for extraordinary solvency tests to ensure insurers could withstand their challenges.
Put together, these daunting situations forced companies in the reinsurance and insurance sector to carry out numerous activities for survival, especially when they realized they had to rely a lot on online technology and evolve health products in their offering.
The unexpected events drove business with customers online, even though the sector showed uncertainty about the capacity it had to cope with the new normal. Due to the development, about 50 per cent of insurance transactions are done through digital platforms.
In fact, the Managing Director/Chief Executive Officer, Anchor Insurance Company Limited, Augustine Ebose, predicts more money will be created through online platforms within the next three years.
Ebose said Nigerian youths preferred to do insurance businesses through online media platforms than in person.
According to him, the pandemic drew humans to Information Communication Technology (ICT) processes, and forced operators to reinvent their processes and customer experience as well as developed means to meet public expectations.
Transformations through online channels permeate the responses of top-notchers in the sector when asked about their strategies for survival.
“We are proud to note that the systems and processes we have in place allowed us to continue working in a relatively seamless fashion: remote, connected and engaged,” Chief Ajibola Ogunshola, Chairman,Continental Reinsurance, told newsmen.
GMI towed along the new normal of digital insurance operations, by opening new channels for customers to engage in business operations through online means.
Its Managing Director/Chief Executive Officer, Mrs. Cecilia Osipitan, said: “In an effort to stay true to the commitment of delivering quality service to valued customers, alternative service channels have been made available for access to all insurance products and services available under the stable of GNI Plc.”
Similarly, Unitrust Insurance Company Limited also provided alternative communication lines to interact with its policyholders and stakeholders, to continue to serve customers and the business community.
Likewise, Guinea Insurance Plc asked its clients to take advantage of online platforms for their insurance services, while Old Mutual Nigeria arrived with an online channel to maintain seamless and efficient access to insurance benefits and claims for its customers.
Old Mutuals revamped its e-commerce web portals to deepen access to insurance solutions to its customers.
Its Executive Head, Marketing, Alero Ladipo, said the launch of the brand’s revamped online portal conformed with its ceaseless use of digital innovations to create opportunities towards insurance products for customers.
Also, Managing Director/Chief Executive Officer, AIICO, Babatunde Fajemirokun, said the underwriter utilized its technology platforms and digital channels for a smooth service engagement, a move that increased the traffic of clients.
Linkage Assurance Plc brought back its online channels into operations to satisfy customers and enable continuity in its activities after the COVID-19 lockdown.
Others initiated health products in reaction to COVID-19. Leadway Assurance, Wapic Insurance,Sunu Assurance, FBN General Insurance took initiative in this direction.
In this case, the country saw the coming on board and formal unveiling of Leadway Health, a branch of Leadway Assurance Company Limited; and Consolidated Hallmark HMO, a part of Consolidated Hallmark Insurance plc.
Hallmark HMO sustained its ability to leverage the use of technology to deliver top-notch health maintenance services to its growing customers worldwide.
Mutual Benefits developed a package by including offerings to benefit clients on its health care package.
Close to 90 percent of Nigerians lack health insurance, leaving 9 out of every 10 Nigerians completely exposed to the huge and harsh financial impact of contracting any critical illness. Old Mutual Life Assurance Company hoped to fill the gap created by this challenge.
“For the Old Mutual Critical Illness Plan, the minimum entry age for this type of policy is 18 years, while the maximum entry age is 67 years,” said the company’s spokesman.
NSIA Insurance provided a robust health plan to local companies who wanted to provide their workers with an efficient healthcare plan in Nigeria.
“Companies that purchase the product rest assured that their staff will easily access the best medical services, wherever they are in the world when the need arises,” said Ebelechukwu Nwachukwu, its managing director.
Apart from health packages and online use, the reinsurance and insurance sector responded positively to clients during and after the lockdown, to maintain trust in the industry.
For instance, AIICO Insurance Plc paid its policyholders N350million claims within the first 48 hours of COVID-19 lock-down in the country.
According to the Chairman Nigeria Insurers Association (NIA), Ganiyu Musa, insurance companies settled 718 claims on vandalization; 93 cases on looting; 113 on theft; and 136 on loss of cash, three on death claims, while claims were paid on other property losses, 99 claims settled on malicious damage; eight claims on business interruption; 455 claims on burglary attack and 912 claims on fire-and-burnt site.
AIICO’s Executive Director, Retail Business, Sola Ajayi, said the company didn’t shirk its commitment to customers for payment of claims, policy loans, partial and full maturity benefits, among others since the lock-down took effect
Online usage, health packages, attention to customers’ claims saved the companies in the reinsurance and insurance sector during the perilous times following the lock-down period.
Consequently, Continental Reinsurance posted a 29% increase in gross premium income for the first quarter of 2020, as the group reported an overall increase in gross premium income to N11,560 million for the period, and with contributions from across its six locations remaining strong and steadily growing.
Dr Femi Oyetunji, Group Managing Director, put the profit before tax at N2,479 million, a 446% increase over the same period last year.
GCR Ratings (“GCR”) affirmed Tangerine General Insurance Limited’s national scale financial strength (formerly claims paying ability) rating of A-(NG), with a Stable Outlook
GCR Ratings (“GCR”) revised AIICO Insurance Plc’s (“AIICO” or “the insurer”) national scale financial strength (formerly claims paying ability) rating to AA-(NG) from A(NG) on criteria change.
The payment and provision of N11 billion life insurance cover to the front line health workers during the COVID-19 outbreak, as well as the successful outcome of the AIO conference, earned the industry very high recognition by President Muhammadu Buhari
Going forward, experts say, the insurance sector needs to do more about seizing opportuned moments like building collapses and fire incidents to positively engage the populace, as well as be deliberate about getting more Nigerians on-board, especially those that have never had any insurance policy.
“Available technology and digital solutions can ease the burden of delays and denials associated with the insurance sector and more insurers have to be ready to respond to the questions of the insuring public in a collaborative manner.
“In 2022, insurance operators should be ready to engage with tech solutions providers that can enable them to get access to customers faster,” Gam-Ikon, an insurance expert said.