Mr. Remi Olowude
As Mr. Remi Olowude formally assumes office as Chairman of the Nigerian Insurers’ Association (NIA) with many promises, market discipline and his ability to regain the confidence of his colleagues are the great challenges before him, writes Nnamdi Duru
The Vice-chairman of Industrial and General Insurance Plc, Mr. Remi Olowude, was last June elected Chairman of the insurers and reinsurers body, Nigerian Insurers Association (NIA).
With his coming on board, the trade group would now have to expend energy on how to win the support and respect of all stakeholders in the Nigerian economy, particularly the Executive, Legislative and Judiciary arms of government and the Nigerian Bar Association (NBA).
However, some of the challenges before the association are how to increase insurance penetration, ensure market discipline and collaborate with relevant stakeholders including the regulators and various arms of government to move the industry forward.
Collaboration with Government
Speaking on how his administration intends to government with a view to changing public policy thrust in favour of the insurance industry, Olowude said:
“The governing council will consider seeking audience with the Presidency to table issues such as the key roles of insurance to the socio-economic growth and development of the nation, how the insurance industry and the government can collaborate in areas of poverty alleviation, the need to give the industry an opportunity to contribute to the formulation of certain government policies, insurance industry representation in appropriate government committees, among others,” he said.
“We intend to initiate interactive sessions with the appropriate committees or organs of the two chambers of the National Assembly to discuss issues such as restrictive laws on insurance practice, multiple taxation, insurance awareness and penetration, development of oil and gas industry etc,” he added.
Olowude promised to put in place necessary changes at the NIA secretariat to drive these new visions and ensure that government thinks in direction of setting up machinery to bail out failed insurance organisations.
Interface with Judiciary
In view of the fact that many insurance contracts result to litigations after negotiations, particularly on the quantum of claims, and fail to ensure that the industry get quick resolution of such cases without unnecessary impacting negatively on the image of the industry, the new NIA chairman said he would initiative several interfaces with the Judiciary.
“NIA will equally strengthen relationships with the different organs of the Judiciary by organising annual or biennial insurance seminars for Judges and the leadership of the Nigerian Bar Association (NBA). The seminars will focus on developments in insurance laws in Nigeria and ensure that the judiciary, legal profession, regulators and practitioners in the insurance industry as well as the media have a mutual understanding of insurance law and practice,” he said.
He expressed belief that the more people understand the law, the less the courts would be inundated with avoidable law suits.
The challenge in this direction is very important because getting all the stakeholders, including the media to have a mutual understanding on critical issues including claims administration, which is usually a vexed issue, and is a serious hurdle which Olowude has set for himself.
Relationship with Regulator
NAICOM shifted its focus risk-based supervision since July 1, 2012 when all insurance and reinsurance companies were expected to have established a workable risk management framework in place.
Olowude stated preparedness of the association’s leadership to work with NAICOM to realise this goal, reassuring that NIA would support the commission in the transition from compliance-based supervision to risk-based supervision and on migration to the International Financial Reporting Standards (IFRS).
“The association will encourage all its members to proactively strengthen their financial and technical capacities for risk bearing, promote a culture of compliance with regulations, corporate governance, Enterprise Risks Management (ERM) and Corporate Social Responsibility (CSR) as an integral part of the philosophy, strategies, systems and operations of member-companies,” he added.
How he intends carrying member-companies of the association this regard would to a great extent determine how successful his administration would be.
NIA launched the Nigerian Insurance Industry Database (NIID) within the year. It said the database would help to eradicate fake insurance as it would serve as a vehicle for easy identification of genuine insurance documents by relevant authorised persons, monitor insurance transactions documents and reduce incidences of fraudulent insurance transactions.
Unfortunately, report making the round insinuated that NIA member-companies have failed to supply the necessary information to make the database functional.
NIA said the database would help to eradicate fake insurance as it would serve as a vehicle for easy identification of genuine insurance documents by relevant authorised persons, monitor insurance transactions documents and reduce incidences of fraudulent insurance transactions
The New NIA boss is now faced with the challenge of getting his colleagues to ensure that the database works by supply necessary documentations to their umbrella body.
As part of effort to increase insurance awareness and deepen insurance penetration in the country, the insurance regulator, the National Insurance Commission (NAICOM) initiated the Market Development and Restructuring Initiative (MDRI).
The project seeks to ensure smooth implementation and enforcement of the compulsory insurances include the third party motor insurance, insurance of public buildings and building under construction, professional indemnity for health workers and group life insurance for employees in the workplace.
Unfortunately, the trillion naira market is not achievable this year but as a booster, the new NIA boss has assured stakeholders that the association would work with NAICOM to ensure this project succeeds.
“The only way the market can appreciate MDRI is to join the commission in the campaign and to comply fully with the policy directives. Insurers must be committed to the support of NAICOM in the publicity and launch the compulsory insurances in various cities and states of the federation,” Olowude said.
Market Agreement and Discipline
To enforce market discipline with a view to protecting the overall industry, the new NIA boss said he would ensure that the leadership of the association leads by example.
“The governing council of NIA will in addition to drawing a charter for all council members on the conduct of business by their individual companies. The proposed charter and adherence to its principles will ensure that council members lead by example with specific reference to market discipline
Member-companies of NIA two years back reached an agreement, which has to do with conduct and service delivery part of which was effective pricing of insurance products. Some members were said to have shown their dissatisfaction about the observation of the tenets of the agreement, alleging that some operators were breaking the rules but the association continued to appeal to them to persist until a full buy in is achieved.
However, this will take a new turn, given that Olowude has given an assurance that himself and by extension the Industrial and General Insurance Plc (IGI) alongside other governing council members and their companies would lead by example in this regard.
Matters Arising from Dana Aircrash
The crash of Dana in Iju area of Lagos State a month ago threw up important issues, chief of which is the ability of the country’s insurance industry to meet other stakeholders’ expectations.
Six months down the line, several allegations of irregularities and deliberate delay in paying the initial compensation on the lead insurer, Prestige Assurance Plc and by extension the other seven co-insurers, the management of Dana Airlines and the foreign reinsurer, Lloyds Syndicate of London represented by Clyde & Co and its Nigerian representative, Messrs. Yomi Osikoya & Co.
Also, it was rumoured that the lead underwriter did not remit the local premium to the respective co-insurers just as the former was said to have alleged that the co-insurers may have refused to contribute their own portion of the $2.61 million which it has paid so far as compensation to victims’ relatives.
The bad press and image arising from this particular incident tends to rubbish whatever positive achievement of the current image laundering and insurance awareness programmes instituted by both NAICOM, Chartered Insurance Institute of Nigeria (CIIN), NIA and the operators in general.
The new NIA boss needs to find a way to intervene even if it means going through NAICOM to ensure that, not only the alleged differences between the insurers on the Dana accounts are resolved amicably, but also the appointed legal representatives of Lloyds of London is not allowed to inflict untold hardship and pain on relatives of the accident victims.
This would go a long way to bring a better image for the overall insurance industry because the industry should not allow a single transaction to rubbish all they have been doing in the last five years.
Meanwhile, Olowude said he would expend energy to ensure that the association wins the support and respect of all stakeholders in the Nigerian economy and strive towards improving the quality of insurance education and practice while building a better platform of communication between the association and all member-companies.
He also assured members that he would work with his predecessors in office to move the association to the next level and improve relationship with relevant regulatory agencies.
Olowude has many things working against him, which is the distrust of Managing Directors of other member-companies, who in the first place voted against him in favour of former Managing Director of Crusader Insurance, Mr. Ted Oviosu.
He however, has one thing working for him and this is providence, since having to get to this lofty position without the vote of any member of the association is a miracle. Now, he has no other option than to fight to regain the confidence of his colleagues so that they would work willingly with him towards achieving some of the set goals.