Igbo: Insurance Broking Sector is Now Sanitised

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Patronage of the Nigerian insurance industry is adjudged to be of low. In this interview with Kasie Abone, the Chief Executive Officer, Stanbic IBTC Insurance Brokers Ltd, Anselem Igbo, provides insight into insurance and brokerage in Nigeria

Improvement in the marketing communications strategies by insurance industry operators has been attributed to be responsible for the sanity that exists in the industry today. According to the Chief Executive Officer of Stanbic IBTC Insurance Brokers, Mr. Anselem Igbo, stakeholders in the last 10 years have improved on the marketing and communication strategy to positively position the insurance industry for better penetration. He however added that more still needs to be done in terms of communication, public enlightenment and marketing strategy.

Speaking further on the importance of communication in the industry  Igbo told ThisDay, “Considering the cost intensive nature for effective communication, I believe we will get more result if public education on the importance of insurance and the communication strategy is done collectively as an industry agenda rather than individual companies doing it on their own. The industry both brokers and insurers should have a strategic communication plan in letting the insuring public know their contribution to the economy. An average Nigerian still has the impression that insurance companies do not pay claim put in reality this is not the case considering the number of insurance claims paid by the industry.”

He maintained that continuous enlightenment of the public and a strategic communication plan would encourage insurance patronage.  In addition he suggested “Also insurance should be included at a very early stage of school curriculum even at the primary school level. The major sector of the industry that is affected by this is the life arm of the industry for most African community talking about death is a taboo but the truth of the matter is that death is a necessary end which must come when it will come. We need to use the traditional means of communication together with the modern means of communication to correct the perception concerning insurance. Also we need to concentrate more on the retail segment of the market, in a situation where most insurers and brokers have their offices in the major cities with no presence in the local areas the insurance penetration will continue to be low. We need to learn from the development in the telecommunication industry and the revolution that took place in the banking industry.”

To a casual observer, the Nigerian insurance market appears saturated yet his company entered the market. Igbo explained on what informed his company’s action. “The holding company Stanbic IBTC Holdings prides itself as an end-to-end financial service provider, before Stanbic IBTC Insurance Brokers the holding company had presence in banking, asset management, pension, trustees, stockbroking and bureaux de change. The coming of insurance brokerage company completed the chain in our drive to be the leading end-to-end financial services provider in Nigeria. The above notwithstanding, we observed a major gap in the insurance value chain mostly on lack of trust and the low insurance penetration. Stanbic IBTC Insurance Brokers therefore came into being to correct some of the existing negative perception concerning insurance, restore public confidence and reassure the insuring public that insurance has huge benefits and pays.”

In entering the market Igbo said his company was committed to setting a standard that would redefine insurance business in Nigeria and drive penetration. “It is important that we distinguish our role as an insurance broker from that of an underwriting house. We are into distribution of insurance products and the only way we can distinguish our service is by partnering with only reputable insurance companies that have the ability to pay claim. In as much as we will not bend the rules our vision is that within three years of operation we will win the confidence of the insuring public to see us as a reliable partner that they can trust in placing their insurable interest with insurance companies.”

He further stated that “One of our strategic intent is to become the market leader within the next five years. From our impressive outing within our first year of operation and the market acceptability we have received I have no doubt that we will emerge a market leader in the insurance broking segment in less than ten years. We have a strong brand to build on and within a small space of time it is very clear to the insurance industry what we stand for. We will follow the leadership pattern of other members of Stanbic IBTC Holdings.”
Explaining the range of services offered by Stanbic IBTC Insurance Brokers he added “we are licensed by the National Insurance Commission (NAICOM) to act as insurance broker in General and life business. With this licence we are allowed to deal with both short term and long term insurance products which include motor insurance, marine insurance, group personal accident, group life, all classes of individual life, property insurance aviation insurance, goods in transit and so on.”

Stanbic IBTC Insurance Brokers, he explained, is well positioned to offer these services to its insurance consuming public because of its strong footing as a member of the Standard Bank Group. According to Igbo “Being the youngest member of the Standard Bank Group has gone a long way to enhancing our acceptability in the insurance industry, February this year was our first year anniversary since we obtained our operational license from NAICOM but Stanbic IBTC insurance Brokers is now a household name in the Nigeria insurance market we are being looked up to for leadership in the market. All this were made possible because of the international exposure we have by being a member of Standard Bank Group. On regular basis members of the team have the opportunity of being exposed to international best practises through various avenues like trainings, sharing knowledge and experience from more advanced clime with better insurance penetration within Standard Bank Group operations.”

Asked to appraise the insurance industry in an environment like Nigerian grappling with multiple challenges of economic recession and development, Igbo offered that insurance business thrives during recession and out of recession as those claims which were ordinarily neglected were made during recession. In his words “The insurance industry is functional in both ways, in the period of prosperity there is more disposable income as a result there will be extra resources to buy insurance. Also during recession as we are in now people see insurance as the last resort. From available statistics more claims are paid during recession as most claims that were overlooked in a buoyant economy are now reported to the insurance companies. There is no doubt that insurance thrives more when the standard of living is high but insurance is also more desired when thing are not looking up.”

On the industry’s reform, Igbo was asked whether he had noticed any gaps that require further reforms to enable the industry operate more effectively. He had this to say “We have a dynamic regulator who is already thinking ahead by positioning to implement a risk based underwriting firm and also allow mergers and acquisition to naturally take place without regulatory inducement. Also the insurance broking sector is now sanitised in the sense that is no longer business as usual most broking firms now take their regulatory reporting more seriously and remitting the premium collected from the insuring public as stipulated by the insurance Act. Having said that there is still more room for improvement but we have to bear in mind that the sector is still at a very fragile stage.”

Asked whether he would subscribe to the emplacement of insurance policies that make certain categories of products mandatory so as to enhance local content and manpower development, Igbo who threw his weight on local content policy was quick to add that insurance business was an international business.  He averred that “In as much as I support the local content policy to develop the local market, insurance generally is an international business from marine insurance to aviation insurance and more importantly the reinsurance market. However in most cases we don’t have the capacity. NAICOM is very strict on ensuring that all risk are exhausted at the local market before placing abroad the truth of the matter is that because of the low entry point of N3billion most insurance companies take a limited proportion on aviation and oil and gas business. The re-insurance treaty may also not be robust enough to enable them take a higher percentage of the risk. In terms of manpower you will be amazed that we have some of the finest insurance practitioners in Nigeria but you still find greater percentage of the special risk been placed  in UK market.