Omo: COVID-19 Will Increase Patronage of Life Insurance

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The Managing Director, African Alliance Insurance Plc, Funmilayo Omo, in this interview speaks about developments in the industry. Ebere Nwoji brings the excerpts:

What do you think insurance operators need to do to ensure optimum performance of the sector?

In terms of performance, there is still work to be done; we need to be more innovative and creative. These two elements are essential to insurance taking its rightful place in the economy. Huge creativity, innovation are needed and the delivery method of insurance needs to be improved upon. When these are structured in, it will increase the level of penetration in Nigeria. It will bring a lot of investment in the retail sector of the economy because that is where we have most of the population; the bottom of the pyramid.

What has your firm done beat the recapitalisation hurdle?

I wish I could specifically list our step-by-step plans towards recapitalisation but as you know, this is a very sensitive topic and I cannot say much. However, I can assure you that we have the support of the shareholders on our plans and we are already in the middle of execution of the plans we have towards recapitalisation and we are sure we will be long done before the deadline. We are confident that with the kind of support we have received from shareholders and the plans we have in place; we will meet the deadline.

Your firm is one of the oldest in the country still vibrant whereas many others have died mainly due to inability to cope with competition or recapitalisation, what has been your driving force?

Being in existence for 60 years means there must be something we are doing right. The major thing that has kept us in business is the customer and the customer experience and that is what we keep improving on and this is how we keep raising the bar. So, every activity here is channeled towards improving customer experience and this is what has distinguished us from others as an organisation and sustained the brand. Again, relationships go a long way in sustaining businesses and this has been my value proposition for three decades now. Keeping relationships is where my interest and passion comes from so, the ability to manage customers overtime, retain them, keeping them satisfied continuously has kept us in business.

Hence, infrastructure, processes and the personnel all focus on our customers. We have a team of professionals that manage the business and we constantly improve on our processes in the business. We just recently got our ISO Certification and this is part of business advancement because we have a business continuity plan in place which supports that. Lastly, we have strength in the familial leaning of the company. We are one big family. This culture has been with us since inception and I am the latest in line of home-grown CEOs the company has seen, albeit the first female CEO.

What is your reaction to a recent report on your late filing of your company’s reports and alleged sanctions?

For the records, although African Alliance did miss the deadline for filing its returns to the Nigerian Stock Exchange (NSE) but we have since requested and received approval for the extension of the deadline for the submission of the reports.
This much and the reason for our inability to file were communicated in a notice published by two national dailies and on our website on Friday, 5 June, 2020.
For emphasis, we also wish to bring to your notice that our 2019 AFS and first quarter UFS have been submitted to our primary regulator (NAICOM) for approval, hence, the delay.

What are some of the challenges your firm has faced in the past 60 years of its existence?

The challenges we have had over the years have been competition, the business environment. As you can see, the investment climate has been very volatile and interest rate fluctuation is sometime else. Another challenge is the global economy generally because the world has become a global village and whatever happens in business on the global scene has a way of impacting businesses locally. A typical example is this current pandemic, the COVID-19 the world is battling with. With this pandemic now, we still need to manage the recapitalisation exercise and still run our business. The major lesson these challenges have taught us, especially COVID-19, is that you must always factor into your business the fact that things can change at any time and this is why business continuity is very crucial; because it is the continuity of the business that will make you meet targets and also deliver value to all stakeholders.

What Impact do you think the COVID-19 has or will have on your business?

The impact of the pandemic on the company’s profitability means more income for the company because life insurance is likely to sell more this period. As people who ordinarily do not give attention to the importance of life insurance which we have been preaching, will do so now. On the flipside, there would be more claims as many affected by the pandemic would need to dip hands into their investments to get by. This was the reason they bought the policies in the first place. So, for any insurer to turn profits from the increased income, they have to ensure their actuarial valuations are top notch so the expected increase in income is not wiped off by excessive claims.

How has the COVID-19 affected your business?

Like every other company, COVID-19 has altered operations as digitalisation is the new order. Our digitalisation process has been accelerated. Now most of our products are completely available for sales online without need for any physical contact with a salesperson. Before now, we had gone paperless meaning we do minimal paper processing in-house, up to 98 percent of in-house processes are paperless. The way forward is what we call the new normal. Working from home will become a norm and already, our human capital department is reworking its policies to ensure performance management is less dependent on presenteeism and about outcomes and results not just outputs.

What role do you think government should play to ameliorate these challenges?

Essentially, the government needs to provide an enabling environment for businesses to thrive. The interest rate needs to be stabilised by the government. The government also needs to ensure that each sector needs to operate optimally. For instance, with respect to life insurance, up till now, the government that is the highest spender is yet to pay premium. In fact, throughout last year till now, it is yet to pay group life premium. What this means is that any employee of the federal government who died in service, will not get any death-in-service benefit.

What are your post recapitalisation expectations for the industry?

Post recapitalisation there will be more confidence on the part of the insuring public and financial strength on the part of operators. Recapitalisation aside bringing financial stability is equally part of confidence building aimed at ensuring that the insuring public are happy, comfortable and confident that their risks are being managed effectively. Therefore, since the exercise is to guarantee sufficient capital to match the risks that are being managed by insurers, I believe to a large extent that it will further instill and sustain the confidence the insuring public has on insurance and likewise change the negative perception of the industry since companies will have adequate capital to fully carry out their obligations effectively.

Compulsory insurances and their enforcement is one thing that should have aided the growth of the industry, but after its launch, not much has been realised what is actually wrong?

Regarding compulsory insurance, the government has tried by instituting it but they have also aided in ensuring it is not adhered to because they are not setting good examples for others to emulate by not paying their own part of compulsory insurance premiums. The government has a vital role to play in ensuring that they live up to the commitment they have made, thereby encouraging both the informal and private sectors to also obey the law. If the government obeys its laws, then the private and informal sectors would have no choice but to follow their lead. The only way we can ultimately have people obtain compulsory insurances is to have sanctions and this will happen when there are adequate management mechanisms put in place by the authorities.

African Alliance Insurance is celebrating its 60th year anniversary this year, what has been the journey so far?

African Alliance is a foremost life insurance company, incorporated on May 6, 1960, and founded by the inimitable duo, of Chief S.L Edu and Mr. Talabi Braithwaite, who were widely regarded as the first chartered insurance practitioners in Nigeria. Munich Re was a co-owner and technical partner. Their vision was simple: to be the most preferred life insurance company of choice. To achieve this, the firm set out to make the customers its primary focus, which would create a lasting legacy for themselves in the lives of Nigerians. Building a lasting legacy means having a string of innovations under your belt. African Alliance is notably famous amongst others for being the first life insurance firm to introduce Takaful; an Islamic compliant insurance scheme in Nigeria. This feat was achieved under the leadership of the then CEO, Mr. Ope Oredugba in 2002, who had, in the wake of the introduction of the Sharia law in parts of the north, felt there was a niche in that line of insurance that could appeal to the region. The impact of Takaful in Nigeria was so great that less than six months after its formal launch, the company was being inundated with request from within and outside the African continent by those seeking to benefit from the products. Today, Takaful has grown into one of the most viable business lines in AAI so much that it has easily warmed its way into the hearts of non-Muslims alike.

As the incumbent CEO, what is your prime target?

My immediate priority is to drive premium income along all the product lines and business units. Already, we have targets set for this purpose. My second priority is organisational development; to develop our people in the organisation because we can only be as strong as the quality of people in the organisation. The third one is to ensure that we sustain and possibly improve on visibility because driving visibility will also help the brand and dovetail into the bottom-line. So, for us here at African Alliance, those are the key priorities for this year and I believe we have put structures and mechanisms in place to enable us achieve these objectives and we are driving it aggressively. Another target is to improve our visibility, I mean we want to be in the mind, face and in the heart of every Nigerian. We just don’t want to be a household name but a household thought. We want to be the