Insurance industry performed above average in 2019 – Bode Opadokun
MD/CEO, FBN General Insurance Limited, Mr Bode Opadokun
The Nigerian insurance industry is evolving and confronting with many challenges, but undaunted in all fronts. In this interview with EDET UDOH, the Managing Director/Chief Executive Officer, FBNGeneral Insurance Limited, Mr. Bode Opadokun, rated the performance of the industry above average in 2019. Excerpts:
How will you rate insurance industry in 2019 and what are your expectations going forward?
The Nigerian insurance industry performed above average over the course of 2019. The improvement in the use of the Nigerian Insurance Industry Database (NIID) by underwriters for motor insurance businesses led to improvement in easy of capture of motor transactions. Although, in the interim, the industry still experiences a soft market cycle, where rates are increasingly declining and more so, consumer awareness on Insurance products grew on the backdrop of efforts of National Insurance Commission (NAICOM); Chartered Insurance Institute of Nigeria (CIIN) and Nigerian Insurers Association (NIA).
The industry also witnessed the acquisitions of some companies by global insurance companies.
We envisage significant improvement in regulatory guidelines targeted at deepening the market opportunities.
On recapitalization, the number of market players is expected to reduce. This will ultimately lead to better value propositions for the insuring populace and healthy competition among industry players.
On regulators, would you say the industry is properly regulated? Or what is your take on this?
Currently, the Nigerian insurance industry is a highly regulated space. As much as possible, there is need for the enforcement of compulsory insurance among individuals, public and private entities in Nigeria. This can be achieved through collaborative efforts among all relevant agencies of the government, private sector, regulatory bodies and insurance industry players.
In 2019, in your own assessment, what are those impressive and ugly things that happened in the industry?
The industry witnessed influx of foreign players and investors which is healthy for the market. There were mergers and acquisitions which are indicators of the massive potentials in the Nigerian market among peers.
However, in spite of the progress realized during the year, frequent shift in regulatory guidelines posed some challenges for the industry players. More so, dwindling macroeconomic trends affected the pricing and uptake across all customer segments.
Insurance industry is presently undergoing another round of recapitalization. So far, what would you say about the process and what are your suggestions?
The process has been fair. NAICOM recently extended the deadline till December 2020 which is a demonstration of its commitment to the recapitalisation objectives and the compliance efforts of industry players. Our suggestion is that NAICOM should maintain the new recapitalisation deadline while it continues to provide relevant support for industry players on the path towards meeting the new minimum capital requirements.
The much talked about N300 million insurance industry rebranding project initiated to change public perception about insurance and also create awareness to deepen penetration has been stopped due to what the committee handling implementation of the project called uncompromising attitude of some operators toward their financial obligations for the project. What are your views on this?
It is sad that the project was abandoned. There is need to re-evaluate the cost implications of the rebranding exercise in a bid to achieve the set objectives. In the meantime, every player in the market needs to ensure prompt claims payment as this is one of the best means of creating a better image among the insuring public.
How do you see the industry in 2020?
We expect massive growth in the industry in 2020. Foreign players will continue to find the Nigerian insurance industry attractive. We envisage increased trends in mergers among fringe players. The Adoption of technology will increase as industry players explore means of achieving cost leverage and process efficiency. Innovation will become a critical differentiator among industry players. This is inevitable as consumer demands and tastes continue to evolve.
What are those things you think were not done in 2019 in the industry which you strongly believe if there were done would have better positioned the industry?
We cannot really say what was not done. In our view all was done to boost the industry to the next level. There is need for us to continue to deploy best practices across board so that the industry can fully harness its market potentials.
Some industry stakeholders believe the industry is overcapitalised. Do you agree with this? If no, what is your take on this?
The industry is not overcapitalised and as a matter of fact, the industry still needs more capital. For us as an insurance industry to compete with the global market in terms of risk retention, we must, of necessity, increase our minimum capital requirement. There are insurance risks in Nigeria that cannot be underwritten by local insurers. Hence, they have to be taken abroad. We believe more capital will bolster the local retention capacities so that the industry can play its part in supporting Nigeria’s economic growth aspirations.
Tell us about the achievement of your company in 2019 and your plans going forward.
FBNGI has done well. Over the 3-year period, we rose from being a fringe player in the non-life segment to playing among top 10 by Gross Premium and Profit among General Insurance companies in Nigeria. We are increasingly gaining traction around the deployment of technology to drive efficient product distribution and process efficiency. Product innovation forms the core of our drive to ensure we meet the specific needs of our customers. We are the fastest growing General Insurance company in the Nigerian Insurance industry. We recently won an Award for Innovation in Information Technology.
At FBN General Insurance, we recognise the immutable merits of maintaining a “You first” mindset and culture, as a critical component of our business strategy. Our brand has evolved over the years, with strengthened brand muscles to match the constantly evolving expectations of our customers.
Our brand interacts with our stakeholders and demonstrates an understanding of their busy modern lives or businesses, to support their aspirations. Hence, we have evolved over 120 years by respecting and upholding the shared heritage relevant not only to today’s modern Nigerians but also today’s modern world.
We live by our beliefs and consistently strive to Inspire Understanding, Drive Collaboration, and Build a Better Way to unify and strengthen our brand to delight all stakeholders. Consequently, we work daily to implement best practices through our culture and ultimately enable our employees to understand our customers’ lives and be driven to meet their needs appropriately.
Our plan going forward is to reinforce our market leadership by providing best-in-class solutions for our customers.
