‘How technology, partnership, recapitalization will drive insurance growth’

Head, Corporate Affairs, Leadway Assurance Company Limited, Bunmi Adeleye, (6th left) with members of National Association of Insurance and Pension Correspondents (NAIPCO) at the event.

Experts who spoke at a one-day workshop organized by Leadway Assurance for Insurance and Pension journalists in Lagos recently have identified ways of driving growth in insurance industry below are the excerpts.

Partnerships, innovative products greater focus on prevention, new services base models, technology and collaboration among industry players are required approaches that would drive growth in insurance industry not the traditional approach of selling protective products.

Speaking on “Trends for Insurance in 2020” Principal Manager, Leadway Assurance Company Limited, Mr. Akinyemi Alebiosu, charged insurers to form ally with Insuretech and consolidate their peers, stressing that, ‘a rapidly changing industry will require unprecedented deal-making skills.

Alliances/Partnerships/Technology
While citing example of alliances and partnerships between AXA Mansard and Jumia; Leadway Assurance and GTBank and Leadway and ARTX, he said “incumbent firms can no longer rely on organic growth or internal innovations…”

He said new technologies is a given, as some technologies are gradually coming up to offer insurance services, thereby displacing the services of the traditional operators, adding that insurers need to know how to deploy the right technology for the right purpose or risk being left behind.

He made the example of Autogenius and Lemonade who offer full online insurance services, stressing that, the era of loyalty to a brand is fast fading. ‘Customers have no loyalty these days, what they are after is to get the services they want at the right time without any delay,’ he pointed out.

In the future, he said, relationship or ability to pay claims will no longer be a selling point, as virtually all underwriters then will and can pay claims, but that, what will sell a brand is its ability and how easy for customers  to buy a product and claims payment.

Recapitalisation
The ongoing recapitalisation in the industry, he said, will ensure financial strong and competitive firms emerged post recapitalisation, which would give companies the financial strength to underwrite huge and lucrative risks, thereby, limiting risk flight abroad.

This, according to him, will increase the chances of insurers to pay claims promptly, have the needed technical expertise to launch innovative products, while increasing insurance adoption and contribution of the industry to the Gross Domestic Product (GDP).

Innovative products/new services-based model
The traditional approach of selling protective products, according to him, is inadequate for the insurers of the future, adding that, growth will come from, innovate products, New Services based models and a greater focus on prevention Investment Income.

Agric insurance for Agric value chain
Mr. Adebayo Olubolajo of the Agric Insurance Department of Leadway, while making his presentation described insurance as the foundation upon which all businesses are rest, adding that insurance remains the succor upon which business especially agricultural business wil rest for continuity and profitability.

Olukolajo said insurance is essential in Agric value chain because of the risk exposure in the agricultural sector. Currently, he said, Agric insurers have products that covers virtually the entire Agric process which has somehow limit the impact of risks on players in the sector.

He said with the advent of technology and infrastructure, farmers are embracing modern civilization and in turn increase output/yield.

Livestock farming, according to him, is a very important aspect of agriculture in Nigeria, adding that the Nigerian community depend mostly on meat from Cattle’s birds and other meat producing animals for daily protein consumption.

In terms of employment, according to him, agriculture is by far the most important sector of Nigeria’s economy, engaging about 70 per cent of the labour force.
In order to appreciate the risk in agriculture, he called on insurers not to see agriculture as just farming but as an enterprise and that consideration should be given to every activities/participant involved from pre-production (farming) to post harvest, including input producers/suppliers, the farmers, produce marketing, processing, export financing and consumption.

He noted that risk that affect a part would affect the others, adding that not all risk that is in the agric value chain is in insurance which means that insurance is yet to cover all available risk in the agric value chain.

Risk in Agric value chain/Insurance policies
Some risk in agric value chain and those exposed to these risks, according Olukolajo include: transportation accident, flood, weather, burglary, fire, warehousing, draught, diseases, fluctuation in yield/price, environmental risk and human resources risk.

Those exposed to these risks are farmer/primary producer; agro dealers; input suppliers/distributors; processor/manufacturers.

To tackle these risks, he said, the company offers the following insurance policies: Good-in-Transit Insurance; fire & Special Perils; Storage Insurance; Product Liability; Poultry Insurance; Livestock Insurance; Farm Property and Produce Insurance; fishery Insurance; Public Liability Insurance; All risk Insurance; Machinery Breadkdown; Business Interruption Insurance and Marine Insurance.

Leadway Microinsurance products
Similarly, Ngozi Ochei, General Insurance, Retail, Leadway Assurance Company Limited, while making presentation on ‘Leadway Microinsurance Products,’  said its Personal Accident Cover comprises of Basic and Silver Plans.

The Basic Plan, she said, is being sold at N1,250 annually with Death benefits to the tune of N250,000, Permanent Disability of N250,000 claims and Medical Benefits of N50,000. On the Silver Plan, she said, the cover goes for N2,450 premium, while the policyholders is entitled to Death Benefits of N500,000, Permanent Disability of N500,000 and medical expenses of N100,000 depending on the status of the accident victims.

On its Motor Microinsurance Policy, she said, the policy is being sold to vehicle owners at N10,000 annual premium as its has Third Party coverage of N1 Million and Own Damage to the tune of N250,000.

Similarly, she stressed that its Hospital Cash Policy is designed to provide financial benefits for hospitalisation arising from accident or illness.

Stating that, the product is meant for people under the of 65, she added that, the cover is limited to Government,  State and Mission hospitals, even as this product has, Premium Basic, Premium Class and Premium Plus varieties.

‘Insurance remains the succour upon which Business, especially, agricultural business will need for continuity and profit,’ he pointed out.

Importance of Life Insurance
Mr. Fatai Kareem of the Life Business of Leadway Assurance, had earlier spoken about the importance of life insurance cover while highlighting the documentation required before a death benefit is paid to the beneficiary of the deceased.

He charged Nigerians to engage the service of a lawyer to guide them when taking life insurance products, adding that, such legal personnel would be able to guide them on writing of will and how to process a Letter of Administration from the probate registry in a situation whereby the deceased died without leaving a will.

Term Assurance
On Leadway Term Assurance, he said it is a flexible assurance product that provides money to members of the family upon the death of the Insured life. It’s so flexible that it allows you state the term of years you want to set up the assurance for as well as the amount of money payable to your family after passing so the amount is calculated into a premium you would be paying. This Assurance plan pays out the lump sum to your named family member when you pass.

“You choose the amount of the lump sum you want payable and the length of cover, and your premium is calculated accordingly. For an additional sum, you can extend cover to apply where you contract certain named critical illnesses or become permanently disabled because of an accident anywhere in the world.

“You can choose to pay your premiums in any way that suits you best: a one-off premium payable at the commencement of the policy, or a monthly, quarterly, half-yearly or annual premium. The premiums you pay qualify for tax relief and can therefore, reduce your tax bill.

“You have the right to cancel your policy and receive a full refund of premiums paid if you do so within 30 days of receipt of the full policy documentation.
“You can also opt for a Leadway Lifestyle Protection Plan which has all the benefits of a Term Assurance and more, such as protection against inflation, a Job Loss cover, amongst other things,” he said.

Earlier, in her opening remarks, the Head, Corporate Services, Olubunmi Adeleye, thanked the journalists for finding time to attend the training, and reiterated Leadway Assurance’s commitment to continued interaction with relevant stakeholders for the growth of the industry.

She said the workshop was to ensure journalists reporting insurance business acquire more knowledge on underwriting practice, the leading insurer in the country, adding that the company would continue to maintain a good working relationship with the insurance journalists, whom she described as partners in progress.

The President, National Association of Insurance and Pension Correspondents (NAIPCO) Mr. Omobola Tolu-Kusimo of the Nation Newspapers, in her closing remarks, thanked Leadway Assurance Limited for the training, and assured them of NAIPCO’s continued support even as she called on other insurance companies to borrow a leaf from Leadway Assurance for a regular training for journalists to keep them abreast with the latest trends in the industry.