If insured pays reasonable premium, insurers will be reasonable when claims arise – Unitrust Insurance boss

Mr. John Ijerheime

The Managing Director/Chief Executive, Unitrust Insurance Company Limited, Mr. John Ijerheime, in this interview with EDET UDOH, speaks on his company’s recapitalisation plans and other issues affecting the industry.

The nation’s insurance industry is embarking on a major project of recapitalisation, which many have said holds the future for the business, what is your take on this?

The recapitalisation exercise going on in our industry is a very positive and welcome trend for the growth of the Industry.

The Purpose of the exercise is to have fewer companies that are financially strong and viable that can easily meet obligations. Stronger companies are expected to emerge and that will increase their capacities to take more businesses thereby reduce the incidents of capital flight, especially of Insurance premium and business from our country to other developed countries as being experienced currently. Also, monies made available to companies will be used to improve on IT and other needed growth infrastructures.

For us, it is a welcome development and we as a company are fully prepared to be part of new and stronger companies that will emerge post recapitalization. We have the support of all stakeholders towards achieving this goal.

What is the future of the company post-recapitalisation to give good returns to shareholders and others?

The recapitalisation exercise will help boost our long-term strategic goals of value addition to our owners and other stakeholders. The exercise will see Unitrust Insurance as a big player in the in-Insurance industry taking bigger risk while playing in the global market. Our strategy is to progressively grow our market share and become a market leader by continually identifying, meeting and exceeding customers expectation through operational efficiencies and rendering excellent customer service.

We will remain true to our vision which is to create value to our stakeholders by ethically delivering differentiated products and partnering with clients to proactively manage their risk. Also, we will continue to work at delivering continuous growth using our people and leveraging on technology. Our business model will be driven by structural analysis of our strengths, weaknesses, opportunity, and Threats (SWOT) for responsive bonding. We will pursue the Corporate Business, High-Net worth individuals as well as Retail segments of the market.

We will adopt the following strategies to increase our premium income going forward: Market Expansion, Retention of clients, Improve Customer Service, Develop Alternative Channels, Retail penetration and Direct Business Leveraging on Technology and Insure Tech and Products Development. This is what we hope to achieve as a company, it is in line with our strategic growth plans.

The early passage of 2020 budget into law as well as the Finance Act 2020 seem to create a friendly business operating environment in the current year. Do you agree?

Very well said! I would like to dwell more on the Finance Act 2020 as passed. It is indeed a dream come through for the Insurance Industry and to our company. I wish to commend the present Government for passing this Act because the growth of the industry over the years have been impeded by strangulating taxes. The Act has recognized the strategic position the Insurance Industry plays in the development of the economy and will go a long way to encourage quick growth going forward.

I deliberately will not want to say much about the 2020 Budget because we have witnessed, over the years, poor and low implementation of very good Budget plans by Government. This year budget cannot be an exception because we are already, six months in the year, experiencing a drop in price of our revenue earner- oil- in the international market due to many forces including COVID 19. Even where there are substantial releases by government, the Public sector is yet to key into buying insurance as a risk management tool and yet Government ought to encourage the growth of Insurance as is the practice all over the world.

Insurers are in the business of paying claims. How will you describe your experience in claims payment and management in the last few years, taking into consideration, increased replacement value as against low premium charged on risk.

We have been honoring all genuine claims by being prudent in the underwriting business and we will deploy cutting edge technology to provide the best services in terms of prompt claims settlement in the insurance industry.

What is the total amount of claims unitrust paid to customers this year?

We have paid the total sum of N269,162,424.94 (Two hundred and sixty-nine million, one hundred and sixty-two thousand, four hundred and twenty-four Naira, ninety-four kobo) within the first quarter of 2020. These claims were paid while the country was on Cover 19 lockdown in fulfillment of our avowed commitment to prompt claims settlements.

NAICOM has extended and segmented the industries recapitalisation into two phases, will Unitrust be standing alone during these phases or are you considering a merger?

We have strategic plans on ground to ensured that we meet the required threshold of N10 Billion Naira as required by our regulator National Insurance Commission (NAICOM) currently, our qualifying capital stands at N6billion Naira. We are considering a business combination to get through this exercise successfully. Discussions with a top-notch underwriter is ongoing and the outcome of which will make the brand mega, we plan to compete with the best players in the insurance industry.

Your customers will want to know whether their investment in Unitrust is safe or not. What have you to say in respect of this?

Yes, their investment in 100% safe in Unitrust. We will certainly scale through the ongoing recapitalisation exercise. Unitrust Insurance Company Limited can stand alone but the company is currently discussing with shareholders for a possible business combination with other experienced companies to form a bigger company.

As am speaking, we are 67% of the N10 billion required by NAICOM. I want to assure all our clients that we will recapitalize. There’s no need for fear. Unitrust will stand. In the past Unitrust has always stand alone during recapitalization.

What we are also discussing with our shareholders is may be we should get in some other companies to join us so that we can form a bigger company because the bigger the better for us but for recapitalization, we will meet It.

What do you have to tell the underwriters who have not been meeting their obligations in terms of prompt claims settlement?

Insuring public should pay reasonable premium so that insurance companies can build enough reserves to pay claims when such need arises, also warned underwriters against rate-cutting.

With my experience in the industry, l have come across some members of the public that believe that by charging me the premium that is unreasonable, in event of a claim, he might be unreasonable with me. If people can follow that – if you pay the premium, in event of a claim, insurance companies will be there to meet their obligations.

For insurance underwriters, like the popular saying: what goes around, comes around – if you undercut premium, you will not be able to build enough reserves, if you are not building enough reserves, in event of a claim, there will be no funds for you to pay the claim.

It’s going to be everybody’s responsibility – insurance companies charge the right premium, and the insuring public will pay and they’ll have the benefit of getting their claims when the need arises.

If insurance companies are funny, society help them, encourage them to behave like that. Let’s get to pay the agreed premium so that insurance companies will have the funds to meet their obligations.