‘Attitude to insurance changed after industry consolidation”
Consolidated Hallmark Insurance Plc (CHI) is 10 years old, having emerged from the merger of three entities in 2007 following the industry recapitalization. Eddie Efekoha, managing director/CEO of the Company in this interview with MODESTUS ANAESORONYE bared his mind on the establishment of the company, challenges, achievements, and future of the industry in Nigeria. Excerpt:
10 years of successful business in Nigeria, how did it all start?
Yes, 10 years ago, some developments took place in the insurance industry. Principally, we know of the recapitalization that was induced by government through the National Insurance Commission (NAICOM). It spanned over a period of eighteen months and ended February 8, 2007. While some people saw it as an opportunity, others saw it as a challenge. For us, we saw it as an opportunity to increase in size. So, rather than go it alone we decided to go as a team in other to build capacity. So, our way of responding to the recapitalization was to go through a merger which was a merger of three companies. They are Consolidated Risk Insurance Plc, Hallmark Assurance and Nigerian General Insurance Company, and fortunately we did that and NAICOM issued us a license. So, by March 1, 2007, we opened to business in the name of Consolidated Hallmark Insurance, taking advantage of our brand combination and this reflected in the choice of our name today. This is how we came about the company we are running today.
Focus of the 10 years celebration…
We are celebrating 10 years from the time of this merger not when they merging entities came into the business of insurance. There were many stakeholders in the merger and the first to give kudos is the investors that went through the court ordered meetings that gave birth to this merger. All of us can vividly remember what happened then, when we had to all face the wall of NAICOM office in Abuja like students waiting for the result of an exam, until your name was called you were not sure you have scaled through. As soon as we concluded the process of getting our license from NAICOM, we came back happy and the process of integration started. In integrating, we looked at key functional areas of the business, issue of staffing was also critical because we ensured that we didn’t lose our best hands, but also were mindful because we needed to ensure we raised our standard and had a minimum benchmark. We had committee empowered by the board and they went round all the company locations, conducted fresh interviews and as soon as you crossed the minimum benchmark. So, when that was concluded, we issued ourselves fresh letters of appointment. That is why as we celebrate 10 this year, many of our staff who was part of us at the beginning have clocked 10 years working with us. We also worked on the technical side of the business and integrated all the operations and processes.
Many businesses that started off 10 years ago are no more today; can you let us know what you did differently to weather the storm?
We cannot say is by our power, Attaining 10 years is by God’s grace. They said the race is not to the swift, so we cannot say that we were strong to have survived the past years. I think God got us to where we are. It’s unfortunate if any company fizzled out within the past ten years. I would not say they did not pray hard enough; but for us we prayed and also worked very hard. This is a service business, so it’s largely premised on people and if you don’t have the right people you are not going to be able to make it. As soon as we concluded the merger, we had a retreat where we agreed our core values and also agreed to change our logo. In the process – we saw that the real core values of professionalism, relationship, integrity, customer focus, excellence are people-driven not machines. It’s only people that can drive them, and so we came up with this offline “We are what we have”. So, we focused on people and have continued to build on our strength and capacity. We tried to select rightly and that is not to say we did not make mistakes. We also emphasized on technology, which are needed to help our people deliver. People alone cannot deliver and so we emphasized technology.
What was it like after the merger?
You remember we are the pioneer promoter of online third-party policy and the acting commissioner for insurance at that time was on ground to flag it off and we went all round town. By and large, the product got matured and we went on. In between, we realized that if we must survive these ten years we needed to pay attention to these key stakeholders that made this merger possible. How do we respond to them? By paying dividends. We did not pay dividend all the years, but we paid dividend most of the years we existed after the merger. And it will interest you to know that a company that was capitalized a little over N3 billion, has paid to date about N960 million divided and by the time this year’s own is added we would have crossed N1 billion mark. This has helped us move from our year zero to year 10. The principal thing in our business is the payment of claims. So, we made sure that in these ten years we have paid claims the way it is supposed to be paid, against the perception out there about insurance. So, each year when we go out to say ‘Happy New Year’ to our clients and brokers, we are encouraged about the comments they pass on to us about our prompt claims payment practice. So, we are getting our own share of the market. It could be better but we are grateful to God. And we have enjoyed the cooperation of our board, being that they gave us freehand to operate. There is absolute trust between board and management and this has taken us to where we are today.
Looking at the insurance industry pre and post consolidation, what has changed in insurance?
I think before consolidation, our attitude to business of insurance was far low. Today it is better. First is that the industry had more money post consolidation. The average wage bill has gone up; there is more money for advertisement, there is more money for awareness. We are engaged in one education activity or the other. Today many insurance companies are engaged in sponsorship of golf. How many could do it at that time? If you say they are doing only one advertisement now, before they were not doing anything at all. We were not having insurance as subject in secondary schools, today it is offered at WAEC level. Many higher institutions today offer insurance as a course, unlike accounting that you find in every institution. You will see that post consolidation, things are happening. Are we there yet? The answer is no. But are we better? The answer is obviously yes. We have done something, but it could be better.
Nigeria is currently undergoing a recession, how has the insurance industry fared?
Recession is a matter of a very short time. Yesterday and today, World Bank said Nigeria is out of recession and the presidency said they are conscious of it and they are waiting for the figures from the National Bureau of Statistics. Truly, you will feel it. Yes, we are beginning to feel it. When we were in recession, we felt it. So as we are getting out we are also feeling it. If the federal government had funded the foreign exchange demand the way they have done and have been doing it, we wouldn’t have gotten to this level. And for them to have funded it and still grow reserve is a pointer to the fact that we are out of it. And when you look at it sector by sector, you find out the financial services did not really go down like that. Oil and gas ran into hitches, no thanks to restiveness and insecurity by the ‘boys’. But a few visits initiated by the presidency and anchored by the vice president and talking to the leaders and the ‘boys’ have brought the whole situation under control. Just a word of reassurance, “we value you; we are part of you” and all that. We no longer hear bombing of pipelines. Every individual is important, even in our companies. Recession yes! It takes time for values to go up; it will also take time for it to come down. There have been job losses here and there, but the ingenuity in us has also helped us to remain growing and insurance has really found relevance in the current situation. The current situation has thought people on the need to save and that has further re-echoed the need for insurance. While it lasted, it impacted the business, no doubt. The capacity of most of us to buy insurance was limited, some factories closed down and all of these impacted on the business.
As a major stakeholder, what do you see as the future of insurance in Nigeria and where is CHI in the picture?
The indices are clear. If you look around, you will see that a lot of our friends from outside Nigeria are looking at Nigeria and if they are doing so, then you don’t need any one to tell you that there is something good about us or a potential they are seeing. It then means that those of us here should equally watch out. You have seen that the minister recently engaged the market and has continued to engage the market to unlock its potential. This has been further strengthened with recent developments in NAICOM and all of these are to help harness the potential of the industry. Unlike before, government is beginning to understand that in its bid to grow the economy, to get out of recession, insurance cannot be handled the way it has been. For us as operators, we should roll up our sleeves and see how we can take advantage of the opportunities in our industry.
MODESTUS ANAESORONYE