‘Credit policy enforcement is lowering the burden of bad, doubtful debts’

As the nation’s insurance industry continues with reform efforts targeted at increasing market penetration, customer protection and good corporate governance, there are hopes that a lot could be achieved if enforcement is strengthen. Eddie Efekoha, managing director/CEO, Consolidated Hallmark Insurance plc at the Company’s meeting in Lagos accesses the ongoing reforms, highlighting accruing benefits to operators and consumers alike. Excerpt:

Industry overview

We have been quite hopeful of a change in tide towards improved insurance penetration via patronage year in year out. As I stated the previous year, expectations of appreciable growth in premium from commendable industry efforts like the Market Development and Restructuring Initiative (MDRI) have not yielded desired results. However, there are expectations that collaborative efforts such as the recent deployment of Nigerian Insurance Industry Database (NIID) will improve insurance penetration.

The adoption of the Thematic Guidelines approach in industry regulation by the National Insurance Commission (NAICOM) is being pursued with more vigour especially in the area of the usage of the International Financial Reporting Standard (IFRS) and as a company we have remained committed to ensuring all regulatory compliance. We have again emerged as one of the very few operators to have their accounts approved early under these standards.

The renewed drive for enforcement of the “no premium no cover” credit policy is expected to lessen the burden of bad and doubtful debts, as the policy provides for stiff penalties for operators who grant cover for risk without premium payment in advance.

Product Rating

In the area of tariffs and ratings for insurance transactions, regulatory efforts have not been strictly enforced, following the collapse of the market agreement drawn up by operators. Industry players continue to enjoy the leeway of determining rates they deem profitable. The industry cut-throat competition has remained, with the regulator however ensuring that customers are not unfairly treated in the event of claims settlement, on the basis of non-competitive rates charged at the inception of the risks.

Web Jurist Award

The deployment of technology and its regular update continue to be a priority for our company as this paid off during the last financial year. We won the Overall Annual Web Jurist Award in the insurance category which was organized by foremost management and training consultants, Phillips Consulting Limited. Omobola Johnson, the minister of communications technology, was also on hand to personally present the award to us.

E-Business & Technology

Our quest to continually enhance our operations using best practices in modern technology led to the establishment of an e-business unit during the year. The unit has since commenced activities, leading to a collaborative arrangement with Zenith Bank during the last quarter of 2012. Purchase of the e-pin across the bank’s counter for online transactions involving the motor third party insurance is now possible. Members of the public can now generate their own online motor insurance certificates using their ATM cards as well as taking advantage of this platform to avoid patronizing fake operators who issue fake certificates. Also, talks are almost concluded for the inclusion of additional banks in the deployment of the platform.

Corporate Social Responsibility

We have remained committed to giving back to the immediate communities where we operate. Towards this end, we made donations to the Motherless Babies’ Homes during the yuletide season and Children’s Day celebration. Lagos State Motherless Babies Home, Lekki and the Hearts of Gold Hospice, Surulere, Lagos were beneficiaries of from this initiative.

Water project was also sponsored at the University of Calabar while we also financed a Group Personal Accident Insurance Scheme for the crop of Nigerian Insurance Reporters under the auspices of the National Association of Insurance Correspondents (NAICO).

Investment in subsidiaries

Our subsidiaries, CHI Capital Limited is beginning to contribute significantly in its own way to the bottom line of our parent company. During the year, there was a rise in assets and LPO financing by Grand Treasurers Limited, a subsidiary of CHI Capital Limited. The staff strength and general operators have been beefed up while collaborative arrangements have been made, and continually being made to ease consumer assets financing with the attendant opportunities for insurance of such assets.

Claims settlement

As the volume of our business continued to grow, volume of claims paid has also grown also grown significantly. A total of N874, 736,420.00 was paid out as claims in 2012 when compared with N662, 547,174.00 in 2011 thus recording a 32 percent increase in claims settlement during the year review. We believe that prompt settlement of claims remains the most formidable way of ensuring growth in patronage. We have therefore reduced our claims processing time drastically, and now striving towards ensuring that payment cheques accompany offers of settlement for some categories of claims. This is being done based on our firm belief that satisfied customers will certainly spread the good news to others.