‘Insurance must also seek to drive growth of the larger economy’
The insurance industry under the umbrella body of the Insurance Industry Consultative Council (IICC) will between 9-11th July 2017 in Abuja hold its third National Insurance Conference with the theme ‘Nigeria Open for Business.’ Shola Tinubu, chairman of the conference planning committee in this interview with Modestus Anaesoronye shares his thought on the conference, the industry and future of the business. Excerpt:
The theme of the conference ‘Nigeria Open for Business’ sounds strange to what you have always been known for. What informed choice of this theme.
Anyone who has been alert to what is happening in Nigerian in the past couple of years will actually realise that Nigeria has been going through a major economic turmoil. There have been political ramifications of it and there have also been major economic ramifications. When we sat down in the committee, we now started looking at what kind of topic will be germane to our economy and the public at large. And there were several topics that were chosen before we narrowed it down to this. We found this as a theme that could open up the vista to the various discussions that we need to move on as a country. Some may blow out in the political, some may blow out in the core economics, but we just thought that it was the core thing to do.
We also realise that no country is an island now, so no matter what kind of solution you want to have for your economy or for your country, you must also look at the ramifications elsewhere. So what we have also done is to get another part of the conference, to look at what happened as a comparative position with other countries and that is actually the main theme. We feel that if we bring people to start discussing on an intellectual basis, what exactly is happening to us, without the emotion that usually find on various social media, we may begin to start looking at what the solutions are.
Incidentally, it was only after we picked this topic that we now started seeing information on ease of doing business, which is not exactly what we are talking about. We are talking about Nigeria open for business, but then, ease of doing business is a major aspect of it. We now saw that government was actually giving that emphasis and we now thought this will be fantastic to expand the scope.
But, what is your interest on the subject as an industry?
One of the things we also found out in the past is that insurance industry has been a bit insular. We come to our conferences, we discus insurance very well among ourselves. But we also forget that we are actually suppose to be serving other stakeholders, and we are suppose to be a major player in the economy. How come we drive only strategic issues that impact directly on our own market instead of looking at it from a global perspective because if you don’t drive things like our Gross Domestic Product, how can our own industry grow bigger? So it is not just that insurance industry are the only ones that should drive it but that every other sector should also be driving Nigeria’s output for business. We realise when the economic downturn happened, there was hardly any sector it did not affect.
What impact has the previous editions of this conference had on the sector?
Every effort that is made in its own time takes you up a step or two, and that step could be 10 steps or 15 steps or more. I believe that the conferences of the past also had a major impact. The major impact that the first one had was that this was the first time we were all coming together for a conference. That impact itself was like the time when, after long term of military rule, we came together to get democracy. Just the fact that you were even having democracy itself was a major achievement and with this one, i think it was exactly that. Just the fact that the industry was coming together with one voice itself was a massive impact which is not the impact that this conference will have because we have already come around now for two conferences.
The second one even tried to build on that and we started seeing more participation from government entities and government functionaries, and this one, we want to even build further on that spread. Spread not only in government functionaries but also business leaders. We are trying to spread to other stakeholders and extract what values they can bring to our industry.
How has the IICC as a lobby group for the sector fared in terms of relationship with government?
I believe there has been a remarked improvement. Anytime you create a platform for people to discuss, sometimes the creation of the platform itself bring success because when you are together, things are discussed as they are happening. And therefore, there is no room for misinterpretation and miscommunication. Sometimes you say, have they been able to intervene in any issues and crisis, but you might say maybe they have not done much in terms of that. But then, you might ask, has there been crisis for them to actually resolve? Just by that creation, because they are talking every time on issues, explanations are getting convened on things that are happening in the broking arm, the loss adjusters, e.t.c. so that is done before it becomes any problem. I believe that immediately it started, the IICC make that major impact, and i believe we have now found the platform were we can discuss problems and challenges that unifies us, instead of all the different arms going to resolve the same kind of industry’s problems but in their own way. We are beginning to look at things together and that is a good thing.
At the end of every conference, you come up with a communiqué, what effort do you make to ensure it is implemented?
What we first did was to look at the past and did the analysis on how to create more effectiveness on our implementation and moving forward. The ideas have come that we should actually have a standing implementation committee like a sub-committee, which will continue to look into that and drive it all through. We believe that it should be headquarters at the CIIN, because it is the global body of all the professionals in our industry.
How can insurance contribute more to national economy?
One of the things we have talked about for many years is insurance penetration. And people think insurance penetration can happen just by insurance operators doing their business a lot better. It is not true. For many decades, many of the reasons why insurance penetration has not occurred is because, first, you don’t even have payment platform for people to pay, because for your to get insurance penetration, what you are saying is that you want to take insurance products to the grassroots; you want people to be able to buy insurance, even if it is N50 or N40 insurance. How do you collect this little money from people in the village? If you send people to go there and spend N10, 000 to collect N50 premium, is that a business? It is an issue for IT; it is an issue for banking and other financial institutions, because they are the ones being used for payment and the rest. So, we then reaslise that if we sit down and start strategising and start thinking by ourselves, meanwhile the problem that we need the result is external to us, we may not actually move as far as we should. So, the kind of impact we want is to be able to look at other stakeholders, and that is why we invited many other stakeholders to be able to channel some of the challenges we have.
How strong is IICC to fight for insurance industry when you consider the challenge annuity faced recently. What role did you play?
When you are talking about people negotiating positions, we must never stop negotiating. If you don’t negotiate, or discuss, what you have is chaos. When you talk about people negotiating, the moves will always be there for give and take. It may always seem as if you got the wrong end of the stick, the major problem is that we need to go to the root of it. Pension itself is insurance. It is a critical problem that we have because in Nigeria, unlike other countries, pension is part of insurance anywhere in the world. When you talk about insurance penetration in South America, South Africa, Europe, we are talking about insurance industry including pensions. And you now compare those indices with Nigeria, where insurance industry does not include pensions. So all the trillions under management in pensions are part of insurance. We need to understand that it was just two sides of the same insurance industry that were struggling for it.
Even if we had separated those industries, we should be looking for one singular regulator. Until you get one singular regulator, you are going to be having this fire fight. Anywhere in the world, a singular regulator supervises pension, insurance and even banks. So we should also be looking at that, it may not be for today, but that is the general direction, then we can stop this fight and control things at the beginning.