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Chief Executive Officer and Founder of Carefirst Consult Limited, Mr Gus Wiggle, in this interview with HENRY FALAIYE speaks about the low insurance penetration in the country, among other issues.
How would you assess the insurance and risk management space?
Insurance and risk management are both in the same ecosystem of assessing, exploring, and quantifying the financial risks that individuals and businesses face and how they can manage them. Insurance is the mechanism with which you transfer the financial consequences of covered loss exposures from the insured to the insurer, while risk management involves the identification, prioritisation, and control of the threats that may affect the activities and goals of the organisation. Unfortunately, we have not wholesomely embraced risk management as we have done for insurance in Nigeria. Not that we have done well in embracing insurance itself but its head and above risk management in Nigeria today. It will surprise you to know that insurance penetration in Nigeria today is just less than one per cent. To me, we are not doing enough to increase the penetration.
You have advocated the creation of the Office of Risk Management of the Federation, with the possibility of President Tinubu creating new ministries. Do you still see this office coming through?
I don’t know what the Nigerian Insurers Association is doing regarding the creation of the Office of the Risk Management of the Federation, but it is an agenda the Risk Managers Society of Nigeria has been pursuing and will continue to push for until it is actualised. It will be unfortunate if the administration of President Tinubu ignores the campaign for the creation of this office, being someone who has been in the corporate world before venturing into politics. But we are hopeful that with the team he has assembled, some of the technocrats in the team will have an eye for risk management and continue the campaign for the creation of the Office of Risk Management of the Federation.
How do you identify and assess the insurance needs of potential clients? Could you give an example of a complex case you handled in the past?
To identify and assess the insurance needs of potential clients, you ask the client a series of questions relating to what they want to insure so that you can identify the types of insurance policies that will fit into the exposures the client is open to. Further questions in the form of a survey will be asked to determine if the exposure is more than intended. There are just too many to try to recall a complex case but imagine telling a manufacturer of goods who have agreed to all the policies recommended to him but disagreed to have business interruption insurance and when the #Endsars riot touched his factory and was out of production, then he understood why he would have had business interruption insurance among the insurance policies recommended to him years back.
How would you assess compliance with insurance laws, regulations, and codes of conduct in Nigeria?
We as a people are not too compliant with laws except when harsh penalties are applied because we have near no consequences for breaking the law and when you are caught, we play the victim card. Where there are no repercussions for offences, impunity will be the other of the day. We always look out for the easiest or quickest way to beat the law, that’s not to say we are all law breakers, no. So to answer your question directly, our compliance rate is average with so much room for improvement.
How do you negotiate terms and conditions to secure optimal agreements for your clients?
When negotiating an insurance contract, it is important to understand what you are buying and what you are giving up on. You should also be aware of the risks involved in the transaction and how they will be allocated between you and the insurer. You need to understand the effects of any exclusion or limitations in the coverage you are paying for. Good contract negotiation benefits both the parties and achieves a fair deal. A negotiation that tries to push the other party to the wall is the worst type of negotiation. You should negotiate with an objective to build a business relationship with the other party and create a contract that helps both of you meet your respective business goals. Above all, I always advocate that you allow an insurance broker to handle all your insurance transactions, it costs you nothing and, in most cases, you get a good deal.
In Nigeria, insurance penetration is relatively low compared to other countries. What is Carefirst doing to promote insurance awareness and expand even your clientele base?
We at Carefirst Consult want to continue to be the bridge between the insurance market and the consumer with our experience in claims management for the benefits of all in the insurance sector particularly as it relates to claims such that more Nigerians will have confidence in insurance. Carefirst Consult is primarily a claims management outfit with extension into risk management and HSE. Insurance penetration will continue to be low in Nigeria until we make a conscientious effort to build confidence in the mind of the consumers and let them understand what insurance is about and the benefits for them. More importantly, the insurance industry will continually be judged by the lowest common denominator which is that they don’t pay claims even when the bulk of the market is doing the right thing or trying to do the right thing. There is the belief that another major factor responsible for low insurance penetration in the country is a culture of delayed payments and non-settlement of claims by insurance companies. We have equally seen the revocation of the licences of key players in the insurance industry for inability to settle outstanding claims. Claims can be regarded as the heartbeat of insurance, being the most critical contact the insuring public has with the industry and the moment of truth that shapes a customer’s overall perception of their insurer. The fundamentals for a thriving insurance industry are present in the country- a vast population, an active economy, and a well-capitalised industry but we need to do more than that by creating more awareness.
Tell us the role of technology and digital platforms in the insurance brokerage industry in Nigeria? How do you leverage these tools to enhance your services?
I honestly don’t know how much technology the insurance brokers have applied to their operations; I don’t think they are there yet.
What are the biggest challenges facing insurance operators, agents, brokers, loss adjusters, among others and what is the way forward?
Insurance operators, agents, brokers, and loss adjusters face different challenges in the insurance industry. Some of these challenges include keeping up with capitalisations, technological advances, managing changes in regulatory environment, managing new and emerging risk, uncertainty in the market. They are so much but I guess everyone is standing up to these challenges. Everyone here, including NAICOM, NIA, NCRIB, etc. On the way forward, the insurance sector should embrace value-added after-sales services, especially efficient and timely claims settlement will help reposition the insurance industry as the pivot of economic growth and enhanced development. Repositioning the insurance industry will involve innovativeness in product designs, using analytics and other technological innovations, creating awareness programmes about the existing products among the prospective customers and using simple language to sell the products.
In Nigeria, there is a growing interest in micro-insurance to cater to the underserved population. Could you explain how your company is involved in providing affordable insurance solutions to this segment?
As you know, our company is a claims management company assisting those whose claims have been denied or unfairly treated by insurance companies, however, given my modest experience in the insurance sector, I can still talk to the question. One of the ways to providing affordable insurance to this segment is what National Insurance Commission has put in place, by allowing traditional insurance companies to develop products that fit into the needs of this segments by creating a microinsurance desk as well as allowing a variety of organisations to offer micro-insurance in super markets, retails stores and dedicated micro insurers. Another way is to leverage technology to sell insurance products suitable to this group and make insurance more accessible and affordable.
Insurance literacy is a challenge. What educational initiatives do your company undertake to raise awareness about the benefits of insurance?
Insurance literacy is indeed a challenge. According to a review of 10 randomised evaluations, eight in 10 don’t want to hear about insurance because of wrong perception of what they know insurance companies to represent. There have been mis-selling of insurance products to uninformed buyers that when claims occur or their policies mature, they are told different stories. Insurance companies need to do more of awareness and build trust in the insurance scheme of informed people. The insurance market must talk and walk in the same direction to earn better reputation from consumers. Insurance should be part of the curriculum in our secondary school and made elective course in the higher institutions of learning.
How is the insurance industry addressing the growing challenge of labour shortage, especially considering the specialised skills and certifications required for many positions?
The insurance industry is facing a labour shortage like every other sector due to combined forces, particularly after the pandemic disruption and great resignation as many youths re-evaluated their jobs and the need to japa. You have little control over these things. Unfortunately, the industry can’t afford to lower their standard in their recruitment and will continue to rely on certification of many of their workforce. The industry will continue to incentivize the workforce and ensure standards are maintained from the broader talent pools abound in the country. Notwithstanding, some of the proactive companies in the industry are already deploying technology and automating some of their functions to augment their workforce.
Insurance regulatory frameworks vary globally. How does your company navigate the local regulatory landscape to provide compliant products?
Navigating the local regulatory landscape to provide compliant insurance products can be challenging. Every company must adhere to certain laws and regulations as part of their operations. The deployment of technology for efficient reporting mechanism assists to adherence to regulatory frameworks without going foul of regulatory compliance.
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