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Global insurance giant, Oldmutual, wants to boost Nigerian economy by creating pool of savings

by Ignatius Chukwu

October 1, 2017 | 6:00 am
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Confidence seems to, once again, return to the Nigerian economy, which has been described as one of the fastest growing economies in Africa, a growth that has brought the recessed economy out to 0.55 percent in the last quarter. Now, global insurance giant, Oldmutual, says it has noticed this change and wants to latch onto it.
The company said it wants to grow with the Nigerian economy. The Group Managing Director (West Africa), Zomunoda Chizura, said: “We have seen that the Nigerian economy is now out of recession and we believe that the role of Insurance in economic growth is that it creates and increases the pool of savings. So, for us, it is a type of benefit that we are providing solutions to customers, creating a pool of savings, providing a basis for the economy to grow.”
The topmost managers of the South African goup stormed Port Harcourt in the week where they have the third office presence in Nigeria after Lagos and Abuja to hone strategies for the oil and gas sector with dedicated products, according to the top managers. The team led by the GMD Chizura; Managing Director (Life), Keith Alford; Acting Managing Director (General), Japheth Duru; Chief Finance Officer, Afolabi Lawal; Customer experience Head, Rachel Millar-Jaja; and Daminola Olatunbosun (in charge of media) joined their regional manager, Leonard Oyinbo, to thrill the Port Harcourt business and financial community at the Hotel Presidential at the stakeholders’ forum to launch their continuous education scheme said to be the new way to boost insurance penetration in West Africa.
The GMD (Chizura), made it clear that West Africa has huge opportunities. “We think the penetration of insurance in West Africa is much lower than other comparable economies. It is less than one per cent in Ghana and in Nigeria compared with other countries such as South Africa where the penetration is more than 15 per cent. So, the West African insurance market offers a massive growth opportunity. The economy is improving in West Africa and we do see a lot of opportunities.”
He theorised that different countries go through different paths of growth and that West Africa is going through a different path from other countries. “So, there are areas where West Africa is more than the others but insurance and some other financial services sub-sectors are not advanced. Banking is more advanced than other financial services.”
Financial education, he said, remains the way out even as political stability grows. “Stability of the financial market is important. There is an opportunity to stay in the financial market long time. It is just a phase that countries go through.”
On whether some regulatory compulsion could help to push people by force, or just to leave insurance purely to willingness, the GMD said: “I think for it to be sustainable, it has to be left to willingness. Regulations may help but in our company, we believe in solutions that attract people. Even before people are forced, they would see the benefits for themselves. For instance, if they see across generations that insurance can help, they will join. If my children see that insurance helped me, they would take up insurance cover. The solution is in talking to customers than compulsory insurance.”
Oldmutual seems to see fresh boosts in the Nigerian economy West Africa is a microeconomic zone but sees no risks that could not be managed. “For us, there are no risks that are not surmountable. We have planned for all the foreseeable risks.”
For Oldmutual, there are two broad strategies on product rollout. “It will be both benefits-as-you-go and benefits after death. It is going to be financial education as driver. Benefits after death can only come after others see what those who took out insurance got. That is our best selling point. In our long-term forecast, we are patient to develop products for both long term and short term benefits,” he explained.
He called on staff members to always apply truth in selling policies to clients to build long-lasting relationships, an insurance company you can trust. “It is one-sided equation. For us, it is customer, customer, and customer. If it is not for the customer, it is not worth it.” He said those who sell with lies may face ugly situation when the client dies and the children or widow comes for claims.
Oldmutual has also seen Port Harcourt as an economic hub because of oil, so has rolled out solutions to the oil sector and to oil workers. “We also have retail solutions. There is opportunity in every direction in Port Harcourt. Some of the products are unique, but we believe that it is not the product itself that matters but the total delivery; the customer-experience that offers solution to the customer.”
This could be why Oldmutual chose someone with fire and force like Leonard Oyinbo as regional manager in Port Harcourt who equally sees such vision. Port Harcourt may be a volatile market but he says Oldmutual is equally a very strong brand. “We have carved out very strong products to enable us push beyond boundaries to make sure we penetrate this market. Bringing the customer together like this is part of the strategy to show them they are important. Yes, it is a volatile area but let them know that they need protection and make their businesses grow. They need to know somebody has got their back. That is why we are here. Yes we have fantastic oil and gas products to accommodate their risk. The oil/gas sector is a very capital intensive one, thus we have developed a strong and robust treaty to address the needs of the sector and the region.”
The Managing Director (Life), Keith Alford, who hinted that Oldmutual is barely five years in the Nigerian market 9through acqisition), explained the penetration strategies of the new but gigantic entrant. “There has been very slow penetration rate in Nigeria but there is concern at all levels. Everybody wants an increase of awareness of insurance in Nigeria. This will take more years. We at Oldmutual have developed a package of five modules called financial education. We provide this to existing clients and potential clients whereby we take all the workforce of people who would like to attend these courses and understand financial education. We find this is helping greatly. As more awareness and education spread, people realise the need for life insurance.’
As if aware that most Nigerians hardly joined a scheme except they saw beneficiaries, Alford said two sides; the first is protection, to ensure that everybody is protected. Life is a risk and as a responsible parent, if something should happen to you, it is important that your family should at least continue as normal; food, education, clothing, health, etc. If there is flood, fire, etc, there would not be much anguish. As people understand the risks, they feel more peace of mind. Lots of Nigerians are interested in saving longer term so we find their product depth. One successful one is called ‘Short and Long Pocket’. If there is the need, one can access that service.”
Alford said Oldmutual, an experienced international company (about 180 years), is very privileged to be Nigeria. “We are here to do the right thing and abide by regulations and really focus on customer service. We maintain our number one position in Africa and bring that experience in Nigeria. From a West Africa point of view, it’s one of our aims to be number one or two as we are in other regions of Africa.’
About the uniqueness of the Nigerian insurance market and lifestyle, he said Oldmutual would create more products as they understand the market and as needs arise. “There are things we understand such as transport fares, entertainment, etc. It depends on the needs of the clients and their ability to pay. We are here to boost the sector, maintain our number one position in Africa and bring a customer experience. We are open to suggestions”.
Showing more clearly what Oldmutual is bringing to the table in the Nigerian insurance market, the Acting Managing Director (General), Japheth Duru, said: “Oldmutual is bringing that confidence to Insurance. Nigerians have apathy to Insurance and so they do not participate but if they see trust, they will insure. Nigerians are likeable people who need wealth. This is what the company has come to fulfill.”
Duru explained how Oldmutual came to Nigeria. “Oldmutual Insurance is a frontline insurance company in South Africa. They came into Nigeria to really advance the course of Insurance business and lead the market. Nigeria is a developing economy. The company wants to come and help to develop this economy through integrated services. They came in by acquisition of Oceanic Life Insurance Limited and Oceanic General Insurance Company Limited. They did this through their Eco-Transnational Corporation.”
Though risk is growing higher in Nigeria such as kidnapping, violence, insurgence, etc, reign but Oldmutual seems unfazed. “Insurance companies are into risk management. So, irrespective of the adverse effect of risk, we have the capacity to manage it effectively. It is not that insurance companies turn down risk, but if the customer does not have good risk management culture, we advise the client to do certain things to manage the situation comfortably. If the client does not comply with the risk management recommendations offered by the insurance company, then the insurance company may not underwrite the risk but if the client complies, it would be easy to handle.”
He gave reasons for the low insurance penetration in Nigeria and West Africa as poverty, low per capita income, and ignorance. “We require the right education, the right campaign, mass literacy campaign to move people to understand the critical benefits of insurance.”
On those to embark on this awareness drive, Duru said Insurance practitioners and operators need to take up this task. “Some people think it requires millions of naira to get involved. A customer can take a small amount of cover. It is just that education that is required to get the masses aware of the critical place of insurance in their lives,” he said.

 

Ignatius Chukwu


by Ignatius Chukwu

October 1, 2017 | 6:00 am
  |     |     |   Start Conversation

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