African insurers take firm stance against unethical practices

Modestus Anaesoronye, Businessday Online –

Express readiness to harness opportunities in micro insurance

Determined to move the insurance industry forward, stakeholders in the African market have resolved to deal decisively with unethical practices they noted remained the major drawback of the industry in its quest to build capacity.

Such practices as rate undercutting, premium purchase, undermining of each other, according to them, have plagued the industry over the years and have contributed to low capacity, low profitability, poor claims settlement and generally low image for the industry in the continent.

Rising from the recent 37th annual meeting and general assembly of the African Insurance Organisation (AIO) held in Banjul, The Gambia, stakeholders involving insurers, reinsurers, brokers, loss adjusters and the regulators in a communiqué decried the impact of the ugly trend on the growth of the industry.

They said to be able to tackle the problem they must formulate a unified code of conduct agreeable to all practitioners as a tool for the regulation of the industry and have appropriate sanctions to deal with those who were in breach of the codes.

Besides, the industry must recognise the role of other stakeholders such as the judiciary, governments, customers and the general public in the enforcement of the code of ethics and work in concert with all to ensure adherence to ethical and highly professional standards.

Meanwhile, the market is also looking at increasing its penetration, and the stakeholders have therefore agreed that micro insurance presents opportunities for the African insurance industry to reach out to the poor and vulnerable who form the majority of our societies. “Micro insurance products demand innovativeness in both product design and channels of distribution and premium collection,” they noted.

According to the players, a well managed micro insurance regime will not only result in long-term profitability but will also involve the delivery of corporate social responsibility to the poor and vulnerable segments of our societies, and thereby go a long way at enhancing their individual corporate and industry image. Though, while the stakeholders agree that Africa present a big market for its growth, they noted that some critical factors to the survival, growth and continuous development of the industry were the effective and efficient management of the human and financial resources.

To this end, insurance companies must take urgent steps to put in place human resource management policies that will ensure the recruitment of the right calibre of personnel and their continuous training, and professional development supported by attractive remuneration and other incentive packages that will ensure retention and high level performance and loyalty.

That human resource development efforts should not be limited to lower and middle level personnel only, but must also be extended to senior management and board members whose corporate governance responsibilities are crucial to the sustainable development and profitability of companies, the communiqué stated. “That, systems must be put in place for periodic assessment of performance of staff and board of directors preferably by independent external performance auditors”.

Top Nigerian delegates at the conference include Fola Daniel, commissioner for insurance; Joe Irukwu, doyen of the insurance industry; Justus Uranta, managing director, Niger Insurance plc; Eddie Efekoha, managing director, Consolidated Hallmark Insurance plc; Val Ojuma, managing director, FBN Insurance Brokers; Tope Smart, managing director, NEM Insurance plc; Wale Onolapo, managing director, Sovereign Trust Insurance plc; David Shobanjo, managing director, AIICO Insurance plc; Larry Ademeso, managing director, Royal Exchange Prudential Life plc, etc. Other resolution as contained in the communiqué includes:

• That the survival of the insurance industry in Africa, especially after the disastrous effects of the financial crisis, hinges on the rebuilding of trust and confidence among consumers and no effort should be spared to achieve this.

• That aside from the various things that we have to do to improve our internal operational efficiency and effectiveness, we must do all it takes to attract and manage consumer trust and confidence by acting in responsible ways regarding what consumers and our other key stakeholders consider fundamental and important to our business.

• That our various national associations must take the lead in developing and implementing policies and programmes that will continuously enhance our professionalism, ensuring that we compete on professionalism, innovation of products and customer service.

• Finally, that we must actively engage and continuously seek healthy collaboration and cooperation with regulators to ensure a conducive regulatory framework that will promote and encourage a vibrant and viable industry in Africa.