Meeting needs when it matters: NAICOM Partners FITC on post crisis impact on the Insurance industry

The COVID-19 pandemic has thrown significant challenges to businesses across the globe. The impact of this devastating crisis brought by the pandemic affects the insurance industry in multiple ways such as policy payouts, revenue loss, liquidity, technology and market shifts. Each of these considerations has its distinctive challenges and if harnessed constructively, can be a great source of innovation and growth. The impact of this pandemic on the insurance industry varies from employee and business continuity issues to client service considerations to the financial outlook.

Insurers are responding to the widening outbreak on multiple fronts—as claims payers, employers, and capital managers. Each has its own distinct challenges, not just for the insurance industry, but for the economy and society at large.

Some of the fallout from the COVID-19 outbreak includes a surge in health, travel and business interruption claims, pressure on sales from reduced business activity, and less use of face-to-face channels.

The gathering economic slowdown emanating from the pandemic is also driving interest rates even lower and increasing credit risk exposures from businesses facing possible default. This raises the possibility of regulators asking for extraordinary solvency tests to ensure insurers can withstand the immediate and knock-on impacts. Put together, this daunting list of issues represents a stern test of resilience for an industry already weighed down by enduringly low interest rates and slow growth in mature markets.

Against this backdrop, the National Insurance commission (NAICOM) in collaboration with the Financial Institutions Training Centre (FITC), hosted an interactive and well attended cross-border webinar on Tuesday, May 5, 2020, at 10 am (WAT) on ‘Post COVID-19: Impact on the Insurance Industry‘; with Cornerstone Insurance and AXA Mansard as co-sponsors.

The Keynote Speaker is Ganiyu Musa, Group MD/CEO, Cornerstone Insurance PLC; Other Speakers are Sunday Thomas, Commissioner for Insurance/CEO, NAICOM; Shola Tinubu, Managing Director/CEO SCIB Nigeria & Co Ltd, Rashidat Adebisi, Executive Director, AXA Mansard Insurance PLC, Chizor Malize, Managing Director/CEO, FITC and Eddie Efekoha, Group Managing Director/CEO, Consolidated Hallmark Insurance as the Moderator.

The webinar had over 1,308 participants from diverse fields, spread over 4 continents (including 8 countries in Africa) in attendance. A breakdown of participants along organizational roles indicates senior Executive (12%), HR (2.8%), CFO (1.1%), IT (2.8%), Strategy (1.9%) and others (78.8%). A further breakdown revealed that a total of 533 companies across different sectors were represented.

In his keynote address, the Group MD/CEO, Cornerstone Insurance (Ganiyu Musa), who spoke on the topic, ‘Post COVID-19: Impact on the Insurance Industry’, provided detailed background insights on the impact of the global pandemic to the Nigerian economy which is faced with two shocks – the global pandemic and oil price crash. He highlighted the following as some of the key impacts of the pandemic on Global Insurance: Recession and financial crisis, Supply chain, Sales, Operations, Travel and Regulation. He also submitted that the implications for the Nigerian Insurance industry will cut across Revenue, Claims costs, Liquidity, Investment return, Underwriters, Brokers, Regulators and Customers. He concluded by highlighting the emerging opportunities to include Technology and Innovation, Opportunity in Life and Health, Increased Government investment in the Health sector and Creative products for a logistics firm, Internet service providers, etc.

NAICOM – FITC Webinar flyer

The first speaker, Shola Tinubu (Managing Director/CEO SCIB Nigeria & Co Ltd), did extensive justice to the topic, ‘The Shift in Insurance Purchase and Consumer Behaviour’. He gave detailed insights to Evolving consumer trends for insurance products and services; Insurers’ responses to both potential risks and regulatory considerations; and the Changing patterns and emerging issues for Insurance Brokers.

On her part, Rashidat Adebisi (Executive Director, AXA Mansard Insurance Plc), gave a thought-provoking presentation on the topic, ‘Post Crisis Recovery: Driving Innovation for Business Growth’. She decried the poor awareness of Insurance in the lives of Nigerians and acknowledged the unique opportunity provided by the pandemic to change the narrative. She opined that the pandemic is forcing movement from traditional insurance to advanced risk management which will result in a forced change in behaviours, rise in the logistics business and the associated rise in cyber risks. In submission, she highlighted the following five key areas of opportunities for the insurance industry created by the pandemic: Awareness, Products, Technology, Business Models and Digital Distribution. She, however, admonished Insurers to go beyond the norm and think out of the box in order to leverage the opportunities for post-crisis recovery by developing the workforce, re-imagining products, harnessing the power of data, being part of the customer journey, looking beyond insurance and developing an ecosystem.

Finally, Mr. Sunday Thomas (Commissioner for Insurance/CEO, NAICOM), provided some regulatory perspectives and roadmaps aimed at positioning and strengthening the Insurance industry to take advantage of the post-crisis opportunities.

In what appears to be his first official engagement after his appointment as the substantive Commissioner for Insurance/Chief Executive Officer, National Insurance Commission (NAICOM) by President Mohamadu Buhari over the weekend, Mr. Sunday Thomas emphasized the commitment of the Commission to strengthen the Insurance Industry in the areas of Purpose-driven culture, Digital distribution capabilities, Speed of service delivery, Operational agility, Technology and innovation, Informed and proactive capital management and Business Continuity under his leadership.

The moderator, Eddie Efekoha (Group Managing Director/CEO, Consolidated Hallmark Insurance), anchored the Q&A session, with a somewhat general consensus that the COVID-19 pandemic could just be a turning point for the insurance industry by enabling insurers to demonstrate their higher purpose and value to society.

The Chief host, Chizor Malize (Managing Director/CEO, FITC), while thanking all the participants, assured of FITC’s commitment to continuously partner with key industry stakeholders to enhance capacity and growth.

The webinar ended with a poll on how insightful the session was, with 77 % confirming that it was ‘Very insightful’ while 23% acknowledged that it was ‘Insightful’.