By Ifeanyi Ugwuadu
Charting a new course for a business in times of economic downturn is a daunting task. Combine this with a near collapse of infrastructure and an economy that is struggling to find a footing in both regional and global scale, then the challenges are just incredible.Â
But that is the task Mr Godwin Ejembi Odah, the one year old CEO of Union Assurance Company is set to achieve.Â He is no stranger to challenges and sets out plans to taking the company to first five position in few years despite the hostile economic environment.
Can you assess the insurance environment
Insurance should be the source for promoting business in the first place because insurance helps to protect your wealth and also helps you to take business risk more easily where structures do exist.
The absence of structures is a major problem. For instance, elsewhere when you want to buy an asset you get this asset to be financed by financial institutions like a bank.
In order to feel comfortable with the financing, the bank will want to ensure that whatever is being financed has to be insured like a mortgage. For a bank to give you a mortgage facility, they must have ensured that it is properly insured so that insurance companies need not have to go canvassing for insurance from those who want mortgage facilities.
The banks already ensure that adequate insurance is in place, so also it is with motor vehicles.
In most organised economies, if you want to purchase a vehicle which is financed by a bank, you have to ensure that you have a comprehensive insurance for the vehicle that you are purchasing in order to conclude that transaction. It is not after you have got the asset that insurance companies would have to run after you begging you to insure.
It is the decision of everyone, the financier and the owner of the asset to effect their insurances. These are examples of the structures I am are talking about. In this country today, you buy your assets and then you seek to buy insurance and invariably most Nigerians are looking for the kind of insurance that will enable them pass police check points. They do not consider the implications for the asset itself.
Quite alright,Â the insurance will enable you pass police check points but does not protect the asset itself. This is the problem with an economy that is predominantly cash- based, because a lot of people do not buy asset using bank financing.Â ItÂ indicatesÂ an underdeveloped economy.
In this economy, you donâ€™t have to source funds for everything you want to buy from your internal sources â€”Â the banks are there to fund acquisition of assets â€” and as part of their credit risk management, they will always ensure that these assets are insured.
All that I am saying is that unless we move from a predominantly cash-based economy to credit economy, the economy can hardly develop very well. I hope one can begin to see movement in that direction by government.
As it is today, the middle class is beginning to reappear through saving financing. There are a lot of products by banks to encourage the purchase of assets through credit, this is what helps the middle class because they can access this credit because of the fact that they have credit loans, they can pay for this credit on a regular basis through their salary, a lot of banks have these products already. I can see this continuing, while the pension system is working towards that direction.
How does insurance play in economic downturn
Insurance is about the only industry that exists solely for helping other industries to survive. Insurance helps generate confidence and gives the business impetus to exist without bothering about failure. It generates enough entrepreneurial confidence which oils the wheel of economic development.
The issue is whether or not there is enough confidence on the part of the insuring public to give the insurance industry the opportunity to play this role. Certainly, it has not been taken to the level it ought to be. We should be able to see a lot more confidence with companies coming forth to place their risks in the insurance companies and believe that at the end of the day they will play their role as risk bearers especially in the event of loss occurrence.Â If you relate it with the economic downturn â€” once there is an economic downturn â€”Â the first priority is survival.
Anaverage entrepreneur wants to know if he can really survive the storm.
Ironically, this is where insurance should come in because your ability to survive hard times, your ability to survive losses, depends on insurance if businesses are properly covered.
If you experience a loss, you get compensated.Â An entrepreneur should sit down and ensure that his operations in terms of risk aspect, in terms of the possibility of losses or unexpected happening to an aspect of the company are protected. If all those things are taken care of, a lot would be achieved.
How has Union Assurance fared since change in top management of the parent company, Union Bank
The changes in the top management of Union Bank has not affected our operations.Â You could say it has an impact at the board level because the managing director of the bank is the Chairman of Union Assurance and also some board changes in the personnel of the bank will mean that other representatives will come in.
In the day-to-day operation of Union Assurance especially in underwriting, settlement of claims and marketing, nothing has changed. The top management of the bank has embarked on broad-based confidence building and as confidence is being restored on a daily basis by the new management, I believe that it will rub off positively on us because the brand called Union Bank is an important brand in the banking sector.
The change has not affected the operations of Union Assurance as a company. We will have new directors in our board that we believe will partner with us, make us achieve our vision and the structure we are trying to put in place.
What structures do you envisage in this instance
We are in the process of establishing a structure that can rapidly grow this business because the primary objective is to take this company to the next higher level in terms of growth. And for that to happen you must have a strong plan to see this growth through.
Therefore, the structure has to be built to give stability to the aims we are trying to achieve. This includes the corporate organisational structure itself because when you have a strategy in place, you must have a structure that supports that strategy.
If you have a growth strategy, the structure that supports that strategy has to be put in place. Precisely, we have a new organogram that will make it possible for us to grow our business.
Of course, it is also important to tackle the issue of growth itself on the platform of how rapidly one wants to grow and what is the most viable growth strategy.
We have identified a couple of them; one is in the bancassurance plan devolving from the kind of relationship we have with Union Bank.Â Bancassurance is a very attractive strategy because we can then come into the bank and leverage that to develop products that are relevant to the clients of the bank.
There is a saying that everyone who has a banking need will also have an insurance need.
That is what is driving our own perspective. Bancassurance has to spring up in that angle and come up with products that are unique to us as Union Assurance which will address potential needs of these clients in the bank and outside the bank. There is the issue of visibility- greater consumer recognition.
In order to be able to achieve our objectives we need to create more visibility around ourselves. We do not have to wait on the bank, no matter how strong you are, we want to create greater visibility for this company, that means reforming the brand itself â€“ the Union Assurance brand. We need to look at the element of the brand, you need to look at your environment of work, the mission statement, all these have a role to play in creating a new impetus for work
What is the framework for achieving this objective
That is very important.Â We think that we need to appear visibly to the insuring public. It is logical that you need to be known more as a provider of services for you to get patronage Therefore, visibility is very important to us in business rebranding.
What we have done so far is to embark on change of our logo to a more creative, simple and appealing impression.Â We shall be launching this early next year. Our new logo is one that engenders confidence in the brand.
You need simplicity, completeness and attraction, that is what our new logo represents. Beyond that, we have embarked on restructuring practically all areas of our business.
We intend to go into bancassurance as I earlier said.Â Bancassurance involves volume and you need IT infrastructure that is robust and sophisticated to be able to cope with process handling.Â As we speak, we are undergoing a process of re-engineering that will enable us measure, analyse and determine our risk in a sophisticated manner.
Beyond IT, we have also gone through a process of business strategic development and planning, we do realise that to be able to achieve the target we have set for ourselves, my colleagues in- house are involved in the planning process of developing a very robust plan which has everybodyâ€™s input. It is that process that we have our vision statement and targets we have set that are clearly defined.
How unique is Union Assurance
Union assurance has a dynamic team that is trying to achieve lofty goals. Our belonging to a large group, the Union Bank Group comprising several subsidiaries offers us huge marketing opportunities. We havenâ€™t tapped effectively into the group but now, we intend to tap into it more effectively. This is why this bancassurance model is a key pilot to achieving it.
We donâ€™t have the track record of being 30 or 40 years old, but the fact that we are young means that we are mobile. We can make decisions and run with it as quickly as possible without being bogged down by cumbersome protocols.
We are also attracting lots of good hands who want to identify with us. We have a company with energetic young people who are inspired and want to make a change.