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Wake up call on African Insurance Practitioners

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By Patience Saghana
The African insurance industry has for too long assumed that they know what their customers wanted rather than taking the pains to find out from them what they actually needed. Patience Saghana who was at the 36th African Insurance Organsation (AIO) held at Dar Es Salaam, Tanzania reports that participants resolved to now market the industry services to customers rather than just selling of insurance products to them.

Fola Daniels
Fola Daniels

Participants at the just concluded  36th African Insurance  Organisation (AIO) General  Assembly/Conference held at Ubungo Plaza, Dar Es Salaam, Tanzania, appeared to have come out wiser than they went. One fact that stood out of the meeting was that insurance practitioners should henceforth consider marketing of insurance services as a better platform for growing the industry rather than the old method of merely selling insurance products.  This approach, it is believed, would help to attract attention and interest of clients to the industry.

The Prime Minister of Tanzania, Jakaya Mrisho Kikwete, pointed out that insurance business all over the world rely solely on the proficiency of insurance companies in a given continent to be able to sufficiently command the interest of customers to buy their products.

According to him, “Insurance business globally has always depended on the skills of the distributor. Besides, the insurance product is of an intangible nature and the insurance concept itself is less understood by the general masses in Africa”.
In this regard, he further stated, it has to be appreciated that unless the distributor is a wholesome professional rather than a mere insurance person, the African insurance industry will take a longtime to move up to the next level where the common public can access their insurance services and plan their insurance portfolio themselves.

He believes that success of insurance market in Africa depends to a greater extent on the efficacy of the distributor. Insurance distributors in Africa, Kikwete said, have a key role to play in enhancing product visibility through awareness creation and sensitisation of the market.

The Tanzania Finance Minister, Mustafa Haidi Mkulo, noted that insurance industry in Africa had slept for too long to realize that the present day insurance customers have gone beyond accepting any product in the name of insurance.

As a result of that, Mkulo though said it is better late than never, appreciated the choice of the theme of the this year’s AIO, “Challenges of Accessing Insurance Services in Africa” and commended African insurance sector for the apt topic which he believed would find lasting solutions to meeting the changing and sophisticated needs of the industry clients. “Today, when one compares Africa with other continents, its contribution of insurance premium to the global market, is less than two percent. The annual conference and general assembly of the AIO is dedicated to finding solutions to such challenges which by itself, is a good sign that the insurance industry in Africa is now changing for the better,” Mkulo said.

The new AIO president, Mr. Israel Kamuzora, who took over the mantle from Mr. Abdelkarim Djafri, in his acceptance speech promised that he would ensure that the AIO annual conference is just a means to an end but make sure that it will be a vehicle to not just developing the sector further but commanding the attention it deserved in all its ramifications.
“The AIO has continued to grow from strength to strength at the as demonstration by all indicators in the last financial year. With this record of performance, I believe that the AIO is well poised to achieve its mandate of promoting development of a healthy insurance industry in Africa,” Kamuzora stated.

The new AIO boss, who is also Tanzanian Insurance Commissioner, said that he would consolidate on the achievements of his predecessor and also ensure that member countries and companies the AIO get a run for their support and interest in the body.

The chairman, Organising Committee of the 36th AIO, Mr. Sanjay Suchak, explained that the topic of this year conference was deliberated and chosen even before the financial crisis, an indication that the satisfaction of the sector’s customers is paramount to the insurance industry

According to him; “For a number of years, insurance has been of interest to only a fraction of the population in Africa. The theme is therefore very relevant and also a wake up call for all stakeholders to figure out what I would call ‘wide outreach’.
“Our business is unique and leaves no sphere untouched, with every fresh discovery and every new invention come a new challenge for our business, adding that the African insurance industry over the decades surmount many challenges and meeting the changing need of today’s insurance industry customers would not be an exception”.

On his part, the Nigerian Insurance Commissioner, Mr. Fola Daniel, said that African governments have helped to restore considerable confidence in the sector through financial services sector in the various African countries. Government reforms in the African financial service sector through recapitalization, he believes, are aimed at restoring confidence of the public in the market thus enhancing capacity and international competitiveness of local operators.

He further said that, “With the increasing awareness and alignment of insurance with international standards, it is foreseeable that the era of statutory capital requirement will soon become a thing of the past rather, risk-based capital requirement will become attractive as it allows companies to grow at their own pace and size.”

The Secretary-General of AIO, Ms Prisca Soares, in an interview with journalists on the success of the conference, said that AIO had since inception ensured that the conference was going to be a mere vehicle to general income for the body but guarantees that member countries and companies would have good return for the support they give to the body.
Soares stated that the body had a five year strategic plan from 2007 to 2012 on how best to improve the lots of its members. She disclosed that AIO has to a considerable extent achieved some of the plans it set out to accomplish. “We put in place a five year action plan. We cannot say that we have achieved everything but so far, we have remained faithful to that action plan,” she said.

She further noted that member companies have benefited massively from the AIO in terms of exchange of businesses, networking and exposure through exchange of ideas and sharing of experiences.

Mr Johnnie Wilcox, Managing Director of United African Insurance brokers (UAIB) in an interview with Financial Vanguard said that African insurance industry has for too long assumed that they knew what their customers wanted rather than taking the pain to find out from the customers themselves what they actually want.

Wilcox agreed with the fact that the theme of the 36th AIO conference was apt. The theme is timely because we are looking at issues on how best to satisfy insurance industry clients.

He admitted that African insurance industry had for too long taken the needs of their clients for granted. “A lot of things have not been done in the past in the insurance industry. We only assumed we knew what the insurance industry customers want but we have not really asked them what they wanted,” he said.

Another issue that is critical to the sector, the UAIB boss noted, was making insurance relevant to the grassroots people. “We really need to have some product for them which they can afford so that the rural population can have one form of insurance or another to buy,” he stated.

A lot of insurance companies in Africa, Wilcox confessed had shied away from micro-insurance thus running after corporate and institutional business. Insurance brokers, he said, though had little or nothing to do with micro-insurance but he was of the view that insurance agents would be more relevant to micro-insurance than brokers.

Nevertheless, Wilcox said that if only insurance brokers could look closely at micro-insurance, they would find a role to play in generating the needed awareness and creating a vehicle to reach out to the grassroots.

Mr. Femi Okunniyi, Managing Director of Goldlink Insurance Plc, said insurance industry in Africa must be able to create product that best meet the needs of the sector’s clients. He said there is a distinctive difference between marketing insurance and selling insurance.

According to him, “A seller will only take a product to the market just to sell but a marketer  will first research on the need of the customer and tailor the product towards that client’s needs before selling the product to the target client.
“And that should apply to every insurance company in Africa. We must first find out what the customer need before creating the product that suits his needs and by so doing, we will be able to create wealth for ourselves rather first looking absolutely at profit.

“The moment a company begins to look at profit as a major factor of establishing the company, it will miss the track of insurance businesses. A company must first of all render good service and also satisfy the needs of its customers after which it will make profit”.

The Managing Director of Aureol Insurance Company, Sierra Leone, Mr. Solomon Samba, in an interview with Financial Vanguard, without mincing words blamed the African insurance industry for the low awareness of insurance which is the result of low penetration of insurance. He believes that inadequacy of insurance awareness in the continent was as a result of the fact that insurance operators have not lived up to their responsibilities in that regard.

His words: “We will take the blame because insurance industry in the Africa continent has not done enough in creating the desired awareness”.

He however stated that all was not as bad as it looked concerning creating the needed awareness, “Insurance companies are becoming responsive to their responsibilities to the public as relates to insurance and its services,” he said.

Mr Olusola Ladipo-Ajayi, Group Managing director of Lasaco Assurance Plc, who delivered a paper on ‘The Challenges of Accessing Insurance Services in Africa – The Role of Professionals’ explained that trade or occupation transforms itself through development of formal qualifications based upon education and examinations whilst the emergence of regulatory bodies come with powers to admit and discipline members and with some degree of monopoly rights.

Ladipo-Ajayi who was a facilitator at the conference along with other top-notch in the financial service sector including Mr. Salim Ahmed Salim, former Secretary-General of Organisation of African Unity; Mr. Yogesh Lohiya, managing director of General Insurance of India and Mr. Junior John Ugulube, CEO of Munich Re, Africa,  believed that applying the professional skills to marketing insurance had gone beyond just churning out any products in the name of it rather the products should not only meet the needs of customers but that insurance customers themselves must yearn and desire the products.

Meanwhile, Ms Irene Muyenga, former AIO president, did not seem to totally agree with the theme of this year arguing that this year’s topic would have been hinged on the global financial crisis rather than the ‘Challenges of Accessing Insurance Service in Africa’.

Muyenga argued that the topic of the conference were too general in nature. “The topics are too general in nature. We would have chosen topics that are relevant to the global recession vis-à-vis the credit crunch and how the industry has been affected,” he said.

That way, she said, “we would have been able to solve some of the problem that has been caused by the recession. That was what I expected,” she emphasized.

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