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Nigeria Never Lacks Regulations but Implementation

Patience Saghana
Mr Larry Ademoso, Managing Director of Royal Exchange Prudential Life Plc in this interview with Patience Saghana relays his experiences in the insurance industry, the prospects and potentials that abound in life insurance business and the role of government in boosting life business in this country. Excerpts


Overview of insurance market
My view is that, the insurance industry is not taking its proper place within the financial services sector. The major culprit if you ask me is the government. If the environment is not that conducive for the ordinary man like you and me, nobody will buy insurance. Insurance is the last if we look at people’s order of preference today. Even for corporate bodies, insurance is probably the last thing they want to look at. Even when we advertise, people still accuse us of not doing much on advertisement to create the needed awareness.

If you put a bill board in front of a hungry man’s house with a screaming headline saying come and buy insurance, the guy who is struggling to put food on his table or looking for shelter won’t think about insurance. So government needs to play its own part to enable insurance take its proper place. But that is not trying to lay the blame squarely at the door step of the government.

As practitioners, the truth is that, we have not invested enough in our people. It is only now that we started doing that. If we are not interested in technology, there is no way we can drive insurance business especially life business without proper technology which is why Royal Exchange Prudential Life Plc is investing heavily in Information Technology platform. We are installing the latest version of applications for life insurance business. It will enable us to drive life business on-line effectively so wherever you are in the world, everyone will be able to access our product, clients will be able to access their policies and also print them out.

You will remember that we pioneered the scratch card solution regards to some of our product offering. These are some of the things we were able to do, and I’m very happy to have been part of that development for the insurance company. So basically, if we put our house in order, the potentials are there more so with a population of over 140 million.

Why the government?
Government should live up to its responsibilities by respecting its own laws. If you have a law in place that says public and private sector employees must be fully insured under the Pension Act and the group life scheme, it should be respected. But you will be amazed that even as we speak, majority of government departments and state governments do not have group life insurance scheme in place. We can start from that basis; government should try and respect its own laws. You will discover that some of them do not even have budget for insurance and these are compulsory laws and compulsory insurance.

So, how do you want to hold other people accountable if the government that should be the driver of laws is not respecting its laws? Then for the insurance companies, I think government need to do more in terms of providing the friendly environment. Friendly environment includes our responsibilities to stakeholders, the public, the shareholders and all that. What I found out is that we have quite a number of regulations. Nigeria has never lacked regulations; I think the challenge has always been the will to implement the regulations. In this regard, government needs to strengthen its agencies.

Thanks to the National Insurance Commission (NAICOM). The commission has been doing a lot in that regard. NAICOM is doing a lot in terms of developing its own internal capacities to be able to deal with internal challenges.

First and foremost is for the insurance industry to create more awareness. There’s no way we can hope to develop this very important sector if the environment is not good enough.

The man that is struggling to pay is staff salary may not think of insurance and if you look at his order of preference, you will see that there are so many things he wants to do; he wants to buy diesel for his generator and so many other things calling his attention. He puts insurance as his last priority.

It becomes his priority only when the right amenities are in place. But if we have improvement in the provision of the right amenities, that is, infrastructure and others, people will embrace insurance and that is when whatever awareness campaign we have done and still doing will work.

Improving life insurance business
I will say with all sense of modesty that we started activities into the annuity programme long before NAICOM came with the guidelines and regulations. About 18 years ago, we had invited Alexander Forbes to work with us in reviewing our portfolios and to also help our own internal employees to develop some annuity products but we could not start selling those products at that time because we were just waiting for NAICOM’s guidelines. But now that we have the guidelines, we have forwarded those products to NAICOM. So as soon as we received approval from NAICOM for the products which are five in number, we will go to the market with them.
Major Accounts

We are basically on major government accounts. We are on Shell in spite of the very bad experience; we are on the NNPC life scheme. And for the multinationals, we are on Leventis and many others, both private and public sector accounts. We are the primary underwriter for some of the health scheme of the Ministry of Health. We are spreading and also participating in quite a number of Embassies.

There’s no magic. I started my insurance career with Perpetual Assurance Company as a manager, I worked with them for about 8yrs then I moved to custodian where I worked for about three years, and from custodian I moved to Phoenix of Nigeria Assurance Plc where I was the General Manager (Operations).

As a result of the merger between Phoenix and Royal Exchange in 2007, I became part of the Royal Exchange Assurance of Nigeria family where l was seconded to Royal Prudential after which l was moved to the group as the group head marketing and sales from where I was appointed as the as the Chief Executive Officer Royal Exchange Prudential Life.

I think I have been very lucky to have worked with some chief executives. Some very exemplary C.E.Os that is what I use in describing especially two of them – my first M.D, Mr. Sanni of Perpetual a man with a lot of native intelligence and I also happened to have worked under Mr. Wole Oshin a man with a lot of modern intelligence. Both of them gave me a lot of exposure hence I will say, I have been very lucky to have worked with those two people. And I have also tried to do my best within the opportunities given me. So really, there’s no magic.

New position
First and foremost, I have been very lucky to have the Royal Exchange brand behind me and so, basically whatever I’m doing, I’m able to do within that context. Royal Exchange as you know is Nigeria’s first insurance company. We started business in 1921 primarily as an insurance company. In 2007, following series of repositioning we decided to go into other business set-ups, now we have the health care, microfinance, life business and the general business.

And now
It is a privilege and it is also a challenge. A privilege that you have a lot of technocrats, so you are lucky to have worked in an organization where there are a lot of structures and challenges in the sense that you want to ensure that in this dynamic business world that customers do use your age positively for you. So, in achieving that balance, I must say is been quite challenging. In as much as we want to face the future squarely, we do not want to forget where we are coming from in terms of our business ethics which is very important to us. Our drive is to do quality businesses in the most ethical way, in spite of all the challenges in the market.
Future target

We are planning to go into retail business. We have convinced our directors, the owners of the business and all stakeholders are convinced that the future of life insurance business is retailing. That was why we invested into the scratch card technology. Currently we have about four life products on the platform because we are also going to use that platform to sell other products within the Royal Exchange group. Our sister company, Royal Exchange General will be launching about six products on that platform very soon and the same with our health care company.

For Royal Exchange prudential Life specifically, we believe that before the end of the year, we should have about eight products on that platform. We have about two to three products awaiting approval from NAICOM. We believe that the future of our business is retailing and we are currently putting in place structures that will boost retailing in order to ensure that our products are available anywhere in the country and anywhere in the world. That is our vision and that is the future of this company.


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