Mr Eddie Efekoha, Managing Director of Consolidated Hallmark Insurance Plc (CHI) in this interview with Patience Saghana touches on a number of issues bordering on the insurance industry and how best the sector can move forward in the light of the opportunities that abound in the industry. He also throws light into CHI and what makes the company thick.

Excerpts
How far has the insurance market developed?
The Nigerian insurance market is getting more dynamic and only companies with the right competencies and resources can play effectively in the emerging market. The next phase of the insurance industry would demand innovation, agility, size and track record  performance of individual companies. We, at CHI, are therefore building on the successes we have achieved to date to position our company for better performance in the future.

We build our business around our customers. Our policies are tailored to address their peculiar needs. We go to greater length to understand their perspectives and ensure their needs, either as corporate or as individuals, are addressed. Where we identified support services that could compliment the need of customers, we have had to adopt lateral integration to meet those needs especially where third party solutions produce a possible point of failure.
This has pushed up the number of polices written by the company, which has steadily grown at an average of 50 percent per annum since 2007, so our agenda to double our customer growth year on year is therefore well on course.

We recognize insurance brokers and agents as major channels to reach the market, because they are value adding members in the customer service chain. We maintain  professional relationship with the brokers market knowing that their primary interest is to get for their clients insurance covers that represent the best line of fit of quality and cost.

Our people have been trained to go the extra mile to support the brokers to fulfill the obligation we owe our customers. The quality of an insurance cover becomes manifest at the time of claim, so we have redefined our processes to ensure a quick turn-around-time to settle all claims professionally. We also work out solutions that could foster a better image for the overall insurance industry.
What is your overview of the insurance industry?

I think the industry is doing well, the market size has grown, and some of the things that had happened to the industry in recent years had been gladdening. All we need is for  operators to cooperate among ourselves. I think we need to talk more; the market was greater in those days when practitioners  were talking to themselves.

When you reject a risk for too low premium, you will find out that another company will accept the risk that way. As a result of that, we just undo ourselves and the industry suffers for it. There is need for cooperation, there is need for the skill level to improve, and the skill level is still low.

What are your views about market association and regulations?
The recent past has witnessed increased efforts and commitment s on self regulation by the market coupled with improved regulatory oversight by the National Insurance Commission (NAICOM). This is a positive development and in tandem with the way our company’s operations have been designed and managed.

We continue to update this programs in line with emerging trends and based on a strong believe that there is no alternative to a disciplined market.

This is the only way to bring out the best in all players in the overall interest of the insurance industry, the insuring public and the economy as a whole. Enforcement of market discipline is also essential ingredient for the industry to have a place on the global insurance scene.
Exploiting the energy insurance market

The energy insurance market comprising oil and gas and the power sector is a huge market for the insurance industry. It is also a business with significant demand on resources, technical skills and international affiliations.

We are currently getting our fair share of the market as the sector has progressively contributed an increasing proportion to our gross premium income over the years. In 2009, it contributed 11 percent as compared to 4 percent in 2008 and just one percent in 2007. We will continue to upgrade the technical skills in the company to ensure that we maximize the potential of this arm of our business, while we shall take into consideration our capacity, so that we do not unduly expose ourselves to this high risk line of business. Our reinsurances remain a formidable ally and are ever ready to support us as we continue to demonstrate that we know what we are doing.

2010 is coming to an end yet the local market is far from the 70 per cent oil and gas retention target. What is the way out?

It depends on how you define this target. When we define the gross premium income in our market, you will find out that part of that premium is reinsurance premium.

If therefore you are looking at the 70 per cent as the gross acceptance by the insurance company out of which maybe 40 or 60 per cent will be reinsured, why not, even the 100 per cent can be insured with us, we can say the 100 per cent can be insured with us because there is no insurance industry that can thrive in the absence of reinsurance. Even the reinsurance companies reinsure themselves.

When we are talking about retention, I want to believe it is the net retention; this market has not developed enough financial capacity to cope with that, we will be failing in our duty if we work against the principle of insurance which is spreading all the risk. The risk is continuously spread, so I should take just enough for my retention. I will say 70 per cent within the meaning of insurance, yes it can be retained, when it is retained by the local insurance companies, what needs to be reinsured will be reinsured.

How involved is Consolidated Hallmark in the oil and aviation business?
That is one area that we have really done well. It is still a capacity limited sector. We cannot expose the entire shareholders’ funds to that class in spite of the increase in the local retention that is why we still reinsure some of these businesses. If you play professionally, you will know that you can only expose certain percentage of your shareholders funds to a given risk.

That we did not have a claim yesterday does not mean are will not have a claim tomorrow. Therefore, you need to play professionally so that you are not affected; bearing in mind that insurance is a very conservative risk so you have to play it according to the rules. Our energy business is on the increase, our shares in that business has grown substantially but we are very careful and watching our risk exposure, whenever we need to buy any reinsurance cover, we do and when we don‘t need to, we don‘t, provided it is within our reach and retention.
How has your online motor insurance product impacted on the industry?

We flagged off the motor third party online, which is a channel we evolved to sell motor insurance to the insuring public. We realised that we are in the age of technology and Nigeria is fast embracing Information Technology, we saw that convenience is a broad issue of purchasing insurance services and that was why we went all out to develop that channel, we went round presenting it to all the major stakeholders in the market, today, it has done  well, it could do better.

I say so because a lot of the people who we are targeting do not even have a computer and printer at home, when they do, power supply is not there. We planned to solve the problem for people who don‘t have time to procure their insurance policies. When they get home, within ten, fifteen minutes on the computer, they can purchase their motor insurance.
How is CHI building the right competencies for the future?

I am more than convinced that the progress we have recorded to date is because of the quality of the people that we have been able to retain in our business. My next passion is to ensure that we make our company the best place to work, make a career and succeed as persons. We have developed a performance management system based on a balance scorecard model.

This is to engender a stakeholders approach to how we do business and ensure merit driven environment where staff are able to excel and achieve their full potential.

I will therefore continue to focus my energy on attracting, training, motivating and retaining the best hands available in the market and where necessary outside it, so that the next phase of our business can translate to a faster growth across all indices. We would not build capacity only for today, but will provide the platform for a successful transition to create a lasting legacy.