By Rosemary Onuoha

Custodian & Allied Insurance Plc said it is setting up systems and structures that will outlive the present management team and become institutionalised in the country.

The managing director of the company, Mr. Wole Oshin, who disclosed this to Vanguard in Lagos, noted that their ambition is to lead the market not only in Nigeria but in Africa, adding that they have a very big vision and will execute it step by step.

While stating that the company is pursuing everything that will make the organisation institutionalised, Oshin noted “For us at Custodian we believe very much in systems and corporate governance, we are not there yet but we are trying to get there. We are pursuing the institutionalisation of the company and that simply means a company that will outlive all of us and to do that we need a strong foundation. We need rules, processes, people and we need to be very focused.”

The Custodian managing director stated that they spend a lot of time establishing systems and structures so that anybody that comes along will run the structure, adding “Yes they may say I am the founder of the company, but if I leave tomorrow or go anywhere, anybody that comes into that organisation runs the structure that is on ground. The key thing for us is not to lose shareholders funds and that is the underlining guideline. In not losing shareholders funds it means that to some extent there will be a bit of conservatism, insightfulness to everything that we are doing. Looking forward, we have our plans and our eyes on the top. So that is our own ambition, we want to lead the market not only in Nigeria but in Africa. We have a very big vision and we will execute it step by step.”

On why the company concentrates on corporate business, Oshin stated that the target market for his company is the most efficient market in terms of cost, adding “If you are talking about retail business, yes we are thinking of going retail but we have to go retail in a cost effective manner. The economy at the moment is not ready for broad based retail business because broad based retail business will actually depend on disposable income. Not only does it depend on disposable income, it also depends on availability of credits.”

He explained that retail business sits on the back of credits business, and if the banks are no longer lending, then retail business is crippled because abroad where they talk of retail business being very successful it is because everybody there is a debtor, nobody uses money to buy television set, car or do anything, so one is a debtor to a financial institution and therefore on the back of that the financial institution gets insurance.”

In his words “Here in Nigeria, we started that almost about four years ago when the banks were getting aggressive and throwing credit cards and debit cards at everybody and inviting people and calling you to come and take loans. If that tempo had continued, by now we will be sitting on a good structure to execute retail business. But all that has been withdrawn, banks are no longer lending, there is no disposable income anywhere, on what bank are you doing retail?

Oshin stressed that we must understand the business terrain since insurance is not a business that will be sold because business that is sold is never bought and that means that there must be some element of compulsion in it. “Very rarely do you find individuals just looking for insurance and asking ‘where can I buy insurance?’ you hardly get them. It is either you are a debtor or because what you have is so priced and if you lose it, you will be having some negative experiences or by fiat by law, you find that you have to do it. Those are the drivers.

On the Market Development and Restructuring Initiative (MDRI) of the National Insurance Commission (NAICOM), Oshin posited that it would have been better having an independent enforcement agency where some of the underwriters are not expected to do some enforcement.

In his words “I am not sure it is going to be very easy for you to go and put a gun on the head of a potential customer using the law to arm twist the person. It would have been easier to educate the person, and then have the regulators to come and enforce it.”