By ROSEMARY ONUOHA
Mr. Annur Sekar is the Chairman and Managing Director of New India Assurance Co Ltd. In this interview with Vanguard, he opines that the Nigerian government must take concrete steps to enhance the welfare of people below poverty line. Excerpts:
Government and insurance
We can compare India with Nigeria. In India in the last few years it is the health insurance products which are actually making waves and selling very fast. Just about six years back health insurance was about six per cent of domestic market today it is about 24 per cent and going good. We are estimating that in four years time the health insurance premium would be like 30 per cent of the total insurance market premium.
It is only about nine per cent of the Indian population who have one or another kind of health insurance and am sure that here there may not be many people who have health insurance. So that is one area we should be looking at. There are many Middle Eastern markets where in the last five years the health insurance has become very popular and they are selling at a very fast pace. So here also the same thing can be done. In fact in our own country the government of India has come out with a mass product.
Under that scheme the below poverty line families are given free insurance policy by the government of India. So the Central Government put in 75 per cent of the premium while 25 per cent is being put by the state governments. The policy holder has to pay something like 30 rupees to make an identity card which the policy holder can use to get to the designated medical centres both in the private and public sectors.
So the policy holder goes to the hospital with the ID card, which is swiped then the balance is known and the hospital gives the treatment and it is stored in the card. So the policy holder doesn’t have to pay anything for the medical services that they get.
This scheme is being implemented by the insurance companies throughout India. So something like that can be part of this market also. Some countries have come up with compulsory health insurance schemes aside from the insurance regulator there is health regulator separately.
In Saudi Arabia and Dubai there is a compulsory health insurance scheme especially for the people of lower level below a particular level of income. Going forward, I think that will be a big market in Nigeria. Health insurance really needs to be given priority. It is one of the social responsibilities of the government along with the insurance companies.
The market penetration is still very small. The biggest challenge for us is how to cover more people at less cost and at a cost which can be affordable by the market.
So the biggest challenge for us is ‘how do we cover the bigger population at an economic cost.’ We have to develop new products and it is a very competitive market. The non life insurance market by nature is a very competitive market and very short term in nature because the policies generally exist for only twelve months. So sustaining the trust of the people especially those people who pay their premium, but don’t get any claim is a challenge. How do we get them to renew their policies again in large number?
These are our biggest challenge. In the Indian market we have competition and it is this competition that is helping us develop more products, create better delivery systems, as well as utilising the electronic mode of dealing with the customers. Non life insurance is a low ticket business. The products are priced low. So the challenges are there. First of all you need distribution channel which is sustainable to reach the masses. So that is a big challenge in India and it could be a challenge here in this country.
New India came into Nigeria 60 years back and it was operating as a branch of New India Mumbai, and sometime when there were regulatory changes and foreign companies were not allowed in Nigeria we had to form a local company. In 1970 Prestige Assurance was formed with the help of local investors and New India took up 40 per cent of the total capital declared and Prestige Assurance took up the job of New India.
Subsequently, in 2003, New India’s commitment to this market was again proved when we increased our stake from 40 to 51 per cent which in itself is indicative of the commitment of the New India Assurance and also the attractiveness of this market. So over this period there could have been short term losses and gains but our commitment to Nigeria is forever.
We take the ownership responsibility of running this company in proper line. I don’t see any reason for our investment to be reduced because of any changes in the market. We do feel that we can do better than what we have done in the recent past and we will try to improve on our performance maybe expand our branch network, recruit more people, improve on Prestige products in the market to make it almost at par with New India that is seen the world over.