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Mutual Benefits is taking insurance to the grassroots – Ogunbiyi

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Insurance products and services have mostly been the exclusive preserve of the affluent, however in this interview, Group Managing Director of Mutual Benefits Assurance Plc, Mr. Akin Ogunbiyi, highlighted efforts the company is making to take insurance to the common man.

The insurance industry

Insurance anywhere in the world, especially in developed countries of the world, are actually tools for wealth and value creation and there is  really no growth or development that can actually come unless the insurance industry is strong, reliable and able to play the role as major mover of the economy.

The Nigerian economy today is a rent economy where everything depends on the federal government and the national budget. But if the national economy have to witness the growth and development it desires, the private sector has to be well mobilised through enabling environment, policies and programmes that will allow foreign direct investment to be channeled  to the right sector of  the economy.

For over 90 years since insurance came to the shores of Nigeria, the industry has not been able to issue up to one million individual policies whether motor, life or householder policy.

But mutual benefits in the last three years have been able to issue over 250,000 policies. We have 24 branches nationwide and the new goal of the company is ‘impacting development and growth of the Nigeria economy through creating dynamism, partnership and of course empowerment.’

Mutual Benefits mortgage scheme

Whether it’s for commercial purpose or for domestics use, we are giving mortgage at nine per cent and available terms. 10years is the maximum tenure but you can as well have it for lower than that period. We have had all kinds of offers from banks and we are saying no. if we are going to sell and realize all our profits today, it is actually going to affect our projections.

We are not Father Christmas who is interested in just expanding its coast; everything is tailored towards adding to the bottom-line. And the bottom-line is creating commercial risks that Mutual Benefits can take on. This is what you find with big companies like AIG, Allianz, and Old Mutual.  We have our challenges with this approach, but then again we want to commend the corporation and support we have got from the National Insurance Commission (NAICOM), for this various initiatives.

Mutual Microfinance Bank

Mutual Microfinance Bank is into micro insurance and we have devised products and services that Nigerian common people can actually buy. We have products as low as N50. Our products are affordable and it meets the needs of this class of people and of course we approached the micro insurance association of Nigeria.

We discussed our idea with them and how we can use insurance to create value and empower the people, but all our plea and presentations never saw the light of the day. That was how we approached NAICOM and made presentations to them as to the objectives we want to achieve using micro finance banks to drive micro insurance.

As God will have it they gave us the approval to invest in the bank. Today the bank alone has given us about 65,000 individual policies. These are N10, N5 policies which the insurance industry would never have captured as premium. But we are very happy the micro finance bank is doing very well.

It is through this we have been able to actually meet the objective of creating value and empowering the masses. It is a success story today in Lagos state. I remember that sometime ago we approached a group of people selling jotters. They agreed to deal with us and we put them in cooperative units.

We empowered as well as encouraged them. Today they are accessing up to 10 million naira from the micro finance bank and they are paying back. The same applies to those selling textbooks and pure water. This is what we have done to use insurance to create value.

Transport scheme

We are almost the last man standing now when it comes to involvement in transportation of private sector in Lagos state. However, that scheme alone employed about 1200 graduates which is exactly what we want insurance to do, that is, create value and empower people. Each bus has four staff and they have shifts.

Some work from 5.30am in the morning to 2.00pm while others from 2.00pm to 10.00pm. There is something we call ACHAN, which is, Airport Car Hire Association of Nigeria. When you see those Camry cars in all the functional airports in Nigeria, Mutual Benefits has over 400 of them.

For every empowerment that we did, insurance was attached to it. For the Camry cars, we are taking group life insurance on the association. If not for our initiative, such premium wouldn’t have come to the industry. Again for the cars, many of them would have opted for third party insurance, but we made it part of the package that they have to do comprehensive insurance.

The fact is that the association didn’t just come to us; we went to them to educate them on the benefits they can get. That was when the federal government said for you to operate car hire at the airport, you must use a particular type of car. Imagine that there is no Mutual Benefits that can think outside the box, all those people would have been disengaged and become unemployed.

Also, we have about 250 different National Union of Road Transport Workers associations in Lagos and we are working with all of them.  And because they cannot afford new cars, we again came to their level. We empowered them with fairly used cars. And the beautiful aspect of this all is that the informal sector being the symbol of integrity, has not default in payment. We also have the Erewole scheme which is an interstate transport scheme.

We have commissioned a new scheme called Ekiti Kete under fountain holdings. We just gave them brand new buses to start. And when you see ‘powered by Mutual Benefits,’ it is insurance working. They can’t access these monies from banks, if they are able to access some banks, interest or any other thing will kill them. But whichever ways we are able achieve it, we are actually enjoying it.

Empowerment in the north

The general notion is that insurance can’t sell in the north because northerners don’t buy insurance. So we asked ourselves, ‘how do we reach out to them.’ We penetrated the north through empowerment. We approached them through Nigeria Union of Teachers, (NUT).

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