In this interview, Mr. Owolabi Salami, Executive Director of Ensure Insurance Plc speaks on the  need to have fewer and bigger insurance companies in the country. Excerpt.

WHY has prompt claims settlement continued to be an issue in the insurance sector?

We have over fifty insurance companies for a buying population of just 37 million people that we have identified. There used to be very low entry barriers for operators if we go back in history, but it is not a good thing for the industry.

•Owolabi Salami, Ensure Insurance

We need to shrink the number of players because fragmentation is one of the reasons why we have rate cutting issues and delay in settlement of claims.

There are so many fringe players who just need to book a premium in order for them to be able to have the cash flow to stay in business.

As long as there are so many of them, they will continue to play on the rates and we will continue to have rate issues.

How can companies deliver quality service to customers?

Because we have so many fringe players, some of them are not delivering the kind of service that leads to trust with the buying populace. Yet you have a situation where some companies are doing their very best to deliver value but there are so many fringe players that are not paying claims on time and this is leading to the halo effect of the negative perception in the insurance industry. The world is changing.

Technology is going to change the way we will do business and we need a lot of investment to keep up.

So we will end up in a situation whereby some of the fringe players will think about coalescing  or forced into a merger of some sort, so they can evolve into one big brand out of many.

Sterling Bank for example is an amalgamation of several banks that came together and they are surviving and they are doing very well.

I believe that if I am not writing five to six times the capital that I have in premiums, I should not really be looking to adding more capital to my business, rather I should be considering a merger.