By Ikuomola Adebisi
Insurance, like other sub-sectors in the financial ecosystem, was birthed to create a mechanism where the burden of one person or a nation will be borne by another (the insurers) through payment of compensation upon the happening of the insured’s event subject to fulfilment of premium obligation by the customer. The insurance industry continues to play its invaluable role in sustaining businesses and nation’s wealth through risk-bearing and syndication. There is no doubt that insurance practice devolves on avowed principles which are germane to its continuity and business sustainability.
The insurance industry is faced with different kinds of risks. Risks are generally divided into two classes: Pure risks and speculative risks. Nonetheless, it should be noted that speculative risks are not insurable. On a broader spectrum, risks can also be evaluated on an economic scale, comparing static and dynamic risks. Examples of static risks are hurricane and other natural disasters whilst dynamic risks are inflation, recession and other business cycle changes.
The insurance sector is made up of companies that offer risk management functions in the form of insurance contracts. Globally, the players are almost the same which are Insurance Companies, Reinsurance Companies, Insurance Brokers, Insurance Agents, Loss Adjusters, Professional Marine Superintendents, Marine Surveyors and Insurance Consumers.
At the home front, there seems to be a similarity in the value chain with a responsive and responsible regulator, the National Insurance Commission (NAICOM), whose stride in sanitizing the industry is unequalled. The resurgence of technology in driving business across the globe also finds tents in the sector. The boom in the Generation X, outbreak of coronavirus pandemic and the imperative to showcase its innovativeness in product offering has engendered the need to continuously meet customers’ expectations back to back. Insurance players who stayed at the backwaters of the changing trends will be left on the lurch. Hence, it is more pertinent than ever before for the insurance stakeholders to synergise in leveraging on the opportunities offered by technology in driving sales and extending the frontiers of value creation roles. At the turn of the century, we would have birthed an insurance industry that is more resilient, fluid, customer-centric and where insurance products will be purchased within the precinct of individual homes at a go without physical contacts. It promises to be an exciting landscape for all.
Finally, the level of insurance awareness as at now needs to be rejigged through industry-wide sensitization, involvement in people-based community service, promotion of micro-insurance scheme to drive financial inclusion agenda of the government, offering of robust priced products with comfortable benefits to customers and exploring new ways to meet customers’ expectations. In this business, customers are the reasons for its existence and continuity. It is certainly not yet Uhuru.
Mr. Ikuomola Adebisi is the Executive Director, Technical at Anchor Insurance Company Limited