Demystifying insurance myths through informal sector involvement

WHEN the Nigeria Insurance Commission (NAICOM) came up with restructuring mandate in the insurance sector some years ago, using the Market Development and Restructuring Initiative (MDRI), little did the regulatory body know that the multiplier effect would transcend the initial objectives.

The MDRI project focused essentially on the compulsory insurance products; sanitization and modernization of insurance agency system; wiping out of fake insurance institutions and introduction of risk-based supervision.

Beyond these, the insurance industry, through this project has witnessed phenomenal growth; earned people’s confidence, and above all, engendered stiff competition which has attracted foreign firms into the country.

Also, rather than the primary harvest ground provided by corporate organizations, players are looking inwards to tap from the informal sector of the economy- reaching the hitherto unreached.

The general outlook today in the industry is to up the ante, increase market share, increase the industry’s contribution to the nation’s Gross Domestic Product (GDP). Indeed, it may not be out of place to expect that, in no distant future, insurance will drive the economy just as the AIG Group in the United States of America that owns several other businesses such as banks.

One company that has keyed into the NAICOM vision is the Mutual Benefits Plc, with its drive to change the face of the industry through innovations, anchored on the firm conviction that insurance enhances financial intermediation, engenders entrepreneurial attitudes and encourages investment and market dynamism. Today, the target at Mutual Benefits is on the informal sector. The company has 102 products tailored to satisfy the middle and low income earners, using strategic alliances, cooperative cell.

Who will imagine that the cow dealer in the abattoir can subscribe to an insurance policy? But for Aminu Tanko Sadiq and some of his business associates, it is a reality. Sadiq is the General Secretary of the Butchers Stakeholders, Lagos State Abattoir Complex, Oko-Oba, Agege.

Today, he cuts the picture of a contented businessman knowing that his risk burden is on the shoulder of someone else. In an encounter with him at the abattoir, he lifts his head with a broad smile and points in the direction of the slaughters’ slab inside the complex for emphasis and says it’s a good time for the butchers.

Each time Sadiq speaks, he looks around for his colleagues and their livestock to accentuate his speech. “Look at that cow there, it is ready for insurance. The man over there on the slaughters’ slab is already hooked unto the plan. We are many already”, he says.

Sadiq talks with the confidence of someone who has seen the end from the beginning, but it’s just a little over six months since he came in contact with Mutual Benefits Assurance Plc, one of Nigeria’s prominent insurance companies.

“We’ve not had it like this since this abattoir was opened. In our line of business, at all times we need cash to go to the north to bring these animals. We wish we’ve had Mutual Benefits Assurance Plc with us from the beginning, because we’ve never had it so good. The benefits have been so wonderful.” he says.

A new livestock insurance programme is providing Sadiq and members of his butchers association a safety net for lost cattle. Six months ago, he signed up for insurance cover for his business, which is being offered by Mutual Benefits Assurance Plc.

The herdsman and butchers play significant role in Nigeria’s economy, where a growing population has increased the demand for healthier meat from regulated slaughterhouses. By its population and capacity for animal production, with more than 25 percent of livestock herds in the sub-region according to statistics, Nigeria is by far the leading livestock producer in Central and West Africa.

Another testimonial to the innovative product of the firm is a retired Air Force officer who is one of the franchisee of the company. After years of meritorious service as an officer of the Nigerian Air Force, Group Captain Richard Adebeso Okanlawon, retired pondering over his future outside the military.

For a man who spent 25 years of his service years taking care of the finance for the Nigerian Air Force, Okanlawon knew where to apply his skills in retirement, but a platform would be required.

Now, Mutual Benefits Assurance Plc has provided the former Assistant Director of Finance of the Nigerian Air Force with that much needed pedestal. Okanlawon has become a franchisee under its new product to create a better life for military personnel and other high network individuals in retirement.

For Okanlawon, what appeared somewhat like a simple past time activity in the beginning has become a pot of soup from which he now generates good income.

He said” I retired in December 2004 and I signed up to this in 2014 after I saw the adverts for the franchise. I decided to try it out since I am a trained accountant. Insurance is marketing, so I sell and make my commission. Again, insurance is the bedrock of any nation.

“If you must know, what propels the economy is insurance, so I call on people to join the race. For us here at Mutual Benefits, with just a small premium, you can secure your business instead of calling on government to bail you out anytime you run into problems like fire incidents and floods.”

He added: “Since I signed on to this, the journey has been a wonderful experience. As a retired person, if you don’t go out to interact, you will age quickly.

“As a retiree, I am fulfilled. During my service years, I served the nation as a military officer. By February next year, I will tell you that I am fit.

The franchisees are made up of a group of retired but not tired military, Bank Managing Directors and other corporate individuals, who by their wealth of experience are invaluable treasures.

Obviously, a fast growing company like this cannot but be recognized for its contribution to the industry. But this recognition came from an unexpected quarter in far away Tunis. On Tuesday, May 26, 2015, in Tunis, Mutual’s efforts in making insurance services relevant to everyday living was given a fillip when the company was adjudged Africa’s “Innovation Company of the Year”.

At the award ceremony, Mutual Benefits was commended for “the use of technology, breakthrough in products/service delivery and innovative distribution channels/methods, introduced in the sale of insurance products to the grassroots”.

Mutual’s Group Chief Executive, Akin Ogunbiyi, in an interview with The Guardian, was full of praises to the management and staff of the company, and particularly NAICOM, for its support and encouragement.

Ogunbiyi said: “We are grateful to God and our regulators, NAICOM. We can see that everybody is proud; the Nigerian Insurance Industry as a whole is proud that the maiden edition of such award came to us. The award was given by African Insurance Corporation under the auspices of African Insurance Organisation which is the umbrella body for the Insurance industry in the continent of Africa.

“For a Nigerian company to get that kind of award, it is a pride to the Nigerian Insurance market and of course, a pride to the National Insurance Commission. They have been so dynamic and given us a whole lot of support and understanding. They have encouraged us.

When asked if he saw the award coming, Ogunbiyi said the company did not expect it, but comments within Nigeria and outside the country showed that efforts at transforming the insurance landscape really paid off adding that what stood the company apart was that “We chose retail insurance to deepen insurance, increase insurance penetration and from the result we are getting, we decided to use insurance to create values within the various strata from Nigerian economy and within the various demographic group of the country.”

He stated further that “It is a good recognition for achievement and I know that even at National Insurance Commission, they are very happy. They refer to us as apostles of grassroots insurance. The award came, we are not surprised. We didn’t expect it especially from the angle it came from. And if you actually do a further analysis of the award, there are three maiden awards; we have the C.E.O of the year award, Insurance Company of the year award and the Most Innovative Insurance Company of the year award. Analyse those three awards, you will see actually the two are subset of what we got. For you to be the most innovative, you must have been the best insurance company, best C.E.O for that year. It is a challenge, success is a journey, it is not a destination. The achievement, recognition we got is dedicated to the Nigerian Insurance Market, NAICOM, and to the good team we have in Mutual Benefit who are striving day by day.