Chairman of the Nigeria Insurers Association, NIA, Mr Ganiyu Musa engages Media men during the Questions and Answers section on development issues troubling the industry and by extension the country as well. Musa who doubles as the Managing Director of Cornerstone Insurance talks about the group life, the #EndSars and a lot about industry growth and association disciplinary measures on members. Also Chairman of Council of Bureaux, ECOWAS Brown Card Insurance Scheme says the industry can understand the constraints of State Government which is why they first to them on complusory motor insurance before other ones, among others
Excerpts
Why is the health insurance claims not coming a year after?
Yes, no claim was paid, not because the industry doesn’t want to pay, but no claim was notified to the lead underwriter. They have the policy document, and the criteria and the rest. I think the lead underwriter is on the policy document. If any claim was notified, settlement would have been prompt. The issue with life policy is very straight forward; it is not like other classes that requires extensive documentation and adjustment. The basic documentation to support a death claim is very simple and straight forward. So, it saddens us also as an industry that really we didn’t have the opportunity to leverage on that gesture, and I am not sure it is too late. I don’t know what the notification period is in the policy.
So, it is not anything to do with the industry. So, we are waiting, and as soon as we have a notice on valid claim, that will be attended to.
We have been engaging the regulator because they are aware; we talked about this because they are the arm of the government that is providing the interface to the industry. I hope they will take it up being that arm of the government.
How long will it take for Consolidate Insurance Bill to be concluded?
In terms of the Consolidated Insurance Bill, left for us we would have wanted this bill concluded yesterday unfortunately, what we were made to understand is that law making is very cumbersome and very technical especially when it is a commercial law of this nature. When they called for the public hearing, I recalled that they have a list of up to 40 different stakeholders group. So, it is not just to take the views of NAICOM NIA and the rest.
In my understanding, after the public hearing, they retired into the technical sessions where line by line, they would look at the observations of all the stakeholders and they have a technical committee that will reconcile if there are differences or discrepancies before they now come up with the complete set of document that will be sent to the floor of the House.
From when we started the process, initially, we thought that by June, it would have gone through the legislative parts and we would just be waiting for the bill to be passed by the Executive, but unfortunately, that is where we are and whatever we say now is a statement of hope and expectation rather than knowledge because the whole process is outside our control to a large extent. We have been doing a lot to push, and to be honest, the DG has been on it, meeting with all the relevant stakeholders. So, we are quite eager, and I believe that the media houses, put a lot of search lights on the bill and the process, that can also bring back the sense of urgency to the legislators to move it forward. So, you can actually help us in this regard.
How prepared is the industry for the 47th AIO?
Let me start with the AIO: it will hold from 4th-8th of September, and it is going to be hybrid. Attendance for most of us will be in-country, and the executives of AIO will be physically on the ground. Limited numbers from outside of the country and the rest of the continent will be using virtual platform.
In terms of the physical preparation, recall that we had everything locked down when COVID -19 started, and we did everything practically possible, and thought we could hold it in May; we secured the facility at Eko Hotel, and we paid the deposit; so, we didn’t fully de-commissioned all those, we just reconstituted the Local Organizing Committee that is currently chaired by the Vice-Chair person of the Association. So, I can assure you that we are good to go.
Of course, a number of arrangements that we had made before has to change because of the change. Initially, it was supposed to be physical, we now have to engage virtual conference provides and like they said that “necessity is the mother of invention”. So, we are good to go, and very soon, the LOC will have a discussion with your group to give you an update of what has been done and what is left to be done.
How much claims have insurance companies incurred for #EndSars protest?
ENDSARS: I am not sure we can get those details because insurance is contractual and it is personal. Even when we pay a claim, unless we have approval from the insured, we can not divulge the fact that we have paid so much to this particular person. Within that we can talk about aggregate. Like I said we had 1,652 claims notified, and we paid N4.5 billion, but as for how much we have paid to a specific individual, we would not be able to say, because they can sue us; it go against Customers confidentiality.
What impact will punishing erring members have on the industry?
Yes, quarter one is gone, and it takes grace for all the reporting entities to submit especially the ones that are not listed, but based on the ones that are reported so far, I think quarter one was quite successful. just like 2020 when we had our worst fears, but from the numbers that have come in from our members, the industry actually grew by a decent number. We have seen operators report double-digit growths in a year we are all scared that the level of activities would go done.
The insurance circle is usually 18 months behind the economic circle, so it might be that by the time the pandemic struck on our own shore, our biggest renewal periods in the Nigeria market is January renewal, and January had been concluded then, and it might be that it will take another circle before we see the real impact. If January 2021 is anything to go by, I think we have actually recorded a decent growth level in quarter one.
To answer your question on the impact of the suspension of members, you are right; we are also asking the same question. The point is, if you belong to an association that is prestigious like the NIA, and you are suddenly kicked out of the Association, that was insured with you, I would be asking you a lot of questions. It is that sort of pressure that we are trying to exert on the members to see that really that benefits of belonging to an association like the NIA, even if it voluntary, that is why you have that stamp you put on your policies and on your letter-head and the rest, and if you are losing that badge we believe it should be enough pressure for you to want to do the right thing.
And also, it should be a queue for the regulator because if a voluntary association has taken this step, then you have a regulator that actually has the powers to compel them to do things, and for you also as an insured, it strengthens your case, for instance, if you need to go to the regulator or to go to court; so you need to look at all those dimensions, and if in the face of all these threats, if they don’t behave well, it means that they don’t deserve to be in the industry.
Yes, we don’t have enforcement capability but these pressure points will compel the entities concerned to do the right things, and if you don’t, there could be significant consequences and I can assure you that those ones that are facing suspension, are not taking it lightly; they are running up and down, trying to do things right, which means that the suspension is working
What is NIA to ensure all States comply with group life policy?
Starting with the question on Group Life for government, I think you somehow answered the question with your next question. The truth is, a number of the states in the federation right now are not viable. You can imagine where some of them are reputed to owe several months of salaries. They are not paying salaries, and so the last thing that you talk to them about is group life, which is supposed to be generated from the salaries. The salaries are not being paid. Unfortunately, even for organized labour, this is the sort of thing that they should be fighting for because we know bad things happen to good people, at times. The surest thing, at least, if you love your family or your beneficiaries, you should be interested in what happens to them when you are not there, but their fight is always on other issues. We recognized the constraint of the states government, and that is why our first approach is on the issue of the Compulsory Third-Party. The premium is not coming from the states government, but from the insured, so it is easier to have access to renew your vehicle license. The law says you should have a third-party; we have not given up, we are still engaging but the reality is that where there is no money, there is nothing you can do even with the best of intentions.
For Head of Service, HoS, this year, am aware there is a conversation going on regarding the renewal and the provision of data. I am sure the NIA Director-General, DG can provide the latest of the data, but I am not sure it has been concluded. There’s been series of meetings with the office of the Head of Service, HoS; the Life Offices Committee, and the regulator- NAICOM. So, we are hoping that any moment from now, that would be concluded and the cover reinstated for the federal employees.
Yes, the situation in the country is extremely serious, and even though you have anchored the question on the economic situation but beyond that, you have the major insecurity situations which are significant in economic implications. We are faced today with food insecurity, the country is threatened because the farmers can’t farm, and when you farm, you can’t take your product from the farm to where it is needed, and that’s what I was trying to reference. At times, the insurance circle could be 18 months behind the economic circles, and the exchange rate is driving down the interest rates, and today we all depend on investments income to augment our profits and when the investment incomes go down, you know what the results would be. And of course, the government is still a major participant in the economic activities of the country. So, it is a pathetic situation and the full impacts will begin to show up if things don’t change in the next few months or so.
Why are insurance companies don’t ensure their presence are felt at licensing offices?
On the issue of the weak insurance companies, we all agreed in the association that individual companies should disengage from the licensing offices, so, I would be surprised if you see any of the staff of the companies. Apparently, certificates may have been dumped with them, and at times, a number of those certificates have been forged by criminal elements operating in the licensing offices. So, the reason is not far- fetched.
As an association, we took a decision that for the third-party policy that is compulsory, nobody should undercut. So, a number of those certificates you see at the licensing offices are faked and no premium has been charged or paid. So, the weak ones don’t care; they need to live from day to day as out of the N5000, even if it is N2000 you give them per policy, they will take it. And that’s why you have the problems – they will never pay claims.
That is what the portal is meant to address. And all of us would have to work together, and again, we really rely on helps from you to spread the message. Even though the portal is online, as an underwriter, when you issue a physical policy, immediately, within a few minutes, you are to upload it on the platform; so it is not only when it is purchased online.
And when they give you the certificate, immediately you can check, using that USSD code to see if that policy is genuine or not. If it is not genuine, you can confront the person that gave it to you, and said: “You collected my N5, 000, and you gave me a fake policy.”
Of course, if you move a few meters and you are stopped by the police, they are going to do the same thing, and see that the policy is fake. So, it’s all tied to the issue of the awareness that we talked about.
The platform is there, and it caters to both online purchases and offline purchases. Of course, most of our underwriters have already integrated the platform into their own applications such that the moment you issue a policy, you instantaneously load on the portal, it is updated and it becomes visible to all the security agencies, so it is not only limited to the online version. What is required is the awareness for people to know about it, and why is difficult to stop the people at the licensing office is that the greatest pressure can come from the insured if you go here to renew your license and they collected N5000 from you; you can go back to them and say what you have given me is not genuine; that way, the process of change can start little by little.
Thank you very much for prompting us to make it happen; also my other friends in the house, I thank you all for coming/ of course, my coming into office as NIA chairman happened in the middle of the first wave of COVID-19.
So, that really defined and disrupted a number of things-the usual, so, with the global pandemic, it was not possible for us to have the usual inaugural engagement.
We have to do it exclusively online. And the whole world has been grappling with the aftermath of the pandemic. Yes, we thank God were lucky in the country that the worst fears have not played out, but that is not to say that we are totally out of the wood.
We are currently witnessing what is going on in India, where the deadly second wave has practically crippled the country. So, that basically, I would say, made it very difficult for us to put together the usual interaction together. It was certainly not because we didn’t want to or that we didn’t have sufficient regard or respect for the group or the association. So, it was more circumstantial; so accept our apologies for that.
It’s been an incredible experience for me, I should say; it felt like I had been on it for ten years, because things happened with frenetic speed, even though we had a very clear-cut road map.
The beauty about the leadership structure at the NIA is that there is a lot of continuity. If I take myself as an example, I served as an assistant treasurer, then I served as a treasurer, and I served for two years as a vice chairman, so, I was part and parcel of the leadership before I took over as the chairman. I remembered clearly in 2017, the leadership of the NIA crafted together what we called the road map for the industry. We worked with the KPMG and we identified the critical levers to work on to ensure that we achieve the lofty objectives that we have set for the insurance industry.
One of those levers that we identified is recapitalization even before the conversation with the regulator, so we knew a well strong capitalized industry was necessary for the sort of growth ambition that we had.
Again, we had our own sight on re capitalization based on best practice by working with accountants, actuaries, etc. I am saying this because it is one of the most topical issues we have been dealing with.
As an industry, we fully support the proper recapitalization of the operators. It is part and parcel of our own agenda, and it should be done in line with best practices. An interesting thing is that we actually did not disagree with the regulator contrary to impressions that may have been created. The main issue which is the problem is the fact that the current insurance legislation is outdated and it made it impossible to do the sort of things that ought to be done even the proper definition of capital.
That now takes me to the second items we have been working on for the seven to eight months now. We have been working with the National Assembly to modernize the primary insurance legislation. You are aware of the development with the consolidated insurance Bill; again we are working with NAICOM to ensure that the final law that comes out provides the basis for our legislation to be able to respond to the legislative environment of the 21st century.
And because we have had a number of engagements with the regulator, we have come to understand that the constraints that they actually have is the law, which we are now working together to remove the bottlenecks.
You are aware that it has gone through the second readings, and we have had Public Hearing on it, and it is now going through…you knows, the process of law-making is very cumbersome. Apart from the regulator, lost adjusters and the brokers, there are a number of other stakeholders that came in to make their own presentations. Now, they are going through the process of reconciling all the positions, and hopefully, it will be able to get to the floor of the National Assembly.
We also witnesses to the event of October, last year, in terms of the #ENDSARS riots and the unfortunate things that happened. It led to significant disruptions of social, economic activities and the loss of lives.
Of course, when things like that happened, insurance is at the center , both left and right, and as a result, we had quite a number of insured businesses that were affected. I think, at the last count, we had 2,000 notifications of insured loss which some of it are currently going through adjustments, documentations.
At the last submissions that we had from our members, we had over N4.5 billion as compensations on accounts of the claims that have been completed and documented and discharged.
Of course, as those cases are completed, we have the commitment of our members that payments will be made timely. The experience we had is that unscrupulous people try to use the opportunity to try to defraud the insurance industry. We are also dealing with that, and luckily, we have a mechanism in place to be able to filter those submissions and determine the ones that are inappropriate.
As a result, it is difficult for motorists with fake certificates to get away with fake certificate when they are pulled over by a policeman or a federal road safety corps, using an ordinary phone that USSD code can return the status of the insurance certificate that you are carrying and even when you are not carrying any insurance certificate at all.
Following the success with that, we also extend it to the Marine Model. Again, that is one area where we‘ve had a lot of leakages, and we are working with the Nigerian Customs Service, and the Central Bank of Nigeria; we have now gone live with the NIA Marine Model which is fully integrated with the national trade portal and all the banks now, before they issue their FORM …, they can validate whether the Marine Certificate that the importer is presenting is actually genuine certificate or something that is faked.
Also, one other project that we have been working on is the AIO 2020. The last time it was held is in Johannesburg, South Africa in 2019, where the Federal Republic of Nigeria was granted the hosting right for what was to be the 2020 AIO.
As you know, it usually take place in May , but unfortunately, because of the pandemic and the travel restrictions, and the fact that international travel was practically grounded brought complete halt and it could not hold last year. Of course, we have remain in constant contacts with the AIO Secretariat in Cameroon, and right now, what we have agreed with the Secretariat is to hold it in the first week of September, 2021. Again, we hope that much more progress would have been made with the efforts at tackling the COVID, and international travel would have resume fully, we have seen what it is, we have seen the development in vaccinations even India, the largest COVID -19 vaccines manufacturers in the world, we have seen what they are going through, so, we have agreed with the AIO Secretariat it is a hybrid programme that will hold from 4th-8th September 2021
So, we will continue to solicit your full support in giving our guests the most exciting Nigerian experience as we seek to showcase the best of Nigeria.
Of course, one issue that we have been trying to address is fake motor certificates. As you all know, maybe out of 14 million or 18 million motor vehicles we have in the country, only a fraction of that actually carries genuine insurance policies.
The industry actually made efforts to authenticate policies issues by member companies and we have collaborated with security agencies- police, road safety and the rest such that they now have access to verify on the spot the genuineness of your insurance certificate, and it’s been a very successful project and at the last count, we have covered more than a million of those 14 million vehicles, and it is becoming more difficult for motorists to get away with fake certificate when they are pulled over by a policeman or a federal road safety corps, using an ordinary phone that USSD code can return the status of the insurance certificate that you are carrying and even when you are not carrying any insurance certificate at all.
We have also carried the message of compulsory insurance to the state governments. We are working with the Lagos State government in implementing the Lagos State Building Law; we have had several meetings with them and we are working on the modalities, we are learning from the mistakes of the past, and we are sure what we are presenting now is a unified front for the industry rather than what we had before where an operator went in with disparate codes and approaches that used to be the breeding ground for all sorts of bad things we all complained about in the industry.
The same thing on the Third –Part Motors, we are working with the states government and I think we have already concluded with three or four states including Kaduna, Kogi and Ogun State, to formalize the issuance of proper Third- Party Insurance policies as a prerequisite for vehicles registration, and we are using this as a test case and proof of concepts , and our plans is to extend that to all the states of the federation.
Clearly, there are things that we are trying to do to develop the market and to ensure that more importantly, the issue of motorists and the liability for third-parties; we try to modernize that; so hopefully, as much as we get the nods of the states, that code actually provides a solid platform. You can imagine, even if it is 50 percent of the 18 million vehicles that we have in the country that we are able to bring into the insurance space, the confidence of the insuring public will improve and it will also have a spin of effects on the other areas of insurance.
Of course, as you know, I am also the Chairman of the Council of Bureau for the ECOWAS Brown Cards, which basically provides cover for ECOWAS risks for the Nigerian motorists. Again, the major obstacles that we have been trying to de-bottle neck, is the issue of legislation. We have made the provisions in the proposal in the current Consolidated Insurance Bill that is being review and being passed by the legislators.
When that is completed, the very embarrassing situations that motorists experience when they travel across the border to Benin, Lome, to Ghana, will become a thing of the past, because it will now be standardized and it will now be automatic such that the moment you buy your third-party policies in Nigeria. You really don’t need to buy an additional ECOWAS risks if you need to travel across the border, you are already covered. That is the key project we are working on in terms of Nigeria National Bureau, and the ECOWAS Brown Card.
Of course, in terms of the physical infrastructure, where we are now is a temporary facility and hopefully, maybe at our next meeting, we will be in our branded NIA House which we expect to be completed in the quarter three of quarter four of this year, in Victoria Island. As you all know, the NIA Secretariat at Saka Tinubu street have been turned into a modern befitting facility, and of course, you all will be part of the opening ceremony when it happen.
One area which we have also devoted our attention over time, is confidence building and the perception of our members. We have concluded that one of the critical dependence is the fact that as insurers, we have to live up to our expectation – our primary responsibility, and what is our primary obligation? It is to pay claims.
So, we are focusing a lot of attention now on discipline among our members. We have an active committee on Discipline and Dispute resolution. That committee has been strengthened and empowered, and we now go beyond just the usual referee, or the usual chastisement, to actually taking active steps to discipline erring members.
As we speak, we have a few of our members that have been suspended, and some are already on the verge of expulsion and in a few weeks when the whole process is completed, we will come to you with the full outcome of what we have done. I think it is important to send a message to the public that when you carry the NIA badge, you count for something.
There is no amount of marketing that you can do if the experience of the insuring public, probably the only time that they interact or test our service is when there is a claim. So, we focus a lot on that, and we are holding our members accountable, and it is a subject that we discuss every month when we hold our Governing Council meeting.
We believe it’s an important step, and once we do that and we do the internal house –cleaning, then, we can go back to the public awareness programme that we started sometimes ago because we believe you can’t go to the public and say all the good things that you are able to do when you still have internal issues that tends to undermines those efforts.
In short, these are some of the things that have kept us busy in the last seven to eight months, and I would say it would define the remainder of the term.
Like I said because of the structure of the leadership process, NIA is a continuum, so there is really; we have a project- the NIA Building project was started two to three years ago. The strategic plans that we are following now was developed in 2017. So, it is a guiding document for whoever comes in, even though you have a number of strategic initiatives, this will falls into certain aspects at a particular point in time. For instance, we didn’t envisage the issue of recapitalization, a ten years (2017-2027), and the review of the law provided for in our document; it was going to come after every other thing has been put in place
