Mr. Mayowa Adeduru is the Managing Director/Chief Executive Officer of Anchor Insurance Company Limited. In this interview with EDET UDOH, he spoke on the importance of insurance to any economy and the need for government to provide necessary incentives to encourage insurance acceptability in the country among other issues. Excerpts:
I started my career in 1995 with African General Insurance Brokers; I left in 1996 to join Continental Reinsurance where I worked for five years before I moved to Anchor Insurance Desk in a bank which is now part of United Bank of Africa (UBA). It was called Liberty Bank Plc as at then. I left there in 2003 to join Standard Alliance where I worked for another six years before I joined Anchor Insurance Company Limited as the Managing Director/Chief Executive Officer since 2008. So, I have been practicing insurance, risk management and cost management for over 20 years.
Insurance market in Nigeria
Insurance is an evolving sector and we have our area of disappointment. Nonetheless, the industry has grown and is still growing. At a time, it became very wealthy and that was before 2003 recapitalisation and after that we had 2007 recapitalisation. To me, I always look at what is happening in other countries, in their insurance sector and what are we missing in Nigerian insurance sector.
The regulatory environment is robust here but we need more policy incentives to make sure that the culture dovetails so that as much as we have the cultural settings of how Africans insure themselves – the ‘esusu’, ‘age grade meeting’ and ‘town meetings’ where they contribute money. There are forms of insurance but the real modern world form of insurance we borrowed from the Western World, the Europeans, and the Americans. We need a set of policy incentives.
Lack of adequate incentive
Yes, the policy is not robust enough. If you go on the street you see people hit by motorcycles; you see vehicles rolling into each other; you see houses collapsing; nobody is asking have you received compensation? Nobody is asking where is your insurance? You dare not drive a car recklessly in the road in United Kingdom; they will crush your car, they will turn it into pieces and without insurance you cannot take it.
The reason why we insure aircrafts in Nigeria is because most of the aircrafts are not based in Nigeria; the funding of those aircrafts are not in Nigeria; if they had been in Nigeria, there would not be insured and because the owner of the aircrafts will not allow them to operate the aircrafts without the proper insurance. That is why once they come here, they are grounded.
We need insurance and government needs to provide the necessary policy incentive to encourage insurance. Insurance is a social security; is a social support to the economy; the long-term investment fund that the government is crying for is in insurance sector. For instance, it is difficult for government to go and touch pension fund but if insurance fund, it is easy for us to plough this fund back into infrastructure development; everything need insurance including the road, there is no reason why we should drive on bad roads. We should get contractor maintaining these roads; contractor constructing these roads that have insurance so that if they get paid and if the roads fail before the guaranteed period, you call on the insurance company. If they refuse to maintain the road, you call on insurance. So, I am very passionate about insurance because that is the greatest thing that is missing in our economy.
How favourable have the policies been so far?
You know, you can put all policies of this world; you can have a blue print, the red page, the direct page, the white paper, but if you fail to implement these things they are useless as no policy. So, that is the area we are. We have six compulsory insurances – Insurance of Public Building, Insurance of Vehicles on the road, Insurance of Liability of Doctors, Nurses, Professionals among others that are compulsory but go and ask any doctor who is practicing whether they have valid insurance to practice for professional negligence; ask an accountant who a practicing accountant whether he has professional indemnity insurance – these things are not there and nobody is looking into it.
So not for insurance companies to start running the street begging, we are not going to stop to offer customer service but the incentive to police to ensure enforcement of these policies must be there. If it is avoidable for you not to pay tax, you will be avoiding paying your tax. Is that not correct? Because you save the money in your pocket but the tax money is going to hang you.
The beauty of insurance
But where we are now, we are talking of something good. You could imagine the joy of somebody who lost his job in Skye Bank of recent and grudgingly has taken Loss of Employment Insurance with Anchor Insurance and he realized that he has this policy and he has been coming here to pick his cheque and he will be picking this cheque for the next two years. Tell me what has that done to him? It has saved him the risk of committing suicide for the loss of job. It has ensured he pays is children’s school fees. It has ensured that the Landlord will not throw him out. It has ensured that the mother he has been supporting, he will keep on supporting them in the next two years and in that period of two years, he can even change his profession – he can learn another trade. He can do so many other things. That is the beauty of insurance – It is the succour. It is the backbone. It is the economy social support that government should encourage to reduce tension in the society.
Government must improve in their insurance obligation
I think they are improving but if you want to put it in a scale of percentage you will probably give them 25 percent. So, is that a pass mark? No! And that 25 percent is a generous mark. You see negligence even on the part of government. You see collapse; you see unprofessionalism on the side of government. How can government rush to the market and say I will compensate you? That is not necessary. Why should the government say we are promising we are going to rebuild this market and two years, three years, five years down the line the market is not built. These are things insurance can take care of.
Lack of serving culture
It is the thing government has created. For instance, we have the Ministry of Finance and we have the National Insurance Commission (NAICOM) under the purview of the government but the insurance law is under the concurrent list. Therefore, if Federal Government is doing something it cannot force the state to do it. There is a need that government should galvanize enforcement, implementation knowing full well the benefit to the sector.
For example, in some of the ministries they have insurance as a sub-head in their budget but the least item to be implemented in the implementation of the budget. So these are the challenges we have. For example, to what extent is the voice of those who are in the regulation important to the implementation of national budget? So when they are meeting to discuss on the issue of the economy to what importance is insurance? Are they discussing about how do we mobilize funds? How do we mobilize savings? Because the impact of what we are having today is because we are not building saving culture into our economy. If that is the case it means that we are suffering from our action or inaction.
The gab Anchor fills
Anchor was established in 1989 that is probably about 27 years now. It was established as a credit firm by Akwa Ibom State Government but over time, Anchor has evolved to be a national player, moving to about 24 locations as of today. It is the company that we took over at an income base of less than N400 million. Today anchor is talking of a gross premium in excess of N2.4 billion. Over time Anchor has come to fill the gap and what we are doing in Anchor today is something that is novel, unique, is something that is creative because we are looking at insurance adapting it into the present situation of things.
Some people detest insurance because, may be, if you want to renew your license, you see a group of touts parading themselves as insurance agents, trying to sell insurance to you. But in Anchor, we don’t do that. You don’t need to do like tout, so we empowered those guys and we developed insurance into a recharge card format using technology. So we’ve been able to use the technology to deliver motor insurance service to policy holders and we have provided a lot of succour to victims. People are amazed at times and say you mean this N5000 I pay will earn me a claim of over a million naira. I told them yes. That is the beauty of insurance. That is how insurance works.