Insurers must spread to more areas –Ogunbiyi

The Group Managing Director, Mutual Benefits Assurance Plc, Dr. Akin Ogunbiyi, speaks about how accessibility of insurance products can support the sector’s development, in this interview with NIKE POPOOLA

Is poor awareness the biggest challenge facing the insurance industry today?

The challenge of insurance today is not the perception of insurance but accessibility and availability of insurance. Most okada riders in any locality know that the Police will ask for third party insurance, but most of them have fake insurance. Why will they not buy fake insurance? Go to the core North and even in most places in the Southwest, how many insurance companies have branches there? Go to some rural areas, what is the means of transportation there? If you are not accessible and available, they will go for fake insurance. Of course, they will use the fake paper for the Police to let them go. What we are saying is that if insurance is to take its rightful position in Nigeria as is the case in other climes, we need to spread out.

I always say insurance has become too elitist. If truly we want to grow and be relevant, we need to move out. The National Insurance Commission has taken the initiative by giving us the Market Development and Restructuring Initiative and we all need to take insurance to the grass roots. I am always eager to give this example: in Iwo, we got two marine policies. Iwo is a rural location. When we opened the branch in Iwo, we sold two marine policies. Where were they getting their marine certificates before? How were they clearing their vehicles and doing their importation? If there was no branch of Mutual Benefits in Iwo, those who purchased those marine certificates will go to fake people and they will still purchase them. So, this is the challenge that we need to rise up to.

The Federal Government plans to make title insurance a requirement for getting mortgage loans. How will this boost businessin the sector?

Those opportunities have always been there, but they were not maximised. Why do you think insurance in other climes are developed? It is because you cannot do anything without anybody asking you for insurance. Unfortunately, the rule of law in this country has not yet got to that level. How can you go and get mortgage loan without insurance? If somebody drops dead today, they will throw his family out of the house and repossess it. Those provisions have always been there, but the industry needs to be proactive to enforce them and provide this cover.

We just invested about N7bn in real estate at Mutual Benefits. We work with a mortgage bank and we give out the houses to people on mortgage to be repaid in 10 years. From this initiative, we also get other businesses because we provide household insurance, mortgage insurance and even partner on life insurance.

I am happy that they are coming up with mortgage insurance, but the rule of law needs to be implemented. Which other agencies are complementing insurance to ensure that this cover is ensured? Most of the cars on our roads carry wrong insurance except those on hire purchase that the owner of the money will insist on insurance. So, we need the complement of all stakeholders to take insurance to the next level.

But we, at Mutual Benefits, are resolved to keep on working on closing the insurance gap and work with big insurance bodies to open up the market.

What opportunities are open to unemployed graduates in the insurance agency system?

It depends on the individual and what he wants in life. There are a lot of graduates out there looking for paid employment, which is not there. This is why we came up with the graduate training scheme. It doesn’t matter what course you studied. It is good to go to school; your education increases your maturity and perception of ideas. Use your knowledge to acquire skills.

About 7,000 of our sales agents are graduates who we have taken off the road. Every month, we do massive recruitment. When many of them come, they don’t see any future but we always encourage them to give it a trial. I have signed N1.3m as single commission to an individual this month.

Our value system for the young graduates needs to change; everybody is looking for instant wealth. Unless you go through stages, anything will be false foundation.

When I was very young and working, I had just two trousers and two shirts, which were fairly used, but I was always neat and presentable. If I did not tell you, you will not know. But our guys today, whose fathers cannot give them N1,000 a month, are putting something expensive on. We need to learn that it is through work that people can earn legitimate income; people should learn to live within their income. They will get there.

What values helped Mutual Benefits to emerge as the most innovative underwriter on the continent at the African Insurers Organisation’s summit?

I want to thank God almighty who has remained faithful and has given us the strength and enablement. The development of Mutual Benefits and where we are today is a function of the vision of the founding fathers. We want to build an institution, not just run an insurance company. And if you say you want to build an institution, you know it is the institution that actually endures; it is not the person or the people. With that clear vision that we have, we put a structure in place to be able to have what an institution should be. When you look at the blueprint that we had, we all agreed that we can come in together as individuals.

If we want to build an institution, what are the parameters that make it enduring? The very first thing is we must have a very professional insurance outfit, we must have a good structure in place and we must put ethics and professionalism as the core. So, if you look at the core values of Mutual Benefits, you will see that there are things that you can find in any top institution in the world. Instead of benchmarking ourselves with the local parameters of building an institution, we actually benchmarked ourselves with the international standard of running an organisation that is built to last.

We look at the core values: continuous development, leadership, professionalism and ethical practice. These are core values that you find in institutions that have endured the world over. We had a long-term vision of building an institution. We don’t want to build an institution over 100 years because nobody is going to last a hundred years; but what we normally do is we have what we call our strategic vision for every five years.

How have you been able to implement the vision every five years?

In the first five years of existence of Mutual Benefits, we started out with a paid up capital of N5m, and within those five years, we achieved the landmarks, which are those thing we said must happen. Part of those things is that once the company is five years, we would go as a publicly quoted company, which was part of the blueprint.

What people don’t know is that when you start a business, it gradually starts to peak and when you are getting to five, six years, it actually gets to its peak and it starts to decline. We are conscious of that in our organisational development that every five years we must do something new.

So, what you find in the last 20 years is that Mutual Benefits has had focus. We started the first focus around 1995 and by the time it was 2000, the company got to its peak and we started another curve with a new strategic plan to take us through the next five years, and after 10 years, a new strategic curve. If you look at every five years of Mutual Benefits, there is something we can call a landmark. When we were 10 years old, we acquired this edifice we call the head office, which is a major turning point for Mutual Benefits in really announcing to the whole world that we have arrived. Twenty years down the line, we have had focus, aggressiveness and even our own marketing approach.

What prompted the company to develop a buoyant retail outlet?

As much as we value the contribution of the corporate world, we realised that we must have our own marketing approach. We choose the retail angle of it, selling insurance through partnerships and strategic alliances and that has been sustaining us.

Again in 2006, during the last recapitalisation exercise, we opened up Mutual Benefits consciously by having international investors. Today, American interests own 27 per cent of Mutual Benefits. By 2007, we recapitalised and came up with another five years’ strategic plan, which we call the wind of change and is our strategic engagement with all our stakeholders.

It detailed how we are going to do our marketing and market expansion and investment. We then came up with transformation goals that detailed our strategic approach in all areas – human capital development, product development, expansion pattern and everything. And I am bold to say that in the last five years, through our retail outlets, Mutual Benefits has singlehandedly brought overN75bn into this industry; premium that would not have come from anywhere. We plan ahead, we agree on parameters and we follow. And, of course, when challenges come, we have ways to mitigate them to stay focussed.

I can’t say what we have done in the last 20 years without clear reference to the regulators; the National Insurance Commission, which gave us the maximum support to be where we are today.