Mr Niyi Onfade, Managing Director and Chief Executive Officer, Heirs Life Assurance Limited, in this interaction, speaks on gradual popularity of life insurance in Nigeria, regulation and sundry issues. SUNDAY OJEME reports
What is your assessment of the life market in 2021?
Life insurance has been booming and, 2021, I believe, is a good year for the industry and for the life market in the sense that, yes, COVID-19 dealt with many businesses and life business is not an exception because it is a business just like any other business and we operate within the same economy.
So, the industry witnessed every challenge that every other business witnessed due to COVID-19. But then, as far as life insurance is concerned, I want to say that COVID-19 created awareness for life insurance not only in Nigeria but worldwide. People are now much more aware of the need for them to have one form of protection or the other.
Again, I also want to say that our coming into the market has also assisted in creating a lot of awareness for the life insurance market.
We created a lot of awareness digitally and in the papers, on televisions and radio and other companies are also doing something similar to that. With that I want to believe people are gradually embracing life insurance and want to believe that this will continue for the industry and then I also want to believe that this will continue to translate to more revenue for the industry.
You mentioned that a lot of good things happened to the industry in 2021, what are the key takeaways that would impact the industry positively in the coming year(s)?
The takeaway for me will be that the customer of today is very very aware of this news and …the customer of today is more digital because we are now in digital world. So, for me, the way to go is digital in everything we do as an industry.
I say to people that the customer of today is so impatient. He wants to be served on the go. The customer of today wants something and he wants it right now, not tomorrow. So how can you meet the need of that customer if you are not digital, if your operations are not backed with technology? So the key takeaway, for me, as individual, as a company and as an industry is that we must embrace digital transformation.
And that is why for us, from day one everything that we have to do has to be digital-led.
Going forward as we enter into year 2022, I want to see the players in the market doing things a lot different in the way they serve their customers. For us, we will continue to lead this as an organisation and people have already recognised us for that.
Again, contrary to the general belief, Nigerians don’t have anything against insurance the only thing is that they want to see and experience insurance in certain ways.
They want to be well-served, they want simple products, they want access to your products and services and they want simplicity. For me, those are the takeaways; we have been able to prove it in the last one year of operation. Our operation is based on four key philosophies – simplicity, accessibility, quick and reliability (SAQR). As we move into the year 2022, as an organisation, we will continue to pursue our four key philosophies of simplicity, in the sense that in everything we do we make it simple, accessible digitally or physically. And we make everything that we do quick. That is the Q in our philosophy and finally, we are reliable.
We call it SAQR. Again, as I said in the beginning of this discussion, insurance is a business of promise so you have to be reliable for people to rely on the promise that you are given. And reliability also means that you have the capacity to deliver on your promise. And what is this promise…the promise is that you pay a premium in the event of loss I will pay claim.
If you don’t have the financial capacity, you are going to fail the customer. That is why I am so happy that in Heirs Life and Heirs Insurance the financial capacity is there. From day one we have been fully capitalised. Heirs Life Assurance has a capital base of N8 billion, while Heirs Insurance has a capital base of N10 billion. Again, other forms of reliability are that you also have reinsurance support and we are supported by the biggest of Reinsurance Company in the market and the people.
Can you also assess what the regulator has been able to do within the period under review?
I like what the National Insurance Commission (NAICOM) is doing and how it operates now. Just as the industry, I can say the regulator is improving by the day. I can also see the regulator leading a number of initiatives, which is very very good.
NAICOM of today is no longer that regulator that just sits there, not an authoritarian or autocratic. We now have a regulator that is so keen for the growth of the industry and a regulator that is responding to the dictates of the market. I give you a couple of instances, NAICOM came up recently that every submission to the Commission should be done digitally and they came up with what they call NAICOM portal.
So, for you to submit your report you have to go through the NAICOM portal and that is the reality of today. No longer will you have mountains of reports sent to the Commission through courier or a member of staff. Right from your office, press your button and submit your reports.
The good thing is that you can also view your report the way it is with NAICOM. So, what NAICOM is trying to do is to keep a database of all insurance policies in Nigeria. That is a great initiative. Apart from that, you also see the Commission pursuing the enforcement of the compulsory insurance, so they are doing a lot of things.
We spoke about retail a little while ago, NAICOM is highly interested in retail business and they are giving the industry all the necessary support. You see the Commissioner for Insurance, Thomas, in the news every now and then, trying to get people to understand insurance, trying to sensitise people on their right and how NAICOM is also protecting those rights as well.
So, for me, I think the regulator is really doing well. But they cannot do the work alone. The job of NAICOM is to create the right environment, have the right policies, the right procedures and guidelines that would help the industry to grow.
So the onus is now on us the practitioners to also support NAICOM in its initiaatives.at all we are all in the business to satisfy the stakeholders and the customers as well.
So, for us at Heirs Life and Heirs Insurance, we will continue to work closely with the regulator on how we can develop and grow the industry. I must give credit to the regulator in the sense that since we started operation in 2020 they’ve been really supportive.
Supportive in sense that when we applied for anything they don’t delay, they respond to us as quickly as possible and that is the beauty of having a digital regulator. All our products were duly approved in no time by the regulator, that for me, it’s good. For me, I am highly impressed with Thomas-led NAICOM.
Life insurance is more of long term plans and most times the macroeconomic indicators tend to affect these long term policies, what is your take on this?
Truly the growth of life insurance is also a function of the growth in the economy like any other business do. In most cases when the disposable income of the home is high, there is every tendency that life insurance will also grow better. When the economy is good, of course, every business will grow, including the life insurance.
That means people will keep their jobs, businesses are booming, which means people can buy life insurance, when you and I have employment that means we are earning income and can be able to afford the premium, that also means that we can save which is what life insurance is all about.
In terms of what I see of the country, I foresee a better future for the economy. Now, apart from all these, our aim at Heirs Life is to make life insurance a first line charge for every home, to make a life insurance a life style.
What does that mean… it means that as you draw up your budget every month, as you itemise what you will buy you must also have life insurance as one of the first line charges. If you make life insurance a life styles no matter what the economy says people will have life insurance.
Barley one year of operations what have been your achievements, and challenges in the cause of operation?
First and foremost, let me say this, we spent seven years waiting for our license to come. So,
it was a seven-year journey starting from 2013 or so. So, I think the challenges actually started before we started operation. Someone described us as a team that experienced the longest wait in the history of insurance licensing as far as the industry is concerned. We passed through three different commissioners for insurance, but we thank God that we finally got it because it wasn’t easy.
So, in terms of how it has been over the last one year, I want to confirm that it has been very, very good. Again we launched out when COVID- 19 was really really ravaging everywhere in the world. At that point it was quite challenging for anyone to start a new business but because we were well prepared before we even got the license.
Because those seven years of waiting were spent doing different things, putting things in place and getting ready for the license and when it finally came it didn’t take us time at all to start off. We collected our license on the 27th of November and by 1st of December the operation had taken off.
That was barely three days’ difference. Challenges, yes, in the sense that that was when COVID-19 was really ravaging everywhere and as a startup we also faced the challenges like any new startup. First, we had to put our team together, get systems in place, and get our structure right and so on.
Then, we needed to also let people know that we are now in operation. So, as a new startup we also faced the same challenges as any new startup would face. But in terms of good news I would say that it has been very good. I am highly impressed the way the generality of Nigerians has embraced the two companies, that is Heirs Life and Heirs Insurance. We came in with a lot of promises and that is because insurance itself is a business of promises.
You give me your premium today and I promise to do xyz if you suffer one form of loss or the other. So people have that confidence in us.
They believe that we came to the market to contribute to the growth of the industry and the economy at large. And I must also mention that even the people and the organisations we met within the industry also welcomed us with open hands.
I always say to people that our business is a business of collaboration and that is why you hear things like facultative business in the sense that you have one insurance company giving business to other company. So far, I want to believe that we have delivered on some of the promises that we made and will continue to deliver on those promises as well.
Can you give an insight into what your market share is like amid the tensed competition in the market space?
Yes, competition is there, no doubt about that but as I just mentioned, it’s a healthy competition. To be honest with you when we came into the market we made it clear that we will collaborate. We are not in the market to start competing in a negative manner but compete in the way that will benefit the customer.
So we came in with the digital approach and that is why today we pride ourselves as digital insurance company.
What we have been witnessing is that if we make one announcement today, a few days after we would see one or two other companies making a similar announcement.
For me that’s a good competition because it’s for the benefit of the market. Just to give you one or two examples, I recall the time that we said that people could lodge their claims on our website within five minutes, a few days after another company came out to also launch something that could onboard customer in a number of minutes.
So, what we are saying is that the time we launch our website we found one or two companies doing a similar thing. For me, it shows that our industry is changing. Hardly would you listen to some leaders in the industry now without hearing them saying they are going digital. I believe that this’ what we try to make it become a reality.
For instance, today, I can proudly say to you that we pay claims within 24 hours and I have heard some insurance companies saying that they also pay claims within certain hours. For me when I hear things like this coming from the market it delights me.
It delights me because that is a healthy competition and that is the kind of competition we should be witnessing because at the end of the day that will help us deepen the insurance penetration in Nigeria which as we all know is still less than one per cent.
So we have a very huge gap when it comes to insurance adoption in the country.
But if all of us can come up with different ideas, different initiatives and new ways of doing business I believe it’s going to help the public. It will also help government in its drive for financial inclusion. So, for me, competition has been good based on what I have just told you.
When it comes to naira and figures, people have been asking, to be honest. But what I keep saying is that we are coming out with our figures very soon. Good enough we are ending the year now our financials will be out. I also want to believe that as we go into the end of the year the accounts of some other companies will also be published and that will enable you do the assessment to know where we are.
But then let me also add this, for me, it shouldn’t really be a case of competing based on figures alone it should be a case of competing in terms of customers’ satisfaction and benefits from us as insurance companies and as an industry and practitioners. That is the way I see it.
Today, when the customer is happy, when Nigerians are happy, all of us will be happy as an industry because there is so much to share.
Talking about innovations, can you tell us what you have done in terms of product designs and development? Are they products that actually meet the specific needs of the public? Like I earlier said, we came into the market with our simplicity philosophy. Now if you go out there and ask people; do you have insurance?
Generally speaking, when you talk to them about insurance the response you get will most likely be in the negative which to me is not good. Now if you probe further to ask why you don’t have insurance they will give you different reasons. And one of those reasons is what you just asked which is product.
For us, we came into the market with the promise to make our products as simple as possible and then to make it as easy as possible and to be accessible.
Many people believe that insurance is for the rich, they believe that it is not something they can afford so those are the kind of things we have gathered. Every Nigerian deserves to have insurance.
So, a quick search on our website you will see different kind of products that we have and they are made very, very simple.
We have products that you can pay as little as N5,000 to purchase and we also make everything that has to do with our products in terms of our proposal forms very simple. In our proposals there are no jargons, and when it comes to our policy documents you don’t need magnifying glasses to read our policy documents.
You know in those days’ people used to accuse our industry of using tiny prints but now we maintain bold prints. Let me mention one or two products that we have.
What we did during our planning stage we did a lot of research and carried out some studies and we asked ourselves; what do people really want? That is based on the belief that you don’t have to force products down the throat of the customer, your product should be based on what the customer needs and what the customer wants because there is a different between the two.
So, in those studies we realised that to some people what they want is family protection, to some people, target savings to meet some future financial needs. Then you have people who are particular about their retirement, you also have people who are concerned about the education of their children.
So when you look at our products today, you have things like My Heirs Plan which is a product for children’s education. We introduced our annuity product which is a retirement plan into the market not too long ago, about two months ago.
Then we have other different products to save toward different future projects, may be you want travel abroad, you want to build a house and so on. Then, the basic one which is the Term Assurance which basically covers the event of death. Those are the type of products we have on our shelve.
Can you expatiate on your 24-hour claims settlement?
You recall that recently the commissioner for insurance actually charged directors of insurance companies to ensure that they work with their managements to ensure that claims are paid as and when due. And that was before overtime from all reports we realise that the greatest pinpoint of people who buy insurance is claims payment.
People complain that insurance people are quick in collecting money but when it comes to claims payment they are slow or start coming up with one excuse or the other. I am not saying all the accusations are right but the point is… it is a big pinpoint and we feel this pain of the people who experienced all these claims delay or denial.
Just as the commissioner said; on no account should a customer go through any form of pains when it comes to claims payment.
So, we then sat here at Heirs Life and asked ourselves how we can delight our customers when it comes to claims payment. And we said look, within 24 hours if you pay claims to your policyholder then you would have done noble. So that is why we came up with the idea.
Once you have your document and of course, we will work with you to have them, immediately I get your documents within 24 hours max we pay you.
And that is what we have kept to. And also noted is that most of the customers do not even know the types of documents required to process the claims, so what we do is not only to educate customers on policies but also on how to lodge claims. And that is critical because if you know how to go about your claims there wouldn’t be any argument.
How is Heirs Life positioned to take advantage of the retail market?
While I was talking about my career I spoke about the fact that I spent a bigger part of my journey in the life and pension business. Don’t forget that prior to the enactment of the pension reform act it used to be life insurance companies managing pension and I also spent sometimes in the pension fund administration’s world.
So all these are retail, life is retail, pension is retail that’s the truth. Yes, we have group life which has to do with corporate bodies but generally life insurance is retail in nature.
And I want to believe that if we want to deepen insurance penetration and density in Nigeria we have to focus on retail. I see retail insurance business to be the future of this industry.
I want to also believe that we are already on that path as an industry. recall some 15,20 years ago when you look at the industry data you would realise that general business used to be like 90percent and life would be like 10percent and later it became like 80 to 20 per cent. But today if you look at thee industry data, general is about 53 per cent and life is about 47 per cent. You now ask yourself, what is driving this…
What is driving it is annuity for instance. Annuity is an individual policy for a would-be retiree. But people also buy individual life policies these days the more. So, I believe I’m seeing this continuing to improve. Here at Heirs Life we focus our attention on retail because that is where the future