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Insurers must avoid shortcut — Wiggle

By on May 26, 2014

The Managing Director and Chief Executive Officer, Linkage Assurance Plc, Mr. Gus Wiggle, spoke to NIKE POPOOLAon the relevance of averting fire disasters and mitigating risks resulting from the incidence

What is responsible for the incessant fire outbreaks in the country?

It is lack of risk management; proper housekeeping is lacking. If everybody does proper housekeeping, we will hardly have fire disasters. Imagine you want to go to sleep and you did not remove the boiling ring that you left in the water when the light went off, or you are cooking and you forgot to switch off the cooker; and you went ahead to bring out a gas cylinder and fix it, without switching off the cooker. So, we need to create the enlightenment that people should have proper housekeeping. That is where it should start from. Cases of fire incidence happening in the market can be avoided if there is a proper housekeeping.

How can the government and insurance sector help to mitigate this risk?

All the government can do is to encourage you to take insurance. And the insurance firms will now be able to create enlightenment on how to do proper housekeeping. That is all. Government cannot come to your aid. It can only provide you the basic necessities. You lose your asset due to negligence and you want government to come and compensate you. No, it is not normal. Government can only compensate you when there is a natural disaster not a self-inflicting disaster.

Many run away from insurance because they think it is costly; how expensive is insurance?

Insurance is not expensive; but having insurance should not make you to be negligent. You need to imbibe the culture of cleanliness and orderliness. If you go to our market places and see the way they pack goods, they are susceptible to fire. The smallest fire can cause combustion; by the time the fire starts in one place, it can spread and wipe away all others. They need to have an understanding of how to arrange things orderly. We see how things are done in other countries. We see how things are packaged orderly. When we want to close for the day, we just pack everything in one place, including those that can cause explosion when they come in contact with others.

Again, the shops are never well ventilated. If you have insurance, insurance firm will pay you but it cannot pay you for the trauma of the disaster. So, why can’t you avoid it? Insurance is just to put you in the position you were before the loss. It cannot put you in your state of health or thinking before the loss. The trauma and anxiety may remain with some people forever.

How is micro-insurance doing in the country?

My understanding of it is that it is not all of us that can really go into micro-insurance; not everybody wants to play small. When you look at the capital you may deploy into it; it is said that I should not write a business with the sum that is more than N1m. How many premiums from the N1m risk do I want to put together to be able to pay workers? It is a good idea but I don’t think there should be any compulsion; let it be by choice. There are people who will just be playing at the micro level; there are some people with big capital and they are not ready to deploy a kobo of it to micro-insurance.

How has the Nigerian Insurance Industry Databse helped to reduce fake insurance documents?

It is working very well. I can tell you in a place like Uyo, Akwa Ibom State, for example, in those areas where we issue vehicle licence, they are now beginning to be conscious of the NIID to the extent that the VIOs, the road safety officers and the police need just to verify that your vehicle is in the system. Once it is not there, they will just tell you that something is wrong with your paper. It is not going to be immediate, but I know in another three years, the story of fake papers would have been reduced to the bare minimum. We cannot eliminate it, but we can make the business uncomfortable for those in the fake market. We are going there but let’s consolidate on the motor; our next focus is marine insurance.

We should not have multiple motor insurance registrations with the NIID because the moment it is being uploaded, the same chassis and engine number uploaded into the NIID portal will just give a sign that it already exists; and it is able to identify those that have the intention to defraud. It is beginning to highlight those short cuts. So, it is something that has come to stay.

The only thing is that anything you want to buy, ensure you buy the genuine item. It lasts longer and gives you comfort. Genuine insurance gives you comfort and protection.

What does marine insurance entail?

When your goods leave one port to the port of destination, the hazards of that transit are covered under marine insurance. So anybody that is into importation and exportation needs insurance. Those involved in the movement of a product from one state to another also need a marine insurance.

How are the regulations in the sector influencing insurance business?

Regulations like the ‘no premium no cover’, commission and rebates being enforced are not new; all they are doing now is enforcing the existing laws. The no premium no cover is in the Insurance Act; this issue of rebates is contained in the Act. All they are doing now is enforcing them. We have been too lackadaisical in our mode or tactics, and all that the National Insurance Commission is doing is enforcing the regulations. And I commend them for having the courage to make us to it right.

What is the way forward for the sector?

We should just be professional about our practice; we should close our eyes to short cut.

How has the guideline on local content in the oil and gas industry helped the underwriting business?

It has changed the gross premium income of most insurance companies, the local companies have benefited. A thing that is contributing between 25 and 45 per cent to some people’s bottom line, we can’t say it is not working well.

What are the new developments in Linkage Assurance?

We now have a new board to reflect the new ownership structure. We have a deputy director who is an actuary by qualification. And of course, we have engaged new people in our marketing department to complement our marketing force. Our increase in capital has helped our capital base; it has helped us to review what our retention is like. It has helped us to determine the kind of risks we want to go into. It is beginning to play a significant role in our bottom line, and of course, you cannot ignore the interest that comes from the investment part of it.

What are the product innovations you are planning?

We are coming up with some products which are at the final stage and of course, we cannot start talking about the products if we have not got NAICOM’s approval.

What we are doing for now is to as much as possible simplify some of the products that are in the market. By the time we get NAICOM’s approval, which hopefully will be done before the end of this year, I think there will be a rollout. I can give you some insight, it is going to be well enabled; we don’t need any interface with it, it is something you can buy easily, thanks to cashless economy. Everything can now be done on the Internet. We want to take advantage of e-insurance where you are able to sell and buy insurance on Internet in the comfort of your room. We will definitely have insurance agents in the distribution.

 

 

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