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Our Objective Is To Become Insurer Of Choice – Funmi Omo

Posted on: 13th Jul 2020

African Alliance Insurance Insurer

MRS Funmilayo Omo is one of the leading lights in Nigeria’s and Africa’s corporate world steering the affairs of the 60-year-old company.

With about 30 years of experience and proven track record of success in insurance sales, product development, technical underwriting, result-oriented people management having to be a part of the transformation and advancement of the Nigerian insurance industry; she earned her position as the first female Managing Director/CEO of African Alliance Insurance Plc (AAI).

Funmi Omo is the first MD in the history of the company to champion and successfully accomplish the rebranding and digital transformation of the firm since its inception. Recently, she was named amongst the top 100 female CEOs in Africa by Reset Global in acknowledgment of her performance and excellence in the industry.

In this interview with Daily Sun, the innovative and transformational leader talks about her company at 60 in business operations, issues in the insurance industry, and the way forward post COVID-19.

Excerpts:

Alliance at 60: Journey so far

African Alliance is a foremost life insurance company, incorporated on May 6, 1960, and founded by the inimitable duo, of Chief S.L Edu and Mr. Talabi Braithwaite, who were widely regarded as the first chartered insurance practitioners in Nigeria. Munich Re was a coowner and technical partner. Their vision was simple: to be the most preferred life insurance company of choice. To achieve these, the firm set out to make the customers its primary focus, that would create a lasting legacy for themselves in the lives of Nigerians.

Building a lasting legacy means having a string of innovations under your belt. African Alliance is notably famous amongst others for being the first life insurance firm to introduce Takaful; an Islamic compliant insurance scheme in Nigeria. This feat was achieved under the leadership of the then CEO, Mr. Ope Oredugba in 2002, who had, in the wake of the introduction of the Sharia law in parts of the north, felt there was a niche in that line of insurance that could appeal to the region. The impact of Takaful in Nigeria was so great that less than six months after its formal launch, the company was being inundated with requests from within and outside the African continent by those seeking to benefit from the products. Today, Takaful has grown into one of the most viable business lines in AAI so much that it has easily warmed its way into the hearts of non-Muslims alike.

In the past 60 years, through consistent hard work of its managers, AAI has steadily grown to become among the top five life insurance companies in the country. From humble beginnings at 112 Broad Street, Marina, Lagos, it has expanded its operations to 18 branches nationwide and has a regional subsidiary, Ghana Life based in Accra. Its customer base has also grown with over fifty thousand (50,000) policyholders in its books.

Targets, priorities as CEO

My immediate priority is to drive premium income along all the product lines and business units.

Already, we have targets set for this purpose. My second priority is organizational development; to develop our people in the organization because we can only be as strong as the quality of people in the organization. The third one is to ensure that we sustain and possibly improve on visibility because driving visibility will also help the brand and dovetail into the bottom-line. So, for us here at African Alliance, those are the key priorities for this year and I believe we have put structures and mechanisms in place to enable us to achieve these objectives and we are driving it aggressively.

To improve our visibility; I mean we want to be in the mind, face, and in the heart of every Nigerian. We just don’t want to be a household name but a household thought. We want to be the best, the preferred.

Recapitalisation plans

I wish I could specifically list our step-by-step plans towards recapitalisation but as you know, this is
a very sensitive topic and I cannot say much. However, I can assure you that we have the support of the shareholders on our plans and we are already in the middle of the execution of the plans we have towards recapitalisation and; we are sure we will be long done before the deadline. We are confident that with the kind of support we have received from shareholders and the plans we have in place; we will meet the deadline.

Business strengths and sustainability

Being in existence for 60 years means there must be something we are doing right The major thing that has kept us in business is the customer and the customer experience and that is what we keep improving on and this is how we keep raising the bar. So, every activity here is channeled towards improving customer experience and this is what has distinguished us from as an organisation and sustained the brand.

Relationships go a long way in sustaining businesses and this has been my value proposition for three decades now. Keeping relationships is where my interest and passion come from so, the ability to manage customers overtime, retain them, keeping them satisfied continuously has kept us in business.

Hence, infrastructure, processes, and the personnel all focus on our customers. We have a team of professionals that manage the business and we constantly improve on our processes in the business. We just recently got our ISO Certification and this is part of business advancement because we have a business continuity plan in place which supports that.

Lastly, we have strength in the familial leaning of the company. We are one big family. This culture has been with us since inception and I am the latest in line of home-grown CEOs the company has seen, albeit the first female CEO.

Challenges and lessons learned

The challenges we have had over the years have been competition, the business environment. As you can see the investment climate has been very volatile right now and interest rate fluctuation is sometime else. Another challenge is the global economy generally because the world has become a global village and whatever happens in business on the global scene has a way of impacting businesses locally.

A typical example is this current pandemic; the COVID-19 the world is battling with. With this pandemic now, we still need to manage the recapitalisation exercise and still run our business. The major lesson these challenges has taught us, especially COVID-19, is that you must always factor into your business the fact that things can change at any time and this is why business continuity is very crucial; because it is the continuity of the business that will make you meet targets and also deliver value to all stakeholders.

Impact of COVID-19 pandemic

The impact of the pandemic on the company’s profitability means more income for the company because life insurance is likely to sell more this period. As people who ordinarily do not give attention to the importance of life insurance which we have been preaching will do so now. On the flip side, there would be more claims as many affected by the pandemic would need to dip hands into their investments to get by. This was the reason they bought the policies in the first place; so, for any insurer to turn profits from the increased income, they have to ensure their actuarial valuations are top-notch so the expected increase in income is not wiped off by excessive claims.

Government role in easing challenges

Essentially, the government needs to provide an enabling environment for businesses to thrive. The interest rate needs to be stabilized by the government. The government also needs to ensure that each sector needs to operate optimally. For instance, with respect to life insurance, up till now, the government that is the high spender is yet to pay a premium. In fact, throughout last year till now, it is yet to pay group life premium. What this means is that any employee of the federal government who died in service, will not get any death-in-service benefit.

Insurance performance in Nigeria

In terms of performance, there is still work to be done; we need to be more innovative and creative. These two elements are essential to insurance taking its rightful place in the industry. Huge creativity, innovation is needed and the delivery method of insurance needs to be improved upon. When these are structured, it will increase the level of penetration in Nigeria. It will bring a lot of investment in the retail sector of the economy because that is where we have most of the population; the bottom of the pyramid.

COVID-19 and the industry operation

Like every other company, COVID-19 has altered operations as digitalization is the new order now. Our digitalisation process has been accelerated. Now, most of our products are completely available for sales online without the need for any physical contact with a salesperson. Before now, we had gone paperless meaning we do minimal paper processing in-house, up to 98 percent of in-house processes are paperless.

Way forward post COVID-19

Way forward is what we call the new normal. Working from home will become a norm and already our Human Capital department is reworking its policies to ensure performance management is less dependent on presenteeism and about outcomes and results not just outputs.

Post recapitalisation narrative

Post recapitalisation, there will be more confidence on the part of the insuring public and financial strength on the part of operators. Recapitalisation aside bringing financial stability is equally part of confidence-building aimed at ensuring that the insuring public is happy, comfortable, and confident that their risks are being managed effectively. Therefore, since the exercise is to guarantee there is sufficient capital to match the risks that are being managed by insurers, I believe to a large extent that it will further instill and sustain the confidence the insuring public has in insurance and likewise change the negative perception of the industry since companies will have adequate capital to fully carry out their obligations effectively.

Enforcement of compulsory insurance

Regarding compulsory insurance, the government has tried by instituting it but they have also aided in ensuring it is not adhered to because they are not setting good examples for others to emulate by not paying their own parts of compulsory insurance premiums.

The government has a vital role to play in ensuring that they live up to the commitment they have made, thereby encouraging both the informal and private sectors to also obey the law. If the government obeys its laws, then the private and informal sectors would have no choice but to follow their lead. The only way we can ultimately have people obtain compulsory insurance is to have sanctions and this will happen when there are adequate management mechanisms put in place by the authorities.

Claims payment remains a sour point in the insurer-insured relationship

When people say claims are not honored, the first question I usually ask any person who says claims are not paid is if it is his/her experience or someone else’s. This is because there are times one thinks he/she has an insurance policy in place but in reality, there is none.

This could be a result of a variety of reasons; for example, the government issue of not paying group life premiums. In life insurance when a premium is not paid and the policy is not enforced if anything happens to that individual and death occurs, the beneficiary will not get any benefit. If the benefactor lays his/her hands on the document and comes for a claim, he/she is not entitled to any claim because premiums were not paid.

Also, in some cases, you find out that the cover and the claim are two different things. This means that what one is claiming may not be covered in the policy.

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