By Omobola Tolu-Kusimo
Insurers have been urged to mitigate risks arising from COVID-19 pandemic.
The Chairman, Energy Institute, Osten Olorunsola, made the call during the inauguration of the Nigerian Insurance Association (NIA) Chairman, Mr. Ganiyu Musa.
Olorunsola, who was the chairman of the event, said the changes in livelihood and businesses also affected industry.
Olorunsola, who is the Chairman, Energy Institute, hoped the industry would not only respond to the challenges, but also anticipate and mitigate possible ones.
He said: “This is a time the world we live in took an unprecedented turn a little over a year ago when COVID-19 sneaked in like a thief in the night. It came like a simple flu. Before we knew what was happening, it became endemic, and, shortly thereafter, was called and epidemic. By March 2020, what had not happened in a little over 100 years happened – a global pandemic.
“About 3.9 million deaths have been recorded as at yesterday, and still counting. Once in our lifetime, we witnessed a pandemic that attacked the three most critical essence of livelihood – Health, Energy and Economy. They were individually and collectively severely damaged, leaving the whole world confused, helpless and almost hopeless. I pray that our memories of COVID-19 will not be defined by the number of cases or deaths. Rather, let us exploit the opportunities that come with it.
“No doubt, our world and livelihood have changed for good.The way we live, chat, relate, communicate, transact, work, travel, socialise and, I dare say, our approach to management of risks have all changed.”
He urged the new chairman to apply his knowledge of the industry to record more success during his time.
“As we socialise, I would encourage that we ponder as well as share views on a few of those global risks and evolutionary trends that have great potential of challenging the uncertainty, the frequency and the severity of insured losses going forward.”
He highlighted climate change, global terrorism and cybersecurity as three critical global risks and trends insurers should take interest in.
He said: “The world is experiencing more frequent natural disasters associated with climate change, which as you all know, is a result of rising temperatures attributable to carbon emissions largely from fossil fuels. This is the much-talked about energy transition. Several interventions are ongoing to curtail the emissions, including new technology breakthroughs, innovation and efficiency gains, squeezing out funds for carbon energy projects, and uptake of more renewable fuel types. Citizens action against emissions have also attained very sophisticated dimensions.
“Whereas handling the more physical phenomena of climate change like wildfires, floods, quakes etc, might be more advanced, the potential health impact is still very much unknown. A possible health pandemic due to extreme temperatures could be multiples of what the world has seen with COVID-19, possibly making climate change the greatest existential threat to human health history. As the world gradually transit and embrace the green economy, your sector is expected to play a leading role in helping stakeholders manage emerging risks.
“Terrorism is the use of illegal force and violence for political, economic, religious, or social goals through fear, coercion or intimidation. They are usually geographical, deliberate, premeditated, intentional and systematically designed to inflict mayhem and maximum damage at a location. Terrorism is neither accidental nor random, and they cover a broad range. No doubt, the character of terrorism and similar crimes make them quite difficult to design appropriate risk mitigation or insurance covers against losses. But since the frequency of the occurrences and the severity of such crimes are on the increase, the insurance industry would have to develop more sophisticated systems to better manage the inherent and associated risks.
He continued: “Digital is the new world. More people would rather transact in the cloud than physical. Technology is far advanced in digitalising almost everything that is previously done physically. Again, thanks to COVID-19, which has made this isolation, contactless or minimal contact habits the norm, making platforms like Facebook, Twitter, Instagram, LinkedIn, knowledge platforms, media sharing, communication and collaboration tools like Zoom, Teams, etc the preferred way of life. While these platforms have solved a lot of problems for humanity, it is equally well known that they are vulnerable and open to increased internet-based risks including network security, information piracy, business interruption, data hacking and destruction, extortion, theft, fraud etc.
“Although cyber-security insurance appears to be relatively well-developed before now, the industry will, no doubt, have to drastically improve its sophistication to be adequately prepared for the complexity and multiplicity of the new risks associated with the predominantly digital world. I believe the NIA, under the leadership of Chairman Ganiyu Musa, will sufficiently and successfully crack these issues and proactively get the industry to a pole position for modernisation and sophistication.
“Finally, your industry must progressively leverage the use of internet capabilities, data and advanced analytics to boost risk transparency, curtail routine accidents, mitigate damage, deployment of innovative customer services including flexible, responsive and personalised systems, better management of claims, decrease underwriting risks and expand insurability. With innovation, technology advancements and more accurate predictive capability, there is a great opportunity to automate for efficiency and effectiveness.”
Meanwhile, Musa, who is the 24th chairman of the association, said the NIA, an umbrella body of insurance companies, would refocus to enable it get support from stakeholders, particularly the executive and legislative arms of government, adding that it would also work with others to maximise the benefits of insurance.
The NIA chief unveiled his nine-point agenda to enable him take the industry to lofty heights.
His first agenda, he said, is to work with stakeholders to ensure the passage of the Consolidated Insurance Bill.
He also seeks to improve the relationship between NIA and its regulatory agencies, including National Insurance Commission (NAICOM) Central Bank of Nigeria (CBN) Securities and Exchange Commission (SEC) and National Pension Commission (PenCom); collaborate with other bodies to deepen insurance penetration; promote ethical standards among NIA member companies and the larger industry to earn the respect for it; work with stakeholders to address laws on insurance practice; work with its partners such as GIZ and the Financial Inclusion Secretariat to ensure more insurance penetration and work with NAICOM to achieve the migration to IFRS 17.
Musa maintained that the list was not exhaustive, adding that his administration would look inwards to take advantage of the untapped potential demand for insurance, stressing that this would engender relevance of insurance business to the growth of the nation.
The NIA has published the expulsion of Industrial and General Insurance Limited, Niger Insurance Plc and Standard Alliance Insurance Plc for failing to meet their obligations to policyholders.
The firms were asked to stop using the NIA logo on their letterheads and documents.
Commissioner for Insurance, Sunday Thomas, implored the NIA to ensure that its members live up to their claims’ responsibilities.
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