Fajemirokun: At Dangote, Our Adherence to Local Content Law is 100%

Dangote’s Group Chief Risk Officer, Dr. Adenike Fajemirokun, spoke with Jonathan Eze on the challenges of managing a conglomerate, the implications of delays in payment of insurance claims, and the role of technology in the insurance industry, among other

May I meet you? My name is Adenike Fajemirokun, I guess people refer to me as Dr. Adenike Fajemirokun. I am a mother of two, I work for Dangote Industries at the Group level, I am the Group Chief Risk officer, Insurance Officer and Procurement Officer as well. I am an engineer by qualification; I have a bachelor degree in civil and structure engineering. I moved on to do a sponsored PHD in quantitative risk management and from there, I went on to investment banking where I started with Goldman Sachs and from there moved to Deutsche Bank in London where I started as what you call an assistant vice president over there. Because I came in with a PHD and moved up to be a director and you know when you are an African in another country there is really not much you can do and at that point, I decided to come back to Nigeria to become the operational risk officer at First Bank and from there I went on to start my consulting firm. I consulted for CBN, First Bank Capital, AIICO which I am also on the board of directors at that time, but I moved to join Dangote ever since for the last four to five years mainly as a Chief Risk Officer and open to other roles which is where you find me now.

How has it been managing Dangote in terms of risk? It is a very exciting portfolio. It is like working for seven or eight companies at once especially when you are doing it on a group level. For me, it is very hard to meet the challenge or excitement that you find being a risk officer on this portfolio; but beyond that it is a very dynamic organisation. You have to be very quick on your feet and you have to be very quick particularly around the risk management space, but I think it has been good for me in Dangote, it is an organisation that really lead by regulation, it is not a financial institution, there is no regulation that says you must have a chief risk officer or must have risk management done in a certain way.

I think it is intriguing to find out that the organisation itself saw a need for it; maybe for their internal practice and it was very successful before risk management became a structured manner and you know it is an organisation that has been here for a very long time. It has been a very exciting portfolio and I have all the support I need. One of the challenges of risk management is its buying. Risk is something that is intangible, a lot of the time, it is a probability of something happening but has not happened and you have to protect against it. This is very difficult to sell and you know human nature is show me and I will put my money into it, but when you are not showing me and you are asking me to put my money against it or put my backing against it, it is very difficult, but for an organisation like this, it is inherent, they have bought into it and it has made my job a lot easier.

It is exciting because it is constantly changing. There is no day I come that you find things the same and for the insurance portfolio side as well, it is again if you think of Dangote as an institution, it can also be an insurance company if you look at the capital investment he puts into insurance, again that is a very dynamic portfolio, because most companies you are working you are insuring policies, but here, there are so many types of policies because you are dealing with cement plants, sugar plants, refineries, fertilizers, different products and so you can feel like you are part of the industry even though you are a consumer, so it is a good portfolio.

There was a report recently that Dangote paid almost N5billion as premium in 2016, yet some companies are yet to settle over N400 million owed it. How true is this claim? Dangote has paid, but the figures tend to change. I do not know where different journalists get their figures from, but it is approximately about N5billion; so that is correct. The interesting thing about the portfolio is that we have a few insurance companies that have not paid and the context of that was that you pay premiums to insurance companies but it only becomes of value to consumers and at a time when you make a claim, but before it is just a cost. For example, your car insurance, the only time you know you have it is when you need it. Insurance is not something you think of until the time you are calling on it, so for me, when you become of value to me is when I have a claim. If you have put this money down to protect your assets and you have a claim, I expect that these companies must turnaround and pay and when they don’t, it is not good for the industry, consumers service perspective.

So that was where that came from, which is to say that for me to have insurance companies, meant to pay almost N500 million and it’s not paying, it can collapse an institution. You do not know what not paying that has caused us as an institution. Normally, with insurance, you can have 10 underwriters and maybe eight have paid and two have not paid and the view might be that eight of you have paid but the two that have not paid might be what will collapse my company because I have to look for N500 million to cover that cost, so that was where that came from.

What are the implications of a poorly handled claim, especially with the dynamics of social media? I think it is damaging for the reputation of the company. I know the regulators are starting to be strict, but from that seminar, there were some few comments around which will make them a lot stricter that people are not handling things the way it should be. Words travel very fast and the minute someone knows that an insurance company is not paying a claim it is very rare for that person to go to that company for any insurance because you will think they are still taking their funds from a pool whether it is Dangote or any other company. The person would ask If you do not pay these people why will you pay me, so the main thing is that you are damaging the reputation of the company and you cannot put a price on that and a country of 180 million that travels fast for the company and for the consumer where the claim is not paid as I said, it has financial impacts because you cannot basically replace all that you lost from the incident with insurance because you have not gotten your claims paid for the consumer. It is also a reputational problem, it is also stressful because we all know how it is to chase money and when you are chasing your money and somebody is not answering you, that is a very stressing and frustrating situation and for someone managing a portfolio it is your responsibility to get their money and it can have a career impact on the individual.

Please, can you throw more light on the generic risk situation models?

It is exciting because it is constantly changing. There is no day I come that you find things the same and for the insurance portfolio side as well, it is again if you think of Dangote as an institution, it can also be an insurance company if you look at the capital investment he puts into insurance, again that is a very dynamic portfolio, because most companies you are working you are insuring policies, but here, there are so many types of policies because you are dealing with cement plants, sugar plants, refineries, fertilizers, different products