Casmir: Insurance Industry has Been Making Provisions for Catastrophic Losses like #EndSARS

Managing Director, Afriglobal Insurance Brokers, Mr Azubuike Casmir, is a veteran insurer with over 30 years experience in insurance business. In this exclusive interview with Ebere Nwoji, he spoke on issues of public interest in insurance, role of insurance in the #EndSARS protests losses, the place of digital marketing in insurance business in Nigeria among others. Excerpts

You are one of the insurers in Nigeria who has seen it all in the business of insurance. The industry is experiencing a lot of changes in the type of risks and quantum of claims coming its way. We heard about the losses from #EndSARS protest and other emerging risks, are indigenous insurers insuring these emerging risks?

Let me talk about our local challenges. That is what is primarily causing the problems. When you talk about emerging risks like cyber risks, look at London market, they are very versatile, very experienced and they have built so much capacity and competency in that regard and they have what it takes to also guard against certain cyber losses.

But our own situation here is that we have very volatile environment. Volatile in the sense that if you are not careful and you take a cyber risk, in the next two weeks, you will hear that the risk has crystalised and if the insurance company is not careful, it will be paying out claims that can make them go under so that is our local problem you talk about terrorism risk, of course, terrorism has become international problem.

Whereas other countries have been finding a way to address their own terrorism challenges, Nigerian case seems to be going unabated.

Everyday you see the situation worsening, if insurance cannot determine the likelihood of occurrence of a particular risk and it is dabbling into it, you are burning your fingers and that is some of the reasons some of them are shying away from it.

Is there any lesson from the EndSARS protest and COVID-19 for insurers?

Well, the lesson we learnt from #EndSARS protest is this we have been hearing about catastrophes and everybody believed that catastrophe can only come when you have wars, natural disasters like flood but little did anybody know that it could come from that angle and it came and was very overwhelming to the industry.

But if you look at that EndSARS protest critically, it could have been possible for insurance industry to opt out of that risk or those losses but for image reasons, the industry decided to take them up because when you read the policy document, they will talk about riot, strike, civil commotion, war or war like situation, politically motivated risks.

If you bring these together and link them to the #EndSARS protests, you find links which could have been possible for insurance companies to say look, we are not liable or at best let us pay these claims on ex-Garcia basis. But because the industry is struggling to shore up our image, we paid.

But those they paid bought extension what about that?

What are they extending, to cover riot and strike? Is that not true? That is the only extension that can cover that risk.

But even if you extended the policy to cover riot and strike, have you talked about the likelihood of that riot and strike being politically motivated, being close to insurrection, and the rest of them. So if there is a link, what we call proximate cause in insurance business, if you find any link between these things I mentioned and those losses that could arm insurance companies to repudiate liability.

Is it possible for insurers to design specific products that can directly address these emerging risks?

I don’t think that is the solution. You know there are actually provisions for catastrophic losses. That is why insurance industry is regarded as a conservative industry.

Over the years, insurance industry has been making provisions for catastrophic losses like the #EndSARS protest.

If you make a profit of N10 million, the law will always require you to set aside N2 million for catastrophic losses, unexpected losses that could go over and above what you ever anticipated.

So insurance industry in Nigeria, if they have been keeping their records over the years have been making reserves and provisions for the likes of #EndSARS losses so all they needed to do was to take back from those reserves and pay the claims.

Your company Afriglobal recently set the pace in digital insurance marketing through the launch of the Africover 247 platform. Coming at a time when many other brokers think digital marketing is not yet the way to sell insurance in Nigeria. It’s about two months since you launched the platform. What is your experience like; how is the platform performing?

You and I know very well that technology is an ongoing thing. It is not one action you take and go and relax believing you have done it all. Technology is evolving and every now and then, something new comes up so you keep updating and upgrading what you already have. The platform we launched you know it is the first of its kind in insurance industry particularly in broking arm.

Before then, there were existing platforms particularly owned by underwriters deployed to one client or the other such that they could do their transactions with that particular client. But that is not the type we launched. Nigerians can use the application we launched outside the country. You may be surprised to hear that those that have shown much interest are Nigerians outside the country.

Those of them that have assets here and they have been thinking about how they could have their assets here insured. Some have vehicles here that they left they are not using them. Some have landed properties that are not insured, probably they felt it was going to be difficult for them to be doing insurance all the way from there, but now for the first time, it is easy for them to just pick their phones and buy insurance for any of their properties anywhere in Nigeria.

So the acceptability is very wide. Quite many people have successfully downloaded and are using the application. Many also have fully used it to buy insurance but like I said, we are still upgrading. What we have also done is to partner with some well known online markets. Yes that is the right way to go let me give you an example Konga.

Konga is like an online supermarket where you go to and you buy any product. It means when you go to Konga, you also buy insurance and when you say Konga insurance and click, what you get there is Africover 247, and that will give you the link to buy any insurance product you want. This is just an example of what we are trying to do. There are quite a lot of other establishments we are partnering with.

What kind of partnership are you talking about with the online markets?

Let me use another example with Paga. You know you use your phone to do your transactions. You also use POS outlets to do your transactions. So the partnership is such that when you go to POS outlet, just as you do your banking transactions you can also buy insurance. So you have Africover as an app there so when you click, you buy any insurance you want.

But the truth is that if you invest in any technology and you think that in the next six months or one year you recover your investment, you are making a mistake. It trickles in, then builds momentum and overtime you begin to see the effects. So we are very happy that the app is receiving the desired acceptability that is actually spurring us further to upgrade it further higher than we launched.

There is this widely held view that the emergence of digital marketing will render insurance brokers irrelevant in the insurance business chain, do you agree with this and what is your next line of action as a broker to remain relevant?

I don’t think that is true. Anyway, some brokers that are not alive to the realities of the day will be gearing up to go out of the market.

But let me put it to you that it is not all insurance that you can sell digitally. You and I know about some insurance like engineering insurance that requires a lot of expertise say insurance of vessels and others like that. You really need to be there physically to see what it requires so it is not all classes of insurance that you can sell digitally. You can do digital insurance mainly in retail market not in all insurances.

It is often said that insurance market is brokers’ market. Are you thinking along the line of partnering insurance agents? I mean floating insurance agency and be in control of hundreds of agents working for you bringing businesses especially retail businesses for you to place with

insurance underwriters?

We are looking at it especially at state level. What we have been trying to do is to have agents in various states that will be marketing that platform. Before we got this platform, we tried to employ a number of agents. We have one of the offices at the back of this place but the challenge we have as brokers is that whereas that agent can work directly with an insurance company, introduce any transaction, earn the commission and move on; the same agent will work with you, earn the commission and share with you.

So you find out that agents prefer working directly with the insurance companies. Of course the brokers live on commission so if you employ an agent that also lives on commission, both of you will share the commission and where the booty is not big enough, there will be problem because you find it difficult to satisfy them.

Members of the insuring public do not know much about the existence and role of insurance brokers in insurance business. Indeed, some mistake insurance brokers to be stockbrokers. What are brokers doing to make themselves popular in the market so that the masses will understand your roles and buy their insurance through you and avoid facing the challenges they face most times in getting their claims paid when risks occur?

The insurance brokers are doing a lot in this regard through their umbrella body, the Nigeria Council of Registered Insurance Brokers (NCRIB). We have been placing newspaper adverts, radio gingles even in televisions we have been doing a lot to sensitise people on the relevance of using insurance brokers in insurance business.

Myself I have featured a number of times in such programmes on behalf of NCRIB. The last one was on Niger FM.

I featured in their life programme. People were phoning in, asking questions about insurance and I responded to all of them. Also almost every week, NCRIB sends one professional or the other to feature in similar programmes and enlighten people on insurance. So a lot is being done.

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Casmir