Yemisi Izuora
Experts in the insurance sector have called on business operators to embrace insurance to be able to sustain operations especially in a volatile economic environment.
They spoke at a Webinar hosted by Coronation Insurance Plc.
At the event they identified insurance as key partner for business success in challenging environment.
The Webinar offered another rare opportunity for industry operators to examine the critical role of insurance in helping businesses survive and prosper, especially in challenging economic environments.
Introduced by Olamide Olajolo, CEO of Coronation Insurance Plc, the panel shared cutting-edge thoughts from Henry Mascot, Co-founder and CEO at Curacel; Tochi Ginigeme, Founder of Mesh Venture; Anthony Olasele, Head of Corporate Sales at Coronation Insurance Plc; and Vincent Ezeora, Head of Sales and Marketing at Emirates HealthConnect24x7 Limited.
The webinar was expertly hosted by Wole Famurewa, CNBC Africa Anchor, with concluding remarks from Adewale Adeneye, Executive Director, Coronation Insurance Plc.
Kicking off with a survey of challenges currently facing businesses in Nigeria, participants highlighted the relevance of insurance in helping enterprises manage inflation, foreign exchange constraints, and talent flight while protecting assets, processes, and outcomes essential to keeping businesses going in the face of volatility and disruption.
In short, far from being a luxury to dispense with in tough times, insurance was, in fact, a key driver of survival and success in challenging markets.
The key takeaway was not to give up. Up until the COVID pandemic, global growth was steaming ahead, recording the emergence of more people from poverty and the highest levels of longevity than ever before in human history. While the pandemic, subsequent geopolitical conflict, and even wars threatened these gains, the panel believed that supply chain disruption and the global tilt to on, near, and friend-shoring currently driving up the cost of doing business globally could be overcome.
In this more complex environment, the ability to manage risk and survive through volatility was key to both growing revenue and cutting costs – the two most basic business imperatives.
Running a business in today’s environment was likened to pushing a massive ball up a hill.
In this analogy, insurance was the critical element that helped businesses prevent the ball from rolling backward. Covering simple things like fire, flood, illness, accident, and tools and technology, or taking out more complex covers for business interruption cover, can prove critical to the survival of a small business, especially when a business is unable to perform and can’t generate profits because of volatility or other risks beyond its control.
Technology is also proving critical in making insurance both more accessible and affordable to SMEs as well as ordinary people in Nigeria.
By deepening insurance penetration in the county, technology has become a critical driver of broader financial inclusion, extending the longevity and resilience of smaller businesses.
Technology, and especially artificial intelligence, are also transforming the evolution of insurance in Nigeria away from one-size-fits-all off-the-shelf insurance products to individually tailored policies informed by the particular needs, goals, and risks of individual businesses.
In an increasingly digitally interconnected world where many Nigerian knowledge or service businesses operate across the planet, cybersecurity, proprietary intelligence, and directors’ liability covers are increasingly relevant to small businesses – right from start-up.
Greater insurance penetration also builds resilience among communities and the broader economy.
Societies with higher levels of insurance are better positioned to manage risks, shocks, and disasters, like climate change, pandemics, or global economic crises.
In addition to providing the capital to keep businesses going when crises hit, insurance also promotes the exchange of information, building the data and knowledge banks required to anticipate, manage, and spread risks.
While in the past paying annual insurance fees was beyond the reach of small businesses, today technology also makes it possible for even the smallest business to tailor covers with monthly or quarterly terms that suit limited cash flow and earnings profiles.
As such, all players in Nigeria’s insurance sector focus heavily on education.
To increase the penetration of insurance and create a more resilient economy, the industry is using technology to explain the benefits of insurance to even the smallest businesses.
Nigeria’s insurance sector is also working hard to demonstrate that insurance works. Coronation Insurance, for example, invests heavily in a public education campaign relying on technology to get the message to ordinary Nigerians. This includes a public webinar series of which the recent discussion of business insurance was part.
Also, trust was identified as a key element driving perceptions and the use of insurance.
The Nigerian insurance industry currently pays about N3 billion in claims annually to hundreds of thousands of businesses across the country.
Increasing the number of businesses covered by the country’s insurance net would dramatically increase the resilience and performance of the local economy and further entrench trust in the sector.