- Demand for riots and civil commotion extensions is rising
- Competition for market size has continued to put the industry on the wrong side of history
- We are rebranding, repositioning Royal Exchange to take its rightful place
- We want to reposition the company as a market leader in all key business lines
- We intend to drive our business digitally and expand our retail lines
There’s a fever-pitch push to December 31, 2020, when the first phase of a recapitalisation exercise in the insurance industry, being superintended by the industry regulator, National Insurance Commission (NAICOM), will berth for a scorecard. Beyond recapitalisation, a number of matters, including COVID-19 pandemic and the recent #EndSARS protests, have combined to change the dynamics of business and how corporates, including insurers, will handle their businesses and dealings going forward. In this interview with Business A.M.’s affiliate, FAVOUR NNABUGWU of patomabusinessonline, BENJAMIN CHIZEA AGILI, Managing Director/CEO, Royal Exchange General Insurance Company, speaks to this issues and more; and he tells us how his company is shaping up for the future, especially one of digitalisation and where brick and mortar operations will be taking a back seat. We serve you excerpts here:
How is Royal Exchange General Insurance Company doing right now?
Currently, we are doing well in terms of all ratios and financial indicators. As at third quarter we are growing reasonably in excess of 12 percent over the previous year, we are also ahead of budget in terms of all indicators to our financial statement, in terms of profit before tax and all other ratios. We are also very excited with our claims ratios, combined ratios and all others. I can only say that we are doing very well.
But normally we are like Oliver Twist, in that we still want to be very bullish and we still continue to do more to grow our business. And that is not to take away the fact that it has been a difficult year in terms of the challenges faced in the insurance industry, the impact of COVID-19 on the general market and recently the #EndSARS protest and the associated collateral damage.
Definitely, as a reputable and as a big company, we are not going to be left out of the negative impact of the destructions that followed the #EndSARS protest, but we are prepared.
Do you have any claims arising from the #EndSARS protest?
Yes. We have some of our corporate and retail clients that have registered claims but we are waiting for their documentation and the necessary adjustment and authentication of those claims. We expect particularly those business premises that had riot and civil commotions extension, as part of their insurance policies to make claims and we are more than able to attend to such.
However, we have also recently been experiencing a lot of demands for riots and civil commotions extensions, which I believe the insurance industry is also addressing and finding ways to adjust our rates and pricing mechanisms. This is because it is becoming a major issue in our market and so we have to price it appropriately and that is what we, as a company, are doing.
You will recall that almost this time last year, we had a similar incident with the xenophobic riots and we had a massive destruction in which most of the major retail outlets were destroyed and the insurance industry came out and paid substantially. And if it becomes a recurring decimal we have to look at it and see how we can be able to accommodate this risk effectively in our business.
How digitally prepared is Royal Exchange?
Currently, we are undergoing a digital transformation. We have recently acquired a new business core solution IES and we are still at the implementation stage, which is an ERP compliant solution from end to end and we are excited with it; and what we intend to do, just like the name implies, digital transformation, we intend to drive our business digitally and expand our retail lines.
Our customers, our marketers, especially our retail customers and our personal line customers should be able to shop from the comfort of their homes or wherever. If you have a tablet or smart phone or laptop, you should be able to start a transaction and complete the transaction from the comfort of your home.
So, Royal Exchange General Insurance Company (REGIC) wants to be a company that is fit-for-purpose and we want to continue to reinvent ourselves. Any particular company that has failed to reinvent itself and adjust to the changes that are happening in the market will definitely not be fit for the period we are in.
Many insurance executives and experts are of the view that there is no need for recapitalisation at this time. What is your take on this?
As a matter of fact, the board of Royal Exchange General Insurance Company, (REGIC), has taken the National Insurance Commission (NAICOM) recapitalisation guidelines very seriously and even before the deadline was issued, the board of REGIC has been working on the recapitalisation, because the board believed this is the right direction and the right way to go and our perspective to it is that it will create a more stable industry and the industry will be better.
The board feels confident about it because of the socio-economic challenges Nigeria is facing in terms of where the recapitalisation money is going to come from, it poses a lot of challenges, but we are equal to the task. And all the companies concerned are pushing their own strategy and I can assure you that REGIC will not be found wanting in that respect.
There is still a lot of rate cutting in the industry. How low can Royal Exchange go on rate?
It is the duty of the companies to set their risk appetite and set their risk target. The challenge is a national challenge and looking at the industry you will find out that the competition for market size has continued to put the industry on the wrong side of history.
So, it is a challenge but it is global challenge, it is not a challenge that one company can handle on its own. The individual companies craft strategies based on what the environment throws up, the challenges that are within the environment but we set our own risk appetite and we try to handle it our unique way. We are not doing or underwriting business at all cost. We will write those ones that we think will be proper for us to write.
Do you believe the industry need a lobby group to push their issues at the National Assembly?
I know that the direction we have championed over the years is that Nigerian Insurers Association, (NIA) should speak for the industry and NIA should be the champion for the industry and that is how it had been for a very long while. Getting an independent lobby group or a special lobby group, I don’t know about that, and I don’t think I will want to contribute to that.
What is your plan for Royal Exchange?
Royal Exchange is a company that is undergoing a lot of changes and reinvention. As you are aware, and as I have said earlier regarding the recapitalisation, we want to reposition the company as a market leader in all key business lines, in terms of gross premium, in terms of returns on investment, in terms of profit after tax.
Royal Exchange as you are aware, we are a top insurance company in this market and we are rebranding and repositioning the company to take its rightful place, we are very solid and that is where we are going to.