What insurance industry do you want to inherit as a young professional?
In the Insurance Governance Leadership Network Summit, November 2015 in New York most of the members supported and said, “Insurance has not been able to come out with new ideas and being innovative historically. The industry has not considered innovation as their main competitive edge.” Furthermore, the industry has to consider innovation to avoid disruptive forces. The big questions are, can the Ghana insurance industry be disrupted? Who are the real competitors of the insurance industry?
The Ghana insurance industry is not as strong as it should be. Insurance penetration is still very low in Ghana and across the West Africa region. The confidence and trust of the insuring public are very low in Ghana and the other West African countries. Industry players have considered various ways to improve the penetration rate and increase the confidence and trust of the insuring public as well.
In all these, little improvement could be seen. The West African Insurance Companies Association held its annual training conference in Accra from the 18th to the 20th of November 2018. This conference brought almost all the insurance companies in the five (5) West African Anglophone countries together. These countries include Nigeria, Ghana, Liberia, Sierra Leone, and the Gambia. As part of its program, they allowed the young professionals to deliberate on the kind of insurance industry they would like to inherit from their predecessors. The panelists were well represented by each country. Their delivery were almost the same. This simply shows that we as Anglophone countries in the West Africa sub-region are all facing similar challenges in the industry. This is a problem but at the same time a big opportunity because we can all share ideas on how to resolve these challenges easily. Some of the problems the young professionals listed include the following:
- They all talked about the malpractices in the insurance industry which include undercutting or the underpricing of the insurance premium and the payment of unapproved commissions. They believe this is affecting the insurance industry across West Africa greatly. It is affecting the liquidity and solvency of most companies because they do not charge the actual premium. Most companies do not make underwriting profit because they charge below the right minimum premium.
Most companies are not able to meet their obligations to shareholders and at the same time policyholders. If these two obligations are not met, then what are we in this business for? This has also lead to the low penetration of insurance. The penetration across these five (5) West African countries is less than 2%. The insuring public and shareholders are all beginning to lose trust that is if they have not already lost it in the industry.
The young professionals think this should stop to make the industry better. They believe the insurers should begin to compete on service delivery rather than price. They believe innovation should be the key for the insurers. Insurers should concentrate on product innovation, customer service innovation, human resource innovation, market innovation, technology innovation and add effective cost management.
They believe, insurers should know who their real competitors are which include banks and telecommunication companies who can offer one insurance product or another. They should see how best to deal with these companies.
- They also raised the issue of the older generation making themselves available for the young ones to tap into their knowledge and experience. In the next ten (10) years, very dynamic, knowledgeable and very experienced insurance gurus who have held this insurance industry especially in Ghana for many years would be faced out because of their age. The likes of Mr. Paul Quarshie, Mr. Kwame Gazo, Mr. Ampaw, Mr. Afriyie, Mr. Ofori Kuragu, and Mrs. Lynda Odro, to mention a few would be faced out. The young ones pleaded if possible, the leaders should properly mentor the young professionals. The young ones believe, aside from the academic qualifications, they need the knowledge and experience from these people.
- The young professionals also asked for one critical issue that has to do with the harmonization of regulations across the different jurisdictions of the WAICA member countries. This will would open up the market and increase competition for better service delivery.
- They also raised the issue of risk retention. The capacity of the insurance companies and reinsurance companies needs to be raised to be able to retain more risk and premium to help develop the industry.
- Again, the young professionals would like the industry to concentrate so much on the new emerging risks like cyber risks and the development of robots. Cyber risk’ means any risk of financial loss, disruption, or damage to the reputation of an organisation from some sort of failure of its information technology systems. The young professionals would like the industry to begin designing products to meet these emerging risks.
But in all these, the question is, what are the young professionals doing now to help the older generation to leave them with the kind of industry they would like to inherit. The young professionals roughly could be over 80% of the working force. This means they can have a lot of influence now to determine the future they want. The truth is that most of the malpractices are done by young professionals.
If this is the picture of the industry we would like to inherit, then let’s put in all our effort and safeguard it now or never!!!!!!!
Ref:
https://www.theirm.org/knowledge-and-resources/thought-leadership/cyber-risk/
