Deliver the Customer Experience: How do you create a differentiated customer experience?

Since each customer segment will have different preferences, behaviors and values, insurers must create a distinctive customer experience for each segment. In addition to tailoring marketing messages, insurers should enable a consistent omni-channel customer experience, because today’s customers expect to be able to interact with a business via one channel, and then re-establish a connection through another, with seamless transitions at all times.

For example, when Michael contacts a call center agent, that agent should be equipped with the information provided on the initial quote, as well as any additional demographic or behavioral information that might be relevant. The same is true for when David decides to purchase insurance—whether through the award-winning agent or a direct channel.

Having established a strategy for enabling relevant, personalized interactions with target segments, insurers must also use data and analytics to measure and track marketing effectiveness—especially with respect to products, price points and channel selection. This is particularly important for helping insurers adapt to changing customer needs and preferences. Finally, insurance leaders must support employees and agents in shifting their behavior, values and skill sets to foster stronger customer relationships. This includes sharing the principles of engagement marketing, empowering front-line workers to build trust-based relationships and making customer insights available to those who need it.

Know the Customer: Who is your desired customer?

Effective engagement marketing depends on insurers understanding their customers with a high degree of certainty. Most insurers already classify customers according to key demographic attributes, such as age, occupation and zip code. However, engagement marketing requires a more nuanced understanding of a customer that can be achieved with advanced data and analytics.

In addition, insurers must understand their customer’s definition of value. Price is just one motivator. For example, the Accenture Consumer-Driven Innovation Survey found that 92 percent of insurance customers believe it is important for their provider to not only insure risk, but also to offer advice to better manage risk. Furthermore, 40 percent are willing to pay more for personalized advice when purchasing insurance—on average, 9.6 percent more than they currently pay. To the right customer, convenience, customer service and the claims experience may be worth paying a slightly higher premium.

Engagement Marketing in Insurance: Cultivating customer loyalty

Through the Internet and other channels, insurance customers enjoy abundant access to information and choice of providers. But choices made are hardly carved in stone; access to information and the availability of new technology make it easy for consumers to switch providers with a few clicks on the keyboard or swipes on their phone. Welcome to what Accenture calls the “switching economy”—worth an estimated $470 billion annually in premiums.

Accenture research has found that 71 percent of customers are willing to purchase insurance online, and that almost half (48 percent) depend on comments on social media to make their insurance-buying decisions. Forty-six percent of customers with tablets and 37 percent of those with mobile phones have used these devices to interact with their insurers. In addition, customers are increasingly willing to purchase insurance from non-traditional providers, notably online service providers like Amazon and Google.

Despite this fundamental shift in buyer behavior and preferences, insurance companies have responded—at least in part—with traditional techniques: by increasing their marketing and advertising budgets. For example, in 2013, GEICO, State Farm and Progressive spent $2.6 billion in traditional advertising,2 and $110 million on Google keyword advertising for auto insurance alone.

We believe that marketing organizations must look to new sources of differentiation. Research has confirmed what many carriers have realized: the customer experience is the next battlefield. For example, Accenture research found that 74 percent of insurance chief marketing officers (CMOs) believe it is essential or very important to deliver an effective customer experience—but only 64 percent think they’re doing a good job.

And when we surveyed marketers across ten industries, two classes of companies emerged: high-growth companies and low-growth companies. Notably, 89 percent of high-growth companies are focused on the customer experience, compared to 60 percent of low-growth companies.4 Insurance companies and their agents must be prepared to thrive in this new world by providing a consistent, differentiated customer experience that gives existing customers more reasons to remain loyal and gains new customers who seek more than their providers can offer. How do companies win in this dynamic, customer-driven world?

Through engagement marketing: connecting with individuals, creating meaningful interactions based on customer preferences and behaviors, and interacting continually with them over time. To do so, insurers will need to establish an effective engagement marketing strategy, develop data and analytics capabilities to derive the necessary customer insights, and support agents as they foster ongoing customer dialogue. Winning companies will be those that shift from marketing at customers to engaging with them to build meaningful and lifelong personal relationships.

 

Leadway Assurance Company Limited, as part of its commitment towards bridging the financial protection gap and increasing the rate of insurance penetration in Nigeria, has launched a first-of-its-kind Mobile Office.

Leadway Assurance Company Limited, as part of its commitment towards bridging the financial protection gap and increasing the rate of insurance penetration in Nigeria, has launched a first-of-its-kind Mobile Office.

The initiative is directed towards educating and increasing the awareness of risks to which people and businesses are exposed and bringing insurance closer to customers as a way of managing those risks and protecting themselves against possible negative financial outcomes.

By deploying the Mobile Office, Leadway will enable direct access to insurance as a financial protection through next to door interaction, engagement and transactions. The Mobile Office is equipped with state of the art communication technology that allows the customers to be serviced real-time, end to end, wherever they may be. It is also environmentally friendly as it draws its power from solar while within remote areas.

Starting with Lagos State, the company will be activating market road shows across several Local Governments. The launch which was held at the Leadway Assurance Corporate Office, Iponri, Lagos kick-starts the activation events which will not only sell insurance products but also engage and educate the public on the need to insure their risks, ensuring happiness and peace of mind.

Commenting on the launch of the Mobile Office, MD/CEO Leadway Assurance, Oye Hassan-Odukale, represented by Executive Director, General Business, Adetola Adegbayi said, “As market leaders in the Nigerian Insurance industry, we have taken it upon ourselves to fulfill the task of reducing the financial protection gap within the country, which in turn increases on the low insurance penetration rate in Nigeria.

“ We have elected to bring risk protection and insurance education closer to the man on the street in Nigeria. The launch of this state-of-the-art Mobile Office is a testament to the execution of this goal. Our objective goes beyond sales; we intend to reverse the negative perception many Nigerians have of the insurance industry.

“With the huge potential of the insurance industry to positively impact our economy by safeguarding the enormous risks within the entire business ecosystem, and by creating wealth through investments, the industry is still way behind other financial and service sectors, contributing about 0.3 percent to the Nigerian Gross Domestic Product (GDP).

“Notwithstanding a population of over 180 million people about a third of which are within the insurable class, Nigeria is said to have about 5 million registered policyholders. This lack of density shows how largely untapped the Nigerian market is and the huge opportunities available to increase insurance uptake and the number of policyholders nationwide,” Adegbayi added.

The Leadway Mobile Office, further underpins its capacity to drive retail insurance in Nigeria, as residents can now easily purchase very affordable micro-insurance products such “Home Flexa” – which offers comprehensive personal/shop insurance coverage protection for home and belongings, including shops, personal accident and funeral expenses at just  about N13,000 annually. Other products available on the Mobile Office include the Leadway “Hospital Cash Plan” which provides the benefits for hospitalization from accidental injuries or illness for as low as N7,000 annually. The team will also sell the Leadway Third Party Vehicle Liability Insurance, basic Life and Life investment linked assurance and other Leadway retail insurance policies.

Insurance industry stakeholders are optimistic about increased growth in the industry if players in the sector could deploy resources to tap from opportunities in small and medium scale (SMEs)

Insurance industry stakeholders are optimistic about increased growth in the industry if players in the sector could deploy resources to tap from opportunities in small and medium scale (SMEs) industries as well as the creative industry.
They believe that these sectors are the growth base of the economy and need financing to grow and enhance its contribution to the gross domestic product (GDP).
According to the stakeholders, the opportunities are huge when you consider the number of SMEs, the volume of money exchanging hands in the creative industry, particularly the Nollywood, whose activities need a lot of insurance protection for risk management.
They however observe that for the insurance sector to take advantage of these segments of the economy, they need to build capacity, develop products that match the expectation of customers, and the sector will be on the path of growth.
The SMEs need to embrace risk management capabilities to grow and sustain their business, and that is where insurance needs to come in, according to Hope Jomgo, representing MD/CEO, NEXIM Bank,
The insurance industry needs to develop capacity, Jomgo said, saying, “You don’t insure a business you don’t know. Nollywood is s new industry, so insurers need to understand the business, risk exposures of the players in the business to be able to offer risk management advices.”
According to Jomgo, these are windows of opportunity that insurers need to develop to deepen penetration, and “This sector needs financing, but must embrace insurance to de-risk the different financing options available to make progress.”
He also emphasised on the need for insurance companies to build partnership with constituent bodies and association of actors and actresses to understand the business they do and be in position to offer necessary advice on risk management.
Emeka Anyaoku, former Commonwealth secretary-general, said it was important that SMEs in Nigeria should be the drivers of economic growth and development practice enterprise risk management, which includes risks transfer to traditional insurance companies with the advice of professional insurance brokers.
Anyaoku, who spoke at the Insurance Brokers of Nigeria (IBN) 62 anniversary and rebranding event held in Lagos, posited that the important role of insurance in promoting enterprise and development of any nation was not in contention.
He said at this stage of Nigeria’s economic development, it was appropriate to ask were the enterprises in Nigeria taking the optimal advantage of insurance to promote and protect their businesses.
“I believe that the general response is that, while multinational companies, large scale indigenous commercial businesses, some Federal and State Governments agencies embrace insurance, majority of the Small and Medium Scale Enterprises who need protection most are yet to proactively engage insurance to protect their resources and assets,” he said.
Ebelechukwu Nwachukwu, managing director/CEO, Zenith Insurance Company Limited, said the potential of growth in the creative industry was huge, and “We must come up with a product that meets the need of this segment of the society because they are exposed to a lot of risks in their business.”
She said this was a major avenue to deepen insurance penetration and grow the market.
A new national MSMEs survey conducted by the Small and Medium Enterprises Development Agency (SMEDAN) in conjunction with the National Bureau of Statistics (NBS) has revealed an increase in the number of SMEs by over 100 percent between 2010 and 2013.
The result of the survey as presented by SMEDAN and unveiled by the minister of industry, trade and investment, shows an increase from 17.2 million in 2010 to 37 million in 2013.
Lai Mohammed, minister of information, speaking ahead of the Creative Industry Financing Conference, held recently in Lagos, described the Nigerian creative industry as the ‘new oil.’
The feats Nigeria is recording in its creative sector, coupled with the potential in the country’s arts, culture, tourism and entertainment, indicate that it harbours a breakthrough for the nation, Mohammed said.
The minister noted that Nigeria could not afford to take the creative industry with levity, as it had become the cash cow for many other nations.
“The creative industry contributed £84.1 billion to the British economy in 2014. It also contributed $698 billion to the US economy, according to a 2015 report. So, Nigeria cannot afford to be left behind, hence, we are ready to explore and exploit the new oil,” he said.
According to Mohammed, the main objective of the conference is to take the industry into “a golden era of smooth access to short- and long-term financing, world-class management as well as local and international distribution.”

Risk Analyst Insurance Brokers MD Babington-Ashaye elected CIIN President

The Chartered Insurance Institute of Nigeria (CIIN) has elected Funmi Babington-Ashaye as its 48th President. The new President, a former Managing Director of Cornerstone Insurance and NICON, is the sixth female president of the Institute. Her investiture comes up on Tuesday, July 25 at the Intercontinental Hotel, Victoria Island, Lagos.

An accomplished practitioner and seasoned underwriter with over 30 years cognate experience in the insurance industry,  Babington-Ashaye started her insurance career with Royal Exchange Assurance Plc as an Insurance Superintendent in 1987 and later joined Cornerstone Insurance PLC as a pioneer staff in 1991.

Through dint of hard work and exceptional performance, she rose through the ranks and became the MD/CEO of the company within fifteen years. In that capacity, she brought her wealth of experience and creativity to bear on the performance of the company, which easily became the reference point in the industry. Through her sterling leadership qualities, she grew the turnover of the company by over 80 percent within one year and also successfully recapitalized the company.

In appreciation of her invaluable wealth of experience, professional acumen and visionary leadership, she was appointed interim Managing Director of NICON Insurance PLC by the Federal Government to assist in re-engineering the company to a going concern status pending the resolution of the impasse between the insurance industry, the regulator (National Insurance Commission) and the core investor. At the end of her tenure, the FGN specially commended her performance and indeed, offered to retain her as the substantive MD/CEO but she politely declined.

Winner of the Chartered Insurance Institute of London’s JC Lepine Prize Award, she is a Fellow of the Chartered Insurance Institute, London and Nigeria. She is also a Fellow of Chartered Insurance Brokers and Institute of Directors, Nigeria.

Author of a book titled Insurance in Practice: All You Need to Know about Insurance in Nigeria, Babington-Ashaye is the Founder, Managing Director/Chief Executive Officer of Risk Analyst Insurance Brokers Limited.

In a statement issued by the institute, Babington-Ashaye promised to reposition the insurance industry during her tenure. “During my tenure, I plan to rededicate myself to the creation of the required awareness that would re-position Insurance through education and public enlightenment”, she said.

Nigerian insurance companies saw an 18 percent increase in directors’ emoluments and fees last year, even as most insurance stocks languish at 50 kobo per share, or par value.

Listed Nigerian insurance companies saw an 18 percent increase in directors’ emoluments and fees last year, even as most insurance stocks languish at 50 kobo per share, or par value.

Directors’ are key management personnel having the authority and responsibility for planning, directing and controlling the activities of most firms.

BusinessDay’s analysis of the 14 members of the NSE Insurance Index that have released audited 2016 Full Year results, shows that on a cumulative basis, directors’ emoluments and expenses increased to N1.517 billion from N1.28 billion in 2015.

The NSE Insurance Index include; NEM Insurance Plc, Prestige Assurance, Wapic Insurance, Law Union and Rock Insurance, Cornerstone Insurance, Regency Alliance Insurance, Aiico Insurance, Axa Mansard Insurance, Continental Reinsurance, Lasaco Assurance, Standard Alliance Insurance, linkage assurance, Niger Insurance and Staco Insurance.

But 10 of the 14 firms in the index are trading at the N0.50 per share mark, with zero capital gains in the past five years, while six firms recorded negative retained earnings for the period.

“Directors pay has been agreed since the start of the beginning of their tenure,” said Moronfola Monsuru, an actuarial analyst.

“If these firms pay consistent dividend, share price will go up. There has to be increased demand for insurance. Government should enforce laws that will make insurance more competitive,” said Monsuru.

BusinessDay’s analysis of the data shows that executive pay rose for eight firms, fell for five and remained at the same level from the previous period, in one firm.

Even for firms like Continental Reinsurance (N1.30/share) and AxaMansard (N2.30/share) that trade above par, investors have seen their share price go nowhere since 2013.

Nigerian insurers have to navigate a tough operating environment, as weak regulatory framework, low awareness and public apathy towards insurance continues to undermine growth.

In addition to the aforementioned challenges, firms are faced with rising inflation, a weak naira and the first recession in 29 years.

The insurance sector’s Gross premium to GDP ratio of 0.4 percent in 2015 was well below that of South Africa (14.7 percent) and Malaysia (4.8 percent).

For the year ended December 2016, the cumulative gross premium written for 14 of the 15 NSE insurance index firms was flat at N135 billion, less than the gross earnings of many tier II banks in Nigeria.

These firms would have recorded a 25 percent drop in underwriting profit but for Aiico Insurance’s strong underwriting performance that resulted in an 86.40 percent increase in cumulative underwriting profit to N27.15 billion.

Combined net income could have also fallen 42.01 percent in December 2016 excluding Aiico’s 756 percent surge in profit to N10.15 billion that resulted in a 38.81 percent increase in cumulative net income to N16.38 billion.

Claims expenses for the 14 firms, meanwhile, rose for the period, due to increased filing for motor insurance claims that were hitherto ignored.

The cumulative claims expenses of the 14 firms rose by 6.70 percent to N48.15 billion, while underwriting expenses was up 11.10 percent to N30.27 billion.

The insurance firms are spending more in running offices, branches and top management, as total operating expenses increased by 17.70 percent to N38.81 billion, as at December 2016, higher than May’s inflation figure of 16.25 per cent.

While, the insurance industry is going through tough times, analysts are worried about the low valuation of insurers and they are suggesting a scheme of mergers and acquisitions to help shore up capital.

The 14 NSE insurance index firms have a combined market capitalisation of N93 billion or $304 million, less than the market value of Nigeria’s most capitalised bank.

South Africa’s largest listed insurer, Old Mutual, has a market capitalisation of $12 billion by comparison.

“You still have the top six insurance companies owning and controlling more than 60 per cent of the market and that means the other 50 companies are not doing as much,” said Kabir Okunlola, head insurance audit group at KPMG.

Cornerstone Insurance (-519 million), Law Union and Rock (-24.4 million), Standard Alliance (-13.87 billion), Prestige Assurance (-777 million), Staco Insurance (-4.97 billion) and Linkage Assurance (-231 million), recorded cumulative negative retained earnings to the tune of -N20.39 billion as at the end of 2016, the data shows.

Negative retained earnings, often recorded on the balance sheet as accumulated deficit, means the company has more retained losses over time than accumulated net income.

Aigboje Aig-Imoukhuede, Chairman of Wapic Insurance, during the KPMG Insurance conference for 2017, called for an increase in the capital base of insurance companies in the country to N100 billion.

Insurance regulator, the National Insurance Commission (NAICOM) has tried to address this through its Market Development Restructuring Initiative (MDRI) with ambitious plans to increase both gross written premiums and premium to GDP ratio to N1.0 trillion ($3.1billion) and 4 per cent respectively even though there is no specific date set to reach that target.

Continental Reinsurance Plc has recorded a 60 percent growth in profit after tax(PAT), from N2.92 billion in 2015 to N4.65 billion at the close of business in 2016.

Continental Reinsurance Plc has recorded a 60 percent growth in profit after tax(PAT), from N2.92 billion in 2015 to N4.65 billion at the close of business in 2016.  Its gross premium income was N22.4 billion in 2016 as against N19.74 billion in 2015, showing a 14 percent increase.

From the profitability, the shareholders received a dividend of 14kobo per share, which was 17 percent higher than 12kobo paid in 2015.

This was disclosed at the Company’s Annual General Meeting held in Lagos.

Ajibola Ogunshola, chairman Continental Re said the Company’s performance for the year 2016 affirms the resilience and consistency in achieving the strategic objectives and delivering financial returns to stakeholders.

He added that the Company’s vision remains to be the premier pan-African reinsurer.  “Ours is a permanent view on Africa, not a long, medium or short-term view. To achieve our objectives, we must continuously grow our balance sheet by raising capital from time to time so we can take advantage of the immense opportunities that abound across Africa.”

The Group generated its business from the six regions of Africa with 49 per cent of the business came from Anglophone West Africa, 18 percent from Eastern Africa, 9 percent from Southern Africa while the remaining 24 percent was from Central Africa, Francophone West Africa and Northern Africa.”

Femi Oyetunji, group managing director/CEO said, “After the successful execution of our five-year strategic growth plan (2011 – 2015) focusing on geographical spread, brand strategy, extensive human capital development and continued process strengthening, the Company has rolled out the next phase, Strategy Project Alpha 2020.

The project is to consolidate our brand presence, enhance our client services to guarantee sustainable growth and strengthen our already formidable multi-national talent pool for the benefit of our continent at large.”

He thanked the Company’s partners and shareholders for their continued patronage and loyalty while assuring all the stakeholders of the Company’s continued commitment to excellence in performance and making a difference in the insurance industry for the benefit of all.

Continental Reinsurance is celebrating its 30 years on the continent having started its operations in 1987.