…Managing Director of Law Union & Rock Insurance, Mr. Jide Orimolade in this interview talks on the disadvantages of the local content initiative to the insurance sector. Excerpts
To what extent has insurers taken advantage of the local content initiative?
It is a good thing that the local content is in place and it is actually holding the industry together. The local content has given us a good mileage in the oil and gas business. For Law Union, engineering insurance is an area that we are reputable for and it is an area that we will continue to grow so that we can achieve our target at the end of the year. For the power plants in the country, we are the lead underwriters of the eight generating power plant across the country because we are competent in that area.
Government has not been spending much on insurance. Even total claims have not been paid for the group life insurance of government workers for this year. However, we believe that the government will do so before the end of the year. With the way the economy is, people are not spending much.
Despite all these, we have been able to attain a 10.5 per cent growth compared to last year. Our profitability has increased by about 19 per cent as compared to the last year.
Companies appear to be defaulting in claims payment, what is the reason behind this?
The issue on claims in other companies is as a result of not getting the underwriting process right.
When you sell a product to a customer and you did not inform the customer as to the conditions attached to the cover, when there is a claim, there are bound to be issues because the client will tell you that he is not aware.
We have identified this gap at LUR and we ensure that for every transaction, there is a breakdown of what he is trying to cover, things to be submitted for claims and so on so that when there is a claim, we will not have any issues.
What are your plans to grow your retail business?
We want to grow our retail business, first we want to acquire a software which will help our clients sit in the comfort of their homes and complete an insurance process. You will not need to come to the office for claims settlement. The only way an insurance company can advertise themselves is to settle claims on time. With the software, anybody involved in accident can take a picture of it, upload and send it to us.
The claims adjusters will look at it and in a short while, you are settled from the comfort of your home. So that others who are trying to insure can say ‘yes, insurance is working’. What makes an insurance company to report good bottom-line is the underwriting profit and investment income.
We try to settle claims on time and also adjust our rate so that in terms of underwriting profit, we will be able to make substantial profit. Also, we continue to do our investments in a way that at the end of the year, we will be able to make appreciable income in the bottom-line.