Tunji Oluyemi, managing director/ CEO, Tespauruth Consulting Limited (TCL) in this interview with Modestus Anaesoronye reviews the insurance industry Market Development and Restructuring Initiative, assesses its performance and how it can be reinvigorated to drive the growth of insurance in Nigeria. Excerpts:
Tell us about your perception of MDRI and how far it has helped to reposition the insurance market?
The Market Development and Restructuring Initiative (MDRI) is a regulator-led market development Plan to expand the width and depth of Nigeria’s insurance market, launched in 2011 (shifted from the initial launch date of 2009). The market development initiative clearly is within the mandate of an industry regulator in a developing country like Nigeria, given the many market imperfections that are prominent in developing country economies.
Well, to be in a position to express informed opinions, the first thing to do is to research the aims and objectives of MDRI, which seems to be both a medium-term Vision Statement and Strategic Roadmap for the industry. Naturally, we made inquiries at the regulator (NAICOM), as well as other insurance industry sources. But first, a check was done on the NAICOM website for the MDRI document. The first shocker- the MDRI document meant to guide insurance industry growth and development was not available on NAICOM’s website! Other alternative efforts to obtain this crucial document came up negative.
This is surprising. What could have happened to the document?
Surprising indeed it is that a document supposedly agreed as a guide to action is not available for public/industry consumption on the insurance regulator’s website. But available on the website (on 2nd August 2019) is a set of Laws, Discussion papers, Regulations, Publications, Guidelines, and Circulars. It is not out of place to mention some of these: Guidelines- Approved Takaful Guidelines, Microinsurance Guidelines 2018; Regulations- Regulatory priority update on Statement of regulatory priorities, Brokers re-re-registration requirements; Discussion papers- Guidelines on State governments’ implementation of compulsory insurance, Mutual organisations’, community-based and non-government organisations’ micro-insurance agencies’ guidelines; Circulars- Nineteen of them, among which are : Directives on rendition of quarterly returns to NAICOM 29th September 2016, Annual quarterly regulatory returns template for Nigerian insurance industry, etc.
Really this is a concern for me. If there is a document that is meant to guide thought and action in the industry (a Strategic Plan) how come the document is not freely and readily available? It is like the Economic Recovery and Growth Plan (ERGP) not being readily available to State Governments, Chambers of Commerce and Industry, large industrialists like the Dangote Group, universities, and other academic institutions, etc!
It suggests, in the first place, that there is no ownership of MDRI, in the sense of the regulator who spearheaded its preparation taking charge vigorously of its implementation, and of the operators having a buy-in into the motivation for, preparation of, and the actualization of the Plan. The chances of the Pan succeeding in this circumstance must be slim, I think. The element of ownership of the Plan is absolutely crucial to its success. In addition, it does not seem there is any standing Committee on the lines of the Insurance Industry Consultative Committee (IICC) that is charged with carrying on an ongoing review on a regular basis to ensure that the ambitious targets and goals of the plan are really being actualized.
But what are the goals and strategies for market growth contained in MDRI?
In the absence of the original document, it is not possible to examine in depth its motivations, goals, and objectives. But I do recall that in terms of top-line income growth MDRI set a target of N1 trillion for the insurance industry by 2012. The industry gross written premium in 2018, in reality, was a minuscule N400 billion- a far cry from this ambitious objective. There was also a stated intention inter alia of revolutionizing sales channel development, by having not less than 14 classes of insurance agents- it is plain that the Nigerian insurance industry does not in 2019 have 14 categories of agents operating in it, etc.
Clearly, this cannot be all there is in the MDRI document.
Truly, these are not the only targets/performance indicators in MDRI, but that is what I can recall, in the absence of documentation. It seems to be the case that if the regulator and the operators give any thought to the guide-book that MDRI is meant to be today (August 2019), it must be only slight consideration, as MDRI clearly is not top of mind. In 2017, it was announced by NAICOM that MDRI was to be reviewed and updated. I looked for evidence to confirm that steps had been taken to give effect to this stated intention but in vain.
With the lapse of eight years from launch, and given the many changes the insurance industry has gone through in the intervening period, and in particular the disruptive, ongoing industry changes in 2019/2020, perhaps it is time to consider setting a new Vision and Strategy for Nigeria’s insurance industry that will cover a period no longer than 5 years, say from 2020-2024. It seems that MDRI has been given a quiet, private funeral! If there are indications that MDRI is as at the time of this interview (early August 2019) still being actively implemented, I would be pleasantly surprised to be corrected.
If you are correct in asserting that the Nigerian insurance industry effectively does not have emplaced an overarching vision and overall strategy, how will the industry go about updating MDRI, or crafting a new Vision and Strategy for Nigeria’s insurance industry?
We need to consider first of all some foundational matters that give support and effect to any Plan. First, there must be very wide consultation among all the arms of the industry. Whatever the forms the consultation may take, it is important to seek out the problems of the industry, especially to ascertain the root causes of the seeming industry stagnation, as well as suggestions relating to growth and supervision of the industry. This is what will ultimately ensure that there is ownership of the outcome of deliberations. In particular, the opinions and concerns of the market makers in each arm of the industry must consciously be courted as they, because of their size and clout, can make or mar the implementation process. The opinions and position paper(s) of NAICOM will, of course, carry much weight. A Vision/Strategy Paper cannot and must not be something exclusively written up on the laptop of a consultant, to the exclusion of the industry it is meant to serve, and then introduced to the operators after it is written up. That would be, from the onset, a guarantee that there would be no ownership of the Plan, from the industry arms. Secondly, in the course of writing up the document, there will be a necessity for a back-and-forth interactive process of consultation among the parties, clarifying all grey areas, or areas on which there is less than full agreement by all parties.
And then, there must of necessity be a Standing Committee drawn from all arms of the industry to carry on a comprehensive review of implementation, during the life of the Plan. But from what I said earlier, it is clear that my preference is for the crafting of a new document. It seems MDRI is a tired document, indeed, one that has hardly been implemented, or implemented with the required vigour.
You have not answered the question about how the insurance industry should go about crafting a new Vision and Strategy.
This is not such a huge assignment. You need to consider what a Vision Document/Strategic Plan should contain. A Strategic Plan would include, among other things: A Vision Statement and a Mission Statement, Core Values agreed to by all parties (buy-in), ASWOT (Strengths, Weaknesses, Opportunities and Threats) Analysis, An assessment of industry competition, customers, and trends, probably along the lines of Professor Michael Porter’s famed Five Market Forces, Long-term goals and objectives, Yearly objectives (broadly stated), and Action/Tactical Plans (in outline).
Can you provide us some more detail on the constituents of what might be a new Vision and Strategy for the insurance industry?
I probably could go into a lot more details, but such an exercise is probably one that is better left to Tespauruth Consulting Limited (TCL), the management consulting firm to handle. We may examine the details later, but the above serves as an outline of what we believe needs to be done. It certainly is entirely appropriate in this season that heralds in a new profile of insurance industry, to have crafted a new Vision and Strategy, that is in more in tune with the demands of the emergent Nigerian insurance industry, and in particular the insurance industry’s customers.
Tunji Oluyemi, managing director/ CEO, Tespauruth Consulting Limited (TCL) in this interview with Modestus Anaesoronye reviews the insurance industry Market Development and Restructuring Initiative, assesses its performance and how it can be reinvigorated to drive the growth of insurance in Nigeria. Excerpts:
Tell us about your perception of MDRI and how far it has helped to reposition the insurance market?
The Market Development and Restructuring Initiative (MDRI) is a regulator-led market development Plan to expand the width and depth of Nigeria’s insurance market, launched in 2011 (shifted from the initial launch date of 2009). The market development initiative clearly is within the mandate of an industry regulator in a developing country like Nigeria, given the many market imperfections that are prominent in developing country economies.
Well, to be in a position to express informed opinions, the first thing to do is to research the aims and objectives of MDRI, which seems to be both a medium-term Vision Statement and Strategic Roadmap for the industry. Naturally, we made inquiries at the regulator (NAICOM), as well as other insurance industry sources. But first, a check was done on the NAICOM website for the MDRI document. The first shocker- the MDRI document meant to guide insurance industry growth and development was not available on NAICOM’s website! Other alternative efforts to obtain this crucial document came up negative.
This is surprising. What could have happened to the document?
Surprising indeed it is that a document supposedly agreed as a guide to action is not available for public/industry consumption on the insurance regulator’s website. But available on the website (on 2nd August 2019) is a set of Laws, Discussion papers, Regulations, Publications, Guidelines, and Circulars. It is not out of place to mention some of these: Guidelines- Approved Takaful Guidelines, Microinsurance Guidelines 2018; Regulations- Regulatory priority update on Statement of regulatory priorities, Brokers re-re-registration requirements; Discussion papers- Guidelines on State governments’ implementation of compulsory insurance, Mutual organisations’, community-based and non-government organisations’ micro-insurance agencies’ guidelines; Circulars- Nineteen of them, among which are : Directives on rendition of quarterly returns to NAICOM 29th September 2016, Annual quarterly regulatory returns template for Nigerian insurance industry, etc.
Really this is a concern for me. If there is a document that is meant to guide thought and action in the industry (a Strategic Plan) how come the document is not freely and readily available? It is like the Economic Recovery and Growth Plan (ERGP) not being readily available to State Governments, Chambers of Commerce and Industry, large industrialists like the Dangote Group, universities, and other academic institutions, etc!
It suggests, in the first place, that there is no ownership of MDRI, in the sense of the regulator who spearheaded its preparation taking charge vigorously of its implementation, and of the operators having a buy-in into the motivation for, preparation of, and the actualization of the Plan. The chances of the Pan succeeding in this circumstance must be slim, I think. The element of ownership of the Plan is absolutely crucial to its success. In addition, it does not seem there is any standing Committee on the lines of the Insurance Industry Consultative Committee (IICC) that is charged with carrying on an ongoing review on a regular basis to ensure that the ambitious targets and goals of the plan are really being actualized.
But what are the goals and strategies for market growth contained in MDRI?
In the absence of the original document, it is not possible to examine in depth its motivations, goals, and objectives. But I do recall that in terms of top-line income growth MDRI set a target of N1 trillion for the insurance industry by 2012. The industry gross written premium in 2018, in reality, was a minuscule N400 billion- a far cry from this ambitious objective. There was also a stated intention inter alia of revolutionizing sales channel development, by having not less than 14 classes of insurance agents- it is plain that the Nigerian insurance industry does not in 2019 have 14 categories of agents operating in it, etc.
Clearly, this cannot be all there is in the MDRI document.
Truly, these are not the only targets/performance indicators in MDRI, but that is what I can recall, in the absence of documentation. It seems to be the case that if the regulator and the operators give any thought to the guide-book that MDRI is meant to be today (August 2019), it must be only slight consideration, as MDRI clearly is not top of mind. In 2017, it was announced by NAICOM that MDRI was to be reviewed and updated. I looked for evidence to confirm that steps had been taken to give effect to this stated intention but in vain.
With the lapse of eight years from launch, and given the many changes the insurance industry has gone through in the intervening period, and in particular the disruptive, ongoing industry changes in 2019/2020, perhaps it is time to consider setting a new Vision and Strategy for Nigeria’s insurance industry that will cover a period no longer than 5 years, say from 2020-2024. It seems that MDRI has been given a quiet, private funeral! If there are indications that MDRI is as at the time of this interview (early August 2019) still being actively implemented, I would be pleasantly surprised to be corrected.
If you are correct in asserting that the Nigerian insurance industry effectively does not have emplaced an overarching vision and overall strategy, how will the industry go about updating MDRI, or crafting a new Vision and Strategy for Nigeria’s insurance industry?
We need to consider first of all some foundational matters that give support and effect to any Plan. First, there must be very wide consultation among all the arms of the industry. Whatever the forms the consultation may take, it is important to seek out the problems of the industry, especially to ascertain the root causes of the seeming industry stagnation, as well as suggestions relating to growth and supervision of the industry. This is what will ultimately ensure that there is ownership of the outcome of deliberations. In particular, the opinions and concerns of the market makers in each arm of the industry must consciously be courted as they, because of their size and clout, can make or mar the implementation process. The opinions and position paper(s) of NAICOM will, of course, carry much weight. A Vision/Strategy Paper cannot and must not be something exclusively written up on the laptop of a consultant, to the exclusion of the industry it is meant to serve, and then introduced to the operators after it is written up. That would be, from the onset, a guarantee that there would be no ownership of the Plan, from the industry arms. Secondly, in the course of writing up the document, there will be a necessity for a back-and-forth interactive process of consultation among the parties, clarifying all grey areas, or areas on which there is less than a full agreement by all parties.
And then, there must of necessity be a Standing Committee drawn from all arms of the industry to carry on a comprehensive review of implementation, during the life of the Plan. But from what I said earlier, it is clear that my preference is for the crafting of a new document. It seems MDRI is a tired document, indeed, one that has hardly been implemented, or implemented with the required vigour.
You have not answered the question about how the insurance industry should go about crafting a new Vision and Strategy.
This is not such a huge assignment. You need to consider what a Vision Document/Strategic Plan should contain. A Strategic Plan would include, among other things: A Vision Statement and a Mission Statement, Core Values agreed to by all parties (buy-in), ASWOT (Strengths, Weaknesses, Opportunities and Threats) Analysis, An assessment of industry competition, customers, and trends, probably along the lines of Professor Michael Porter’s famed Five Market Forces, Long-term goals and objectives, Yearly objectives (broadly stated), and Action/Tactical Plans (in outline).
Can you provide us some more detail on the constituents of what might be a new Vision and Strategy for the insurance industry?
I probably could go into a lot more details, but such an exercise is probably one that is better left to Tespauruth Consulting Limited (TCL), the management consulting firm to handle. We may examine the details later, but the above serves as an outline of what we believe needs to be done. It certainly is entirely appropriate in this season that heralds in a new profile of insurance industry, to have crafted a new Vision and Strategy, that is in more in tune with the demands of the emergent Nigerian insurance industry, and in particular the insurance industry’s customers.
