When security for the performance of contract became rare and performance for contract was failing insurance companies became inescapable liable entities whenever a policy guarantee is in place. The risk was flagged and underwriters placed it on the risk avoidance schedule. To avoid what became a pure risk most insurers either stopped cover or placed grave policy conditions and high premium. In effect the policy was hard to come by. In the face of this Universal Insurance took a cursory look at the bond and guarantee policies re-engineered it and changed the rule of engagement. Eventually the company became a judge to the rescue.
The Managing Director/CEO Dr Ben Ujoatuonu said the company was able to make a good sense out of the policies by charting a new path to profitability and it is providing uninterrupted peace to all parties to the contract. He made the revelation at the yearly Annual General Meeting (AGM) of the Nigerian Association of Insurance and Pension Editors (NAIPE) held at Insurers House, Victoria Island, Lagos recently.
According to him, Universal Insurance is treading where others place caution because it adopted a new rule of engagement in two policies that were described as banana peel unqualified for cover. The success has made other insurers to make enquiries. However, their involvement he remarked, was a deliberate thought-out strategy from the beginning.
He bares his mind, “I was a thoroughbred underwriter that has a focus on bond and guarantee insurance. When I saw that a lot of insurance companies were running away from that business, we sat down, as a company, to look at what we could do to make this class of business profitable, we did it and it has been working for us. So one of the things you see is that when the new administration was inaugurated and government contracts started coming out, the simplest business that was coming out from there was bond and guarantee insurance and we took advantage of it and it is giving us the required value.”
He said the company has made steady mark in other areas; local travelers insurance and Keke PASS Insurance as notable products. The efficiency of these products he stated, is being aided by technology adoption, and digitisation of its retail operations from end to end.
He gives insight into what makes its operations different, “We have local travellers insurance and Keke PASS insurance where we are having collaborations with some groups and that is also driving these. The dynamics of our retail operations is digitisation, nothing more. We have a whole lot of web aggregators who are taking advantage of our products and we are using their platforms. What we do is that as long as you are an Application Programming Interface (API) technology-driven company, we do ‘hand-shake,’ from their aggregation points, you can buy our products and do everything and it ends up directly in our Enterprise Resource Planning (ERP) without human intervention. So our operations are digitally organised that is the strategy we are using for our retail.
“As of today, we are already discussing with a technology company on how to deploy Artificial Intelligence (AI) for our operations. We had presentations and everything ready for deploying AI from the beginning to the end both in assessment, in adjustment, in settlement, in everything concerning our business. We are digitally savvy in everything we do, without it we cannot drive our retail segment, Dr. Ujoatuonu said.
Speaking on the impact of the adoption of International Financial Reporting Standards (IFRS 17) on insurance operations, he said the process has been challenging, adding that operators are doing everything possible to adapt to it.
“The processes leading to full adoption of the model has been challenging to all of us in the industry. It has affected our operations and reporting. But that is the system that has come to stay,” he said.
On the business environment, he said “The cost of running the business now is about 150 per cent higher than what it used to be and there is nothing anybody can do.”
