“Pay Claims In Minutes, Recapitalize” – Elumelu Advocates At National Insurance Conference

Tony Elumelu, the Chairman of one of Nigeria’s largest quoted conglomerates, Transcorp – whose subsidiaries include Transcorp Power, one of the leading producers of electricity in Nigeria and Transcorp Hotels Plc, Nigeria’s foremost hospitality brand – has identified major transformative moves for the Nigerian Insurance Industry.

The power behind the emergence of Heirs Insurance Group as one of the fastest growing in the sector, since it started operation in 2021, advocates for the paying of claims in minutes to foster trust and instill public confidence in the sector.

“Insurance companies in the US and Europe can pay out claims in minutes with little human intervention.We should aim for no less! This is my charge to practitioners” Founder of the leading philanthropy empowering a new generation of African entrepreneurs, TEF (The Tony Elumelu Foundation) advocated at the 2023 edition of the National Insurance Conference where he was the theme Speaker.

The event is organized by the National Insurance Commission (NAICOM).

“How do you instill public confidence in the insurance sector, if the impression is that insurers do not pay claims on time?, Or that claims payments turn into a back-and-forth onerous conversation between the customer and the insurance company. Unprofessionalism must be excised, and we must bring discipline to the sector” the Chairman of Pan-African financial group providing corporate, commercial, SME and consumer banking services to more than 35 million customers globally, United Bank for Africa (UBA) elaborated.

Lack of trust over the payment of claims remains the age-long bane of the industry and a major contributor to what the extraordinary entrepreneur describes as “embarrassing less than 2% insurance penetration, in a nation of over 200 million people, struggling to survive, amidst the harshest economic realities”.

The champion of the economic philosophy of Africapitalism – which positions the private sector, and most importantly entrepreneurs, as the catalyst for the social and economic development of the African continent – also canvassed for the recapitalization of the sector to be a better value-adder to the nation’s economy.

“Today, capital requirements are set at 8bn for Life insurance and 10 billion for general insurance. With the devaluation of the currency, you are talking about USD 8 million, USD10 million capital requirements for an insurance company in Africa’s largest economy.

“How can an industry intended to ‘insure’ and mitigate the risks associated with economic growth of a country have such low capital requirements?” he provided insight and further clarification with the addition that ” Let me be clear, recapitalisation is not about increasing the barriers to entry into the industry. Gatekeeping is not the objective here. But we must ensure that the sector has the financial muscle and backbone to handle more complex insurance transactions whilst extending reach. That is the only way the industry can scale and expand operations out of Nigeria and into Africa!”.

As a solution, the philanthropist who sits on a number of public and social sector boards, including the World Economic Forum Community of Chairmen and the Global Leadership Council of UNICEF’s Generation Unlimited proposed that ” We should increase the capital base of Insurance Companies to N20Billion for Life and N30Billion for Non-life respectively, Review the dichotomy in Insurance authorisations/licences between life and non-life. Consolidated operators should have N50Billion. NAICOM should focus on substance and things that will shape the sector… catalytic actions. Insurance Brokers’ capital base should be increased to N1Billion “

The changemaker made proffered the solutions while speaking on the topic ” Redefining Safety: Insurance Solutions for Public Buildings and Buildings under Construction” .

He made his presentation on Monday, October 23, 2023, at the high-impact gathering that started on October 22, 2023.

The event with the Abuja Continental Hotel as the venue ends on October 24, 2023.