Home Insurance Digest We settled claims in excess of N300m in 2014 —NAIC

We settled claims in excess of N300m in 2014 —NAIC

Since his assumption of office in March 2014, the Managing Director of Nigerian Agricultural Insurance Corporation [NAIC) Bode Opadokun has been carrying out various structural reforms in the Federal Government owned agricultural insurance company. In this interview the NAIC boss spoke on a wide range of issues including the deployment of ICT to drive the Corporation, settlement of claims and generation of premiums under the new regime, among other sundry issues in the insurance sector. CHRIS EBONG was there. Excerpts:

I want to start with the computerisation of your operations in NAIC. It was one of your mandates on assumption of office. How far have you gone in this regard?
Thank you. What we believe is that a journey of one thousand miles starts with a step. It is one thing to conceive an idea; it is another thing to implement it. The good thing about us is that we don’t just conceive an idea, we also execute it. If there is anything that has really worked for us, it is that we are doing as much as we talk. And that is a good thing that is different from what happens sometimes in an organisation.
In the area of the ICT, we have advanced. We started from the understanding the business process. We brought in a consultant to handle things for us. l always say, we are the users of products, we are not technical persons. We don’t have the expertise to determine this software and other equipment that are okay for us. What has been happening in the past is that people make use of what is available and not what they want, for they don’t have the technical knowledge. For us not to be embarrassed or do a wrong investment, we decided to take the pain to bring in a consultant, who really understands the technicality of software usage. It started from understanding our business process, we now invited different vendors who made presentations. So, we identified the best software that offers solutions based on our own business process. The consultant is not a seller of any software. His responsibility is to serve as a consultant, as he guides us to get what we actually needed.
Though, he did not do it single-handedly, he worked with the executive committee for the ICT project as well as users. One thing is for the executive to select a software, what happens often is that people that make use of this software are the users. So, the main users were part of the selection process. We have about 28 staff who were involved, who were users, including six executive committee members. I was the chairman of the committee. We went through the process and have a clear understanding of what we wanted before we got the software. Another good thing about the selection; it gave the users the opportunity to have a say which has helped us to get their buy-in of the usage of the software.
The implementation is fully on ground. In the next couple of months, we believe we would have finished data transfer. Data transfer is just what we started. They have done the installation. The necessary security software we need to put in place is being reviewed. The training on the part of the staff will start in a couple of weeks. We have selected about 10 staff. For the data transfer, that one started on Monday and it is an on-going thing. As time goes on, in the course of its usage, we will be able to see some of the things to amend and correct. But before the end of this year, it will be ready for use.
In practical terms, how does this deployment of ICT impact on the well-being and welfare of Nigerian farmers?
Yes, if there is anything that is expected of us, it is not just to settle claims. It is to settle claims and settle them promptly. The essence of bringing software is to enhance turn-around time. And also to have an error-free kind of data. There is no way you can compare things done manually and things done with the use of technology. It is going to provide accuracy of data. This will also help us as an institution to analyse the portfolios we are managing. It will impact positively when we are designing other future products that will meet the farmers needs.
And we also believe that in this age of technology, it is not even a selling point to say that your systems are computerised. It is taking for granted that your systems should be ICT driven. Don’t forget the fact that in terms of the number of farmers, we are dealing with a lot of people in micro insurance products. In signing policy, the sum assured could be N5million. This single policy could have about 200–500 farmers under the cooperative scheme. What we have been doing is to maintain a single document. But going forward by the time, we have put ICT into use, the list of all cooperative members will be identified. Whether we want to know the kind of crops that these farmers do, their locations, what is the term ratio, we will know and it will help us to do a proper analysis of our portfolios.
Have you started the implementation of the insurance component of Growth Enhancement Support [GES] Scheme? If yes, how has it been?
Yes, we have started. This is a very good question. It is something that gives me joy. We are not just conceiving ideas but we are also implementing such ideas. The good news is that we are able to do a pilot scheme of the GES insurance scheme in nine States. We are doing it with “Planting with Peace Programme[PPP]. Nine States actually participated during the dry season. The projected number of farmers who participated would have been about one million. I think, the figure we have is about 450,000 farmers participated in that pilot scheme. Out of which, about 8 per cent of these farmers bought our policy. About two weeks ago, we had 31, 000 farmers that bought our policy. We are still doing the analysis. I am sure that at the end of our analysis, it will not be less than 10 per cent of the farmers.
What do farmers stand to benefit under the scheme?
As I mentioned before, it is crop insurance that we sold. We sold it via the cell phones. That is, we attach our insurance policy to each of the bag of fertilizer the farmers buy. We made it voluntary for farmers. It is not compulsory for them. We just sensitised each of these farmers in each of the State of the Federation in conjunction with the States Ministry of Agriculture and Directors of Federal Ministry of Agriculture and Coordinators of GES in each of these States.
We educated farmers and agro-dealers on the importance of what we are doing. Thereafter, we used radio jingles in local languages to educate farmers. We explained to them what insurance is all about. We cover the risks of flood, fire, lightening, pests and diseases on the farm land. So for this planting season, any farmer that incurs loss arising from what I have mentioned will get a minimum of N20,000 compensation upon the payment of N500 as premium for each bag of fertilizer.
When do you intend to extend it to all states in the federation?
Our spread is dependent on the GES wet season implementation. Since the scheme was tailored along the redemption of fertilizer via the GES, what we are going to do is that for every season that the GES Scheme will take effect, our insurance products will always come in. As soon as the time table for the wet season is in place, we will start. That is why we will continue to do sensitisation in all the six geo-political zones in the country in their local languages. It is not a product that we are forcing down the throats of farmers, rather it is a voluntary cover we are providing for farmers who are interested. If we make them to understand the benefits, they will embrace it.
The Minister of Agriculture said he had directed NAIC management to carry out crop insurance for five million farmers across the country in 2015. What are the measures you have put in place in a bid to realise this onerous task?
What we are doing currently is crop insurance. The target is something that is doable based on the level of work that is on ground. In the last wet season farming, 8.5million famers participated under the GES programme. Unfortunately, there was no form of risk management or insurance for them at that time because it was still at the conceptualisation stage at that time. This idea of selling insurance along with fertilizer was conceived in the early part of last year. I assumed office in March 2014. The idea came up in May/June. So most of the things we were able to do, we did them before the start of dry season farming. But the mandate that was given to us is that at least 50 per cent of farmers, which today is in excess of N10million to register in the scheme. That is why I said, for the next season, we are going to sensitise farmers about this available product. Such that when they are taking their fertilizers, they are also taking their insurance policy which will guarantee them a compensation of N20,000 upon the payment of N500 for any loss arising from flood, fire, lightening, pests and diseases.
In the last one year, from January to December, how much were you able to rake in as premiums and how much did you pay as claims?
You know that our audited accounts are not ready yet. But from the records we have, we grew by about 18 per cent in terms of premiums. The total premium generated in 2014, we have surpassed it by the first quarter of this year.
In 2014, we were above N1billion premium income, what we did was in excess of N1billion. In 2013, all that we did was N878million. In the settlement of claims, we don’t have the figure yet. But we have done the excess of N300million in terms of settlement of claims in 2014.
Following the recent outbreak of Avian Influenza in some States of the Federation, you had discussions with Poultry Association of Nigeria [PAN]. What was the outcome of such meetings?
Yes, the Avian Influenza was an unfortunate incident. It caught many people unawares, considering the fact that we witnessed such outbreak not more than five years ago. Unfortunately, most of the people that were affected did not have insurance in place. Some people that have, do not have Bird Flu extension in their policies. Because Bird Flu is not something that was really available before. Following its outbreak, we have been able to approach some insurance organisations which have agreed to extend the scope of cover to bird flu with payment of additional premium. What we do in the course of selling our insurance policy, is to educate these farmers on the available products that we have. We have the standard cover for poultry. We also have one that extends the scope to take care of Avian Influenza with the payment of additional premium.
This informed our going out to educate poultry farmers because of what we experienced in recent time during the outbreak of bird flu. One thing that we did in terms of settlement of compensation, because we were part of those that designed the compensations for each of the affected famers. It is based on our own experience in the settlement of claims. We were able to do analysis taking into consideration of the type of chickens that were involved, the age, as well as the location.
Lastly, by the end of 2015, what should the Nigerian farmers expect from you in terms of achievements?
First of all, what we set out to achieve this year is to increase the level of our penetration. We intend to cover a lot of farmers. It will be further more than what have currently.
Currently, less than five per cent of farmers are assured? How do intend to scale this figure?
Yes, we are targeting about five million farmers under the GES programme. By this, we would have exceeded 20 per cent. We also take cognizance of the fact that not every farmer registered under the GES. There are some that are just operating on their own. Under the registered ones, we have over 10 million farmers. We will reach about 50 per cent of them with our insurance policy. If we are able to do this, we would have achieved 20 per cent of those who involved in one form of farming or the other. We will then say this is an achievement, we have been able to do this. In terms of micro-insurance development, we would have added to the growth of insurance industry. We will use the avenue to make people to be insurance literate. By so doing, we would have made them to understand how insurance works. By this, we would have developed the awareness of insurance culture in the country.

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