RegencyNem Insurance Ghana Limited: Customized Insurance Solutions in Ghana

Bode Oseni gives an overview of RegencyNem Insurance Ghana Limited. The company emerged in September 2016 following a successful merger between Regency Alliance Insurance Ghana Limited and Nem Insurance (Ghana) Limited in order to meet the National Insurance Commission’s requirement to increase the capital base of insurance companies in Ghana.

Interview with Bode Oseni, Managing Director of RegencyNem Insurance

Bode Oseni, Managing Director of RegencyNem Insurance

What is your assessment of the insurance sector in Ghana? What are the latest trends?

The insurance sector is growing, it is supporting the economy, and there is a lot of scope. Although, we have been experiencing some unethical market practices. We have rate undercutting which is inappropriate pricing of risk. Risks are not appropriately priced so when there is a loss you find it difficult to meet your obligation because you are not charging commensurate premium in the first place. We have a series of unexplainable discounts which further reduces the premium income. All this is in a race to attract more clients. It is not helping the industry and we are hopeful that as the opportunities open up and more businesses are in the economy, these things will become things of the past. The sector will really grow, particularly in the specialized sector which is oil and gas. There is quite a lot of potential in that space. Ghana has been lucky enough to find some oil and the finds are quite enormous which we can see by the fact that new players are coming into the industry. ExxonMobil has just signed a 3 billion contract to drill one of the offshore platforms. Another player has joined in, bought over from an existing European oil and gas company called Ace. All this shows that there is a lot of space in that sector. With the right kind of regulation and government policies, the sky is the limit.

Is oil and gas one of the major sources of revenue you see in the future for an insurance company like yours?

Yes. We have been agitating that they should open the space in the oil and gas business. The way we are currently practicing, we are not utilizing the full potential of companies. Individual companies should be allowed to participate in that space and together with their reinsurance they can grow their capacity, get training from their reinsurance, and grow their space. Your reinsurance is your backbone and if you have a solid reinsurance backbone, you can grow with that. For example, this year, Lloyds might say you can take 20% and see how it goes. If you are lucky, there will be no loss and then you move onto 30%. Or if there is a loss, maybe you stay at 20%, maybe it was just a bad year. But you have a backbone, you have someone backing you up. The backbone is not only in terms of capital but also in terms of technical knowhow. That arrangement is a win-win situation.

How do you attract this type of insurance company?

We provide quality service delivery and prompt claim payment. We know that we all sell the same products and the only way to distinguish yourself is your distinct service in terms of documentation, claims payment, and after sales service.

We do this through reinsurance. For instance, in a country like Niger, companies pay directly to the market, but in Ghana, we have a pool. It is a bidding process. The bids are open then you go and you bid in conjunction with your reinsurance. The reinsurance will know what they can absorb and they look at your risk, study it, and give you a percent of the risk to back you up. From 30%, perhaps your retention would be 1% or less. But the fact that it is going through you, you are learning, building capacity not only in terms of money but in training and expertise and knowhow, means that you are growing. The following year, you could take a larger portion and that is how it grows. In that market there is usually a consortium of insurers. They take only a portion, not 100% of it. The good thing about that is that you are gradually growing along with the market and with that there will be a lot of capital retention in the country. For instance, with the current system in Ghana, at last count, the pool could not even take on 2 or 3% of the total, about 98% was seeded out. This is called capital flight. If the space is opened, not as much would go out because individual companies with their reinsurers would have come in, underwritten the risk, supported by a sound insurance background, and when a claim comes, they would have paid and then grown. There is room for growth.

What are your competitive advantages compared to other insurance companies?

We provide quality service delivery and prompt claim payment. We know that we all sell the same products and the only way to distinguish yourself is your distinct service in terms of documentation, claims payment, and after sales service. Continued dialoguing with your clients after you seal the deal, finding out how the clients are coping, how the policy is faring, those are after sales services and those are what distinguish us from our competitors. We do a lot of things to exceed customer expectations.

What is one of your strengths?

If you want to draw pedigree from our major shareholders, the two companies are both well experienced in oil and gas in the Nigerian market. They have been participating for more than 20 years. They have gathered a lot of experience and expertise. We have really learned from that and we are also really building on that and it is helping us. From time to time, we get training from their experiences which we bring to bear in the Ghanaian market. It has really helped us to keep afloat.

Are you present in the automotive insurance sector?

Yes, in fact, it is every company’s largest portfolio because of the volume of vehicles that have been sold or that come into the country.

In which areas are you the strongest?

In the Ghanaian market, we are strong in automotive and we have quite a large portfolio of vehicles. Your largest portfolio would be where you have your largest strength.

What other products do you offer?

We have fire, engineering, marine cargo, marine haul. We have quite good expertise in marine, unfortunately, there are not many vessels here, but we are beginning to see a few coming in that are servicing the oil companies. The oil industry as a whole is helping to accelerate the growth of insurance by giving us the opportunity to provide auxiliary services. The oil industry is very broad. Apart from the majors, the other minors who are service providers, even the catering services, all need insurance.

What challenges does the sector or you as a company face to develop here in Ghana?

One of the major challenges is industry wide. In the automotive portfolio for example, for some time now, there has been a lack of will to have limits for compensation for injury, unlike in the francophone countries which have what is called the CIMA code which generally states level of compensation for level of injuries. Here, however, it is not standardized. Even the doctors sometimes do not even understand what you award in terms of the degree of injury. That has not been very helpful for insurance companies because some of these awards, even by the courts, are outrageous and do not reflect the level of premium you have collected. This is also backed by law. Unfortunately, we have a law that says third party injuries and death are unlimited in terms of compensation. Statistics have also shown us that there should be a standardized figure, it should not be left unlimited. Reinsurance limits third party injury and death to a certain amount, but direct insurers provide unlimited. The equation does not add up. The regulator should come out with a code. Even in Europe and internationally there is a standardized code that sets a level of injuries to a level of compensation, it is not just open. The earlier we do that, the better for the industry and the better for that portfolio.

What current projects are you working on?

Our current project is to continue to improve our service delivery through modern means and modern technology. That is why we are engaged in digitalization. We want to see how we can digitalize our sales channels so that we can be more efficient and more effective so that we can reach more people.

Project yourself into the medium term, two to three years’ time. What would you like to have achieved?

In the next three years, we want to be one of the top five insurance companies in the country. That is our focus and our vision and what we will work on.


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