•Chief Rowland Ijeoma Madiebo, former Managing Director/Chief Executive Officer of Intercontinental Assurance Company Limited, a Chartered insurer, a one time representative of Nigerian insurance industry at the West African Gas Pipeline Insurers consortium and currently Executive Chairman, RIM Insurance Brokers Limited, an emerging broking firm with the mission of bringing insurance services to the door step of all Nigerians is striving to establish an arrangement in the industry which borders among others on professionalism. In this interview with EDET UDOH, Chief Madiebo speaks on issues concerning the industry as well as his intention to use RIM insurance Brokers to transform the industry. Below are the excerpts:

Who is Chief Rowland Ijeoma Madiebo?

Chief Rowland Ijeoma Madiebo is the Executive Chairman of RIM Insurance Brokers Limited. I had been in insurance industry for quite some time starting from broking to management of insurance companies before settling for establishment of RIM Insurance Brokers. I was the former Managing Director of Intercontinental Assurance Company Limited before the industry recapitalization/consolidation exercise from where I retired.

What is RIM Insurance Brokers Limited all about and what services is it rendering?

RIM Insurance Brokers Limited is all about insurance services. Our mission is to deliver insurance services to the door-step of Nigerian. We identified the fact that apathy to insurance is borne out of lack of knowledge by the populace what insurance is all about and we believe that the nearer the services to the door step of every Nigerians, the better for the insuring public, the better for the insurers and the better for the industry in general. We are moving forward to educate Nigerians on why they should take up insurance. We are also moving forward to educate the insurers the need for perfection in their services. They must deliver services. They must deliver claim. They must make insurance products sweet when the policyholders’ premium requires their assistance. It is a contractual obligation, on occurrence we pay and we want to leave an arrangement where on occurrence any insurer we place insurance with, we pay to enhance the interest of the public to insurance products.

Sir, you are a Chartered insurer of the Chartered Insurance Institute of London, and have involved in the practice and development of insurance in the country for over 35 years, out of which 28 years had been devoted in the development of oil and gas as well as aviation insurance, please tell us your experience.

It has been an interesting experience particularly on special risk aspect, that is, oil and gas and aviation. Interesting in the sense that the approach of Nigerian insurance industry to special risk underwriting had been something of an ambitious position which we are finding difficult to give an interpretation to. The straight forward arrangement had been for business to come to an underwriter, you quietly make the reinsurance arrangement, and in case of claim your recover from your reinsurance you pay the claim as primary underwriter. But due to lack of capacity in our industry, individuals and groups had been trying to work out the best approach for effective participation in the special risk underwriting.

I have been at the forefront of devising various approaches which will make it possible for the local underwriters to effectively participate. Unfortunately it has not all worked out as I wanted it, but arrangement continues.

I happened to be a council member of NCRIB crossing over to underwriting and I become a council member of NIA and under each forum, I had seized the opportunity to enlighten my colleagues, enlighten members of the industry, rob minds together to see whether we could be able to devise an underwriting approach. For my own point of view I didn’t share the belief that we have the excessive lack of capacity as being orchestrated. What we lack is a decision to agree on how to handle the risk because it has been the issue of winner takes all. The lead underwriter to be in any of these accounts, we will start singing a different tune… And as long as that continue, we continue creating the impression that we lack capacity. Let’s look at the capacity we are talking about. When we inspected one of the large accounts in early 90s, we had what we called dual currency arrangement. We never envisaged a situation where when there is a log an operator in Nigeria will take 100 per cent dollar to reinstate. There is surely going to be substantial component of local currently handling.

So, we said thirty naira and seventy dollar arrangement. When there is claim 30 per cent will be in Naira, 70 per cent will be in dollar, the Naira aspect will take care of local outlets like labour, materials purchased locally, while the dollar takes care of plants and machineries which may need to be imported. We had in mind that with time we metamorphose to 100 per cent local currency. We are Nigerians we must trade with our currency. But all of a sudden the arrangement changed to 100 per cent dollar and became an in-thing. And any underwriter no matter their capital base getting up to give enough on their account will always be knocked –off with the fact that can we pay that man’s claim? We are taking of convertible currency. If you pay an operator in dollar and he needs to hire a labourer in Port-Harcourt, he will convert it to Naira.

If you pay in naira and the operator needs to import plant, he will convert it to dollar how had we translated sense into our underwriting approach? So, I am of the views that we had to go back to the drawing board and rethink and produce a blue print approach toward effective participation in this account.

With share capital of over $5 billion for each underwriter in this country, I think there is capability to substantial and particularly collectively as co-insurers meet up substantial parts of claims for these oil industry operators. Even abroad where we place the 100% some operators subscribe to the tune of point zero fiver per cent some point five at most even in those good days where values were low you see leaders taking more than 20 per cent. But back home, we are looking at the underwriters only when they can show capability to take 100 per cent of the account, which is wrong. Any underwriter that can effectively manage one per cent, two per cent, three per cent of that account is trying. He may not be the leader but he has added to building that capacity required.

Sir, you have been a member of various professional bodies including NCRIB, NIA,

representative of Nigeria Insurance industry at the West African Gas Pipeline Insurers Consortium, Chairman, NIA Advisory Committee on accident insurances, Chairman fare paying passengers Insurance pool of NIA, Chairman Insurance industry Rating committee as well as the Managing Director/Chief Executive Officer, International Assurance Company Limited do you intend to bring your wealth of experience to bear in RIM Insurance brokers Limited?

My intention is to establish an arrangement in this industry which borders on professionalism, which will be a lead to other practitioners which will show other practitioners that if you do things professionally sky is your limit. Professionalism is what we must imbibe in this our industry. And by that as a broker you hold the belief that an underwriter is your partner in the industry, as underwriter, you hold the belief that a broker is your partner in the industry, both partners hold the belief that the policy holder is partner in business in the industry then we can be able to chat the way forward.

I don’t hold the belief that the only way to market insurance be it broker or agent is to continue indefinitely to cooperate.

I believe that underwriter also requires to pay claims as much as policyholder is requires to pay only reasonable premium.

So, if we can be able to take a lead others will come on board that will go a long way in setting our mind frame on how to change the perception of some people about the industry.

Sir, RIM Insurance Broker Limited by records was incorporated in 2000 but started operation 2008, tell us what was the reason for it delay in starting operation?

An incorporation of insurance broking firm does not translate to legal authority to run such an outfit without being formally registered by National Insurance Commission of Nigeria (NAICOM). So, all along it has been the processes of perfecting the registration with incorporation with insurance brokers which is a legal requirement and the registration with NAICOM which was completed in 2008 and accidentally coincided with the period I took my retirement.

Sir, what is your opinion on the insurance law review project of the federal government- Its merits and demerits to insurance industry.

Legal framework in every society is an on-going process. Occasionally they looked into an updated to be in line with the expectation of the society as obtained internationally. But we have to be cautious in the way we dish out legal regulations or operational rules and guidelines on yearly basis.

It is turning out now to be a reoccurring issue and it is expected that when we have a legal framework, some period is required to see how it has fared and the area that we need the amendment.

But let’s see what govt. had in mind. Before the announcement the expectation of the industry was that within this period there will be having a sort of a regulatory update from the commission unless if the major aim is to consolidate all the regulations over the years.

The situation on ground now is that there are some divided opinions among various interest groups in the industry in the representation in the Prof. Joe Irukwu-led committee as to what would be their fate when the recommendation/report is submitted to the National Assembly for passage into law. What is your opinion concerning this?

I have to speculate that on the first instance considering the position of Prof. Irukwu in the industry and his integrity he must not have been instrumental to who and who are to be in the committee. The appointment must have come to him just like every other member of the committee and be that as it may, I quite believe he will do justice on whatever assignment that has been given to him and where there is need to carry other arms of the industry that he is going to take the necessary step to make sure that all views are taken into consideration before coming with any recommendation he is going to make.

Insurance bond has been a major tool for revenue generation for insurance industry until it was taken over by government and given to bank. What would you say concerning government decision. In whose interest and what would you say should be done?

The practice of insurance specifically, coverage of risks and the underwriting of bond is just one of them. But the problem is not entirely federal government thing the operators also contribute to what is making FG to take the decision. You walk into many company they tell you they don’t write bond because of the risk involve then why are you insurer? Some company that will write will do a shoddy job and the claim will outweigh the income. Then the problem of payment of such claim: one thing we should understand is, federal government have transferred to bank and banks are doing without complaining , without minding the facts that banks are not risk bearer as insurance relating to such matter.

My candid advice is that insurers should sit back, do their own work, devise a laid down underwriting procedure just as the bank do. You go to a bank you want a bond for N10 million the bank will say you have lump sum in your account at all time during the life span of the bond, minimum of N10 million. What else, the bank will not loose.

Don’t perform they pay your money to the affected. That is one, the bank will take collateral like landed property from you and tell you to get counter indemnity from insurance company, you go to insurance company empty handed. Insurance company will dish out bond to you, no collateral, nothing. There is bound to be problem. If banks are taking up let bank write 100 per cent, bear the risk. Don’t transfer the risk to insurance company. Don’t ask for counter indemnity from insurance company. Insurance company don’t issue if they ask. If they are not taking bank should not take the collateral and hand over the indemnity to insurance company. If bank is to hold the collateral, the insurers will have a first charge in that collateral under a written contract.

So, at all time instead of the underwriter losing, the underwriter should even be praying default, so that he can impound the collateral and there is encouragement for the contract to be performed. The problem is our underwriting approach.

When there is a claim and you pay, the government will not have any cause to complain and when there is claim you cannot pay, be it government or be it the private entrepreneur who fail to recover the bond amount will have every reason to complain. So if the industry is going to government to say no, rescind your decision, we must go with facts and figures, what we intend to do and how we intend to do it, so that government will listen and give us another trial.

Is it true that some insurance firms are in the habit of reducing/cutting their premium rates just to get business by all means? What are the likely implications of this on the industry?

It is true companies excessively cut their premium rate and any company that is adamant or not falling in line with that practice faces the danger of extinction from the industry which is not good.