Insurers, as the primary risk managers for all spheres of the economy, must spearhead efforts aimed at building nation-wide resilience to economic shocks and drive the post-pandemic recovery process, Patience Akyianu, Group CEO, Hollard Group, has said.
In her estimation, the commonly-used approach of government almost unilaterally bearing the cost for economic recovery has failed and continuous reliance on this model is untenable.
This comes at a time when there are serious discussions on the weight various stakeholders should bear in the economic recovery process, with some schools of thought advocating for government-led, financial sector-supported approach and vice-versa, with banks as the primary, if not sole, representative of the financial sector.
But according to her, relegating the role that the insurance industry, as a key stakeholder and driver of the economy, has to play in the recovery process, borders on myopic at best as it neglects the unique expertise of the industry.
Speaking to the B&FT on the sidelines of 2020 edition of the Ghana Economic Forum (GEF), which was held under the theme, ‘Resetting the economy beyond COVID-19; Building economic resilience and self-sufficiency’, she clarified that her proposition was not a call for exclusivity but one which highlights the importance of the insurance sector.
“Building resilience requires a multi-stakeholder engagement and with insurers being the world’s foremost risk managers and risk engineers, we have the expertise and knowledge to drive this agenda. Insurers and asset managers must partner with government to put an agenda to ensure the economy recovers and is future-proof with regards to resilience,” she said.
Ms. Akyianu added that such an arrangement will see “different stakeholders work in partnership to prioritise more efficient disruption prevention and mitigation efforts, broaden the responsibilities different stakeholders assume for speeding up recovery, and elevate resiliency in corporate and investor agendas on par with near-term efficiency goals.”
This, she noted, will improve risk sharing and transfer mechanisms across the board, and enhance the speed, efficiency and effectiveness of future loss remediation and public-assistance schemes.
The CEO further suggested that with the comparatively low insurance penetration rate, the general apathy toward insurance, which she described as a ‘grudge purchase’ but the enormous potential for growth as a result of the demographics of the nation, insurance companies must begin to introduce products with greater incentives.
She explained that customers are sensitivity to the pricing of insurance products and this has only been exacerbated by the pandemic as it has eroded many of disposable income and reevaluate their scale of preference.
Insurers must strive at remaining relevant post-pandemic and to achieve this, we must be flexible and understand the changing needs of customers. We tailor our offerings. The era of all-inclusive, high-priced insurance products as the norm, is becoming extinct.
We know our customers are price sensitive and considering the economic hardship that they have faced with the pandemic, we need to work with the regulator to make it more manageable for them to pay for their insurance needs, perhaps, moving from annual premiums payments on a monthly basis, for example, with auto-insurance,” she stated.
Furthermore, she said that key to seeing increased patronage of insurance products is to building confidence in the digital agenda as a decent number of potential customers continue to treat digital solutions with suspicion in favour of person-to-person interactions.
“We need to look at the need to simplify our processes and migrate toward a more automated system and further digitize our operations, ramp up digital distribution channels, digital marketing and simplify the product purchasing process. We have a unique opportunity to bring people in and we should not treat it lightly.”