Trust – so hard to win but so easy to lose

We all know how hard to can be to put our complete trust in someone or something, yet trust goes to the very heart of insurance. Buying insurance is buying a promise – a cliché but true. As is the cliché around insurance companies only being as good as the claims service they provide. We all know that and yet it seems the message has yet to get through. In Nigeria, a new report has revealed the depth of the problem – some 138 million people, out of a population of 190 million, do not trust insurance As one risk manager said: “Take out the babies in the total population and it doesn’t leave many who actually believe insurance will work.” So it is no wonder that insurance penetration in Africa’s largest economy sits at around 0.4% – let me repeat that: 0.4%. It is such a low figure that it needs repeating. It therefore comes as no surprise that insurers really believe there are opportunities for growth. Speaking to a number of risk managers in the market during the past couple of weeks, it is clear there are polarised views. Some see a real value in insurance protecting their assets and ultimately their balance sheets, but others have a hard time justifying the cost to themselves, let alone to their boards. The answer seems to lie in education – some of the Nigerian risk managers I spoke to said it was crucial those out selling insurance in the market really understood what they were selling and would only sell the right product to the right person – and at least point out any major exclusions. They said expecting people to read the small print was naive and insurers should work harder to make the policies clear – even to buyers of corporate insurance, who are as likely to misunderstand the policy as anyone else. Insurance is key to improving GPD and driving economies towards better times. But it is also clear that insurers could be doing much more on the ground to educate those within and without their businesses. The better news was that risk managers are seeing a change. Those I have spoken to across the continent agree that risk management as a profession has a higher profile than ever before and that risk management is being embraced by regulators and also by firms. No longer a tickbox exercise, risk management is being driven to the heart of businesses – large businesses at least. The risk managers I spoke to said the next stage will be to bring SMEs into this loop and to encourage central governments to go further in encouraging sound corporate governance. So, while risk managers have some concerns about Kenya’s new Bribery Act, overall the view is that this kind of regulation can only be applauded. Businesses have no option but to comply and, hopefully, it will ultimately result in a much-needed cultural change. I want to thank all those who taken part in Commercial Risk Africa roundtables in the past few weeks, giving valuable time to share their thoughts on the development of risk management across the continent. I am in South Africa this week, where I hope to meet yet more of you, as part of this annual project. I would also encourage as many of you as possible to complete our short survey – visit: https://surveymechanics.com/s – you never know, you might be the lucky risk manager to join us in Europe at one of our international events later this year. Finally, we are beginning to launch details of our various one-day events in London and across Africa for this year and would encourage you to take a look on www.commercialriskonline/africa to find out more – I hope to see you at one of these days. In the meantime, I hope you enjoy reading this issue.

Trust – so hard to win but so easy to lose

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