adminWalter Muchinguri in Nyanga
THE 2013 Insurance Institute of Zimbabwe summer school opened in Nyanga yesterday with delegates being urged to be innovative to grow their companies and the industry. Different speakers made reference to the need for the practitioners to think outside the box as well as coming up with innovative products that best serve the interest of customers.
Real Institute of Mozambique chief executive Mr George Sithole said that insurance practitioners need to consider the NICER model in order to continue running a profitable insurance company.
NICER is an abbreviation for niche, innovation, claims, expenses and relationships. In this regard Mr Sithole said insurance companies need to find a niche market in the economy and engage competent specialists who have the technical expertise in that market.
He gave the example of Eagle Insurance which dominated in engineering insurance in Zimbabwe for 20 years because it employed a resident engineer John Clegg who assessed risks on its behalf.
“The idea of a niche is to specialise in a specific product or target market which enables an insurance company to recruit and develop expertise,” he said.
He added that insurance companies needed to be innovative through streamlining of processes and simplifying the insurance buying process which will ultimately boost profits.
“This enables clients to easily access the products and make the buying process simpler. This can be done through introduction of robust ICT systems which meet client’s lifestyles or habits,” he said.
In terms of claims, Mr Sithole said these needed to be managed as they were the single largest expense in any insurance company.
To this end he said there was need for strict adherence to underwriting and risk management policies, zero tolerance to fraud and the creation of a pool of experts in claims handling both internal and external.
With regards to expenses, he said that organisational structures needed to be aligned with strategy while insurance companies also needed to ensure that major expenses are aligned and proportionate to income generation.
On relationships, Mr Sithole said it was critical to maintain interpersonal relationships between brokers, re-insurers and clients.
“Insurance is a people driven business, more than 80 percent of business success is dependent on the people through relationships,” he said.
NMBZ holdings divisional executive for advisory services Mr Loyd Kazunga said managers in the insurance industry needed to desist from being crybabies and devout more time to coming up with concrete plans to address the present challenges.
“Companies cannot continue to mourn about the same issues for five years. This shows that the people heading those companies do not know what they are doing. They cannot also expect Government to address all their challenges because Government has its own challenges,” he said.
He said that insurers should strive to look for opportunities in the present situation to grow their business and to overcome their challenges.
Another speaker Aon Hewitt South Africa’s consulting actuary Mr Rodney Manzanga underscored the need for through assessment of risk to ensure that companies do not take on business that is beyond it capacity.
He said insurance companies should not just be preoccupied with their bottom line without taking due care to assess the risk of the business that they will be taking on.
The head of risk at Etana Insurance Company Mr Marcel Wood who presented a paper on claims risk urged insurance companies to ensure that they mitigate against possible claims by ensuring that their clients implement mitigatory measures to minimise the risk that they are taking on.
The IIZ summer school, which ends tomorrow, is a platform for junior and middle managers to meet and discuss issues affecting the industry.
Online Reporter