An insurance expert has suggested soft landing for insurance firms wishing to survive the future amidst growing economic uncertainties caused by dwindling oil prices, fluctuations in exchange rate, insurgency among others.
The current economic situation, the expert noted has affected the general economy with the insurance business having reasonable share of the impact.
The Managing Director/Chief Executive Officer, SCIB Nigeria and Company Limited, Shola Tinubu, who spoke at the 2016 Breakfast Meeting organised by the Chartered Insurance Institute of Nigeria (CIIN), with the theme: “Managing Insurance in a Volatile and Turbulent Economy,” said that the economic challenges has affected the insurance business.
According to him, as result of uncertainties in the economy, there is weak demand and pricing environment for insurance services; low earnings and higher wages less money for insurance and some firms at the brim of shutting down.
He also observed that household incomes are dwindling with less income to spend on insurance as there is marginal tendency to consume and the disposable income of clients are shrinking due to the prevalent situations.
“The increased uncertainty in our environment means that planning for the future has become more difficult, adding that, it is how we deal with this extra risk that will determine how our businesses fare over the coming months and years,” he said.
Speaking further, he stated that firms’ survival depends on how they organise themselves. Firms behave differently, and these differences matter for their performance and survival.
Tinubu suggested a way forward for insurance company to survive the current situation, which are; firms must stay abreast of economic indicators; revisit your business plan; review current projects and plans; communicate effectively to staff; assess exposure to known risks and dependencies.
Besides that companies must strengthening their brand; improve communications with customers; managing customer’s expectations and increased customer satisfaction; automate processes to increase profitability and apply good risk management mechanisms.