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Coronation Insurance in a webinar held yesterday examined the critical role of insurance in navigating and thriving amidst economic uncertainties.
The Chief Executive Officer (CEO) of Coronation Insurance Olamide Olajolo, introduced members of panel, who shared cutting edge thought from Yinka Dawodu, Assistant Director, Underwriting & Marketing, Africa Re, Christopher Owuamanam, MD/CEO, Orient International Loss Adjusters Limited, Oluwarotimi Adewole, MD/CEO, Sam-Vic Insurance Brokers Limited and Augustine Aniekwe, Head of Corporate Underwriting at Coronation Insurance.
The webinar was expertly hosted by Wole Famurewa, CNBC Africa Anchor with concluding remarks from Oluwabunmi Adetiloye, Head of Corporate Sales at Coronation Insurance.
The core focus of the webinar was to equip participants with practical knowledge and a deeper understanding of how insurance can be a cornerstone of sound financial planning.
The keynote address provided a fundamental understanding of insurance by exploring key concepts like risk, peril, and hazard. The speaker emphasized the multifaceted benefits of insurance, highlighting its role in mitigating risk, protecting assets, and fostering peace of mind. This foundational knowledge underscored the critical role insurance plays in ensuring financial stability, especially during challenging economic times.The discussions delved into the specific challenges currently faced by Nigerian businesses.
The panel explored how a robust insurance strategy can be instrumental in navigating issues like inflation, foreign exchange constraints, and talent flight. Real-world examples were presented, showcasing how insurance helps businesses protect essential assets, processes, and outcomes, ensuring continuity and success even in a challenging market.
A key takeaway from the webinar was the imperative of prioritizing insurance as a secondary tool for achieving financial stability amidst inflationary challenges in Nigeria.
Given the recent periods of widespread inflation, the discussion highlighted the correlation between claims and expense inflation with general inflation, with a notable increase observed in recent times.
Since the latest inflationary period occurred, inflation rates have been well contained. As insurance is a liability driven business, the duration of the commitments and the guarantees/coverage offered shape the asset allocation of insurers and their sensitivity to changes in inflation and interest rates. Claims and expense inflation is correlated with the general inflation, but tends to exceed the consumer price inflation, particularly for certain key lines of non-life business. This has been confirmed by several studies showing that claims and expense inflation has significantly exceeded the general inflation for several years with a sharp increase observed in recent times.
Augustine Aniekwe, Head of Corporate Underwriting at Coronation Insurance, revealed that Coronation Insurance provides an exceptional advisory service to ensure clients maintain adequate coverage for their property values. This proactive approach helps clients avoid underinsurance and ensures they receive the full value of their claims.While the claims and expense inflation are correlated with the general inflation, there are also certain differences.
Accordingly, it is important to consider the insurance specific characteristics of the inflation to get to the claims and expense inflation.
Claims and expense inflation are mainly driven by the services in connection with the settlement of potential insured claims.
More specifically, claims inflation can be defined as a change in claims incurred due to inflation for a particular insurance portfolio over a specified period, usually one year. Claims inflation is significantly affected by increases in, for example, the prices of materials or repair work, but also by wage increases the costs of medical care due to medical advancements, which are particularly relevant for personal injuries, and changes in judicial decisions.
Depending on the definition of claims and expense inflation, it either includes or excludes social inflation. Social inflation relates to an increased propensity to court action and a resulting higher compensation for non-life claims
The event engaged discussions with seasoned professionals emphasizing the fundamental role of insurance in safeguarding financial stability, to enable customers secure financial stability during inflationary challenges.
Coronation Insurance remains committed to providing comprehensive insurance solutions and strategic guidance to its clients, enabling them to navigate challenges and build financial stability.
