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Rethinking insurance through innovation

When the coach saw the number exceeded his limit, he brilliantly gave us a simple task. He said, “I want you to run fast as you can, go to the playing field and occupy the positions you are comfortable with.”

A key note speech by Mustapha B. Mugisa at the Uganda Insurance Regulatory Authority chief executives breakfast meeting at Kampala Serena Hotel. It is reproduced verbatim. Enjoy.

MC: Our keynote speaker this morning is Mustapha Bernabas Mugisa, commonly known as Mr. Strategy. He will share insights on how to rethink insurance. Ladies and gentlemen lets join hands and welcome Mustapha.”

“What is the unoccupied space in your business?  What is the unoccupied space in Uganda’s insurance industry?

As a CEO, do you move around trying to take on occupied spaces and struggle with the person to unseat them? Or you move around, identify, settle and take control of the empty seat.

I don’t know about you. When I was still young, I loved playing football. Now I just watch it.

At the playground, I occupied the striker position – no.9. Football is a simple and beautiful game. The rules are clear; score as many goals and do not concede.

If you look at football and the insurance sector particularly Uganda, these are the same things: score as many goals. We have the brokers, agents and direct sales people. Their role is to write as many policies as possible. The other side, we have the defenders. These are the claims processing team, underwriters and the managers. And the rule is precise; stop as many goals from entering. If you score 10 goals, concede 10, do you win? No. To win, you score one goal and don’t concede.

Unlike a football where you a coach, in insurance we have a team leader; the CEO. How do you ensure that you are always looking for unoccupied space, the right people and win the match?

Unfortunately for football and any other business, we have been tuned to celebrate people who score goals. If you don’t score goals, somehow you are not known.

As a small boy, I was very ambitious. My aim was always score goals. In my class from Primary two to four, everybody knew me as no.9. Actually they would call me ‘no.9.’ However that was a simple comfort I had to myself until one day in our district we got a huge competition.

Usually every three years, there was a powerful competition at the district level that is Hoima district where elite teams would go, play competitively to win a trophy. Because it came only after three years, you had only one chance in your entire primary life to be in that elite team. That was my dream.

One day I cannot forget, that was Friday 1st 1989. We got a new coach. He came to our class, whispered softly to our English teacher. He rose straight and said; “if you like football, raise up your hand.” I raised mine. “If you like football and know how to play it, stand up.” Around 20 pupils stood up. “Fast as you can go the assembly and line up,” said the coach.

I quickly sprinted to the assembly.

A few minutes later, we were over 100 of us in the line.

The coach needed only 22 footballers to train them to form the school team, Munteme Primary School Football Team.

When the coach saw the number exceeded his limit, he brilliantly gave us a simple task. He said, “I want you to run fast as you can, go to the playing field and occupy the positions you are comfortable with.”

To be a striker, you must be agile, strong and fast.

It was about half kilometre distance from the assembling point to the pitch. We ran as fast as possible. By the time I reached the playing field, six boys had already taken the no.9 position. They were so big. I could not handle joining them.

I quickly crossed over to the other side. Five people were in the space. Again, I looked at them. I looked at these guys. They were powerful and bigger than me.

“Don’t go into a war you can’t win! I remembered words of wisom from my grandfather which now I can with confidence say, he must have read from the Art of War book by Tsan Tzu, a Chinese War General’s. It was clear I couldn’t win these guys. The coach could not prefer me. These guys were swift. Already had beaten me to occupy the space by running faster. And that is what the coach wanted – faster strikers” I thought to myself internally.

Walking straight, with a bowed head looking down, I started moving away from the middle of the field to the sidelines.

I knew I couldn’t make it. As I moved out, I had a voice.

“Hey there. What are you doing? Which position is that?”

I stopped. Turned around and the coach said something that changed my life. I know it could change yours too. He said,

“Do you give up that easily?”

I reflected slowly on that statement because it was important. I replied him, “I play no.9. The space is already occupied.”

He said, “I see across that way, in the goal keeper position, there is no body. Why don’t you go and play in that position?”

If you have watched a movie called the ‘Shaolin Soccer.’ You know the lady substitute how she comes to take over the keeper position but feeling low. She thinks everybody is saying she doesn’t know.

I went into the keeper position. “let me try it for the first time.” I reluctantly moved in there.

When I take on challenges, I like to give in my 100%. There is no second chance. I hate the feeling that comes when one regrets for the time they wasted, opportunities missed. I rather say, I did my best. I worked myself extremely hard.

I asked the best goal keepers I knew of in the village. I became from average to good. We had a main goalkeeper and I was the assistant. Most of the time I played the games. Every match of the competitive football our team went, I was there.

You can’t imagine how my life was changed by this opportunity which I got because I dared to try to play in a position I had never played in!

I played many matches. I was among the school’s first team substitute keeper, and went through all emotions of winning and losing. This experience opened up the world while in my young age. If I had stayed in the no.9 position, I would have been dropped. I took the unoccupied space and it made my life easier and very interesting.

Ladies and gentlemen, what is the unoccupied positions in your business? Many of us are comfortable with our usual playing positions. We want to sell the traditional insurance products because they are the ones we know. We sleep in the beds laid the same way every single night of our lives, because that is how they should be!

To succeed, focus on the blue ocean and make the competition irrelevant. What are the most pressing issues in insurance today?

The reward structure in the insurance market is that insurers don’t invest in long time business growth. They are always looking for the next kill. People want a sale and want it now. You can’t go further unless you deliberately invest for the long time. Agents and brokers are just aiming to meet yesterday’s revenue targets. This is something insurance players need to fix urgently.

One person tells you about insurance. Another colleague from the same company tells about the same product. You find that the product articulation is completely different.

I had a confession with one the CEOs. He said, “Am tired of you insurance sales persons.” Just too much traffic.

Many insurance firms are concentrated in Kampala targeting financial institutions, government Ministries, Directorates, Agencies, (MDAs), SMEs and individuals.  Here, you have the broker who has targets to deliver. The broker sends foot soldiers to any of the target market. The broker is like an independent structure outside the insurance sector.

In the same market, there are agents targeting the same kind of individuals and institutions.

The agents also their sales teams into the same market. They are not organised to know which broker has gone where. You risk having different sales team fighting for the same client in terms of lower premiums to be charged, and kickbacks. The target customer has powers to decide. So, the agent will tell the target customer; “I need this at this fee. Do not tell the broker.” I will do anything you wish.

At the end of the day, you notice conversations are reducing from repeat side. Insures are fighting themselves to the same target because the client has seen we are disorganized.

The results are not very healthy.

We have generalists; not experts in specific insurance products because we want to sell all products to all different customers in different sectors. The insurance sector is not empowering anybody to invest for the long term and create market awareness. Many insurers want to grab want is at hand and go. In our actions for survival, we are stagnating the market. That is why our insurance penetration has remained at very low levels.

Recommended for you: Insurance Analytics: How Insurance Companies can monetize their vast amounts of data

Rethinking the insurance sector

Let’s focus on what we are good at in search of growing the market. If you look at the data, what are brokers, agents and direct sales teams good at? Most of the time we make decisions based on opinion and hearsay. We can’t segment the market based on geography.

Kampala is the biggest business area. All of us what a piece of it. How can we develop innovation insurance products and reach everyone with a mobile phone?

The best way is segment into sectors; who brought most revenue in which sector. Give priority to the biggest income in your book based on the sector. Until you deliver 40% of your anticipated revenues for any financial period, do not focus elsewhere. Let the sales teams drive marketing in the selected industry of focus so there is sector deepening and improved service delivery.

Once any team hits 40%, they are free to go into other sectors. For brokers, licensing is based on which industry expertise do you have? The general feeling in the market is that brokers have gotten their own preferred insurance firms. And this is one of the biggest challenges in the market. The sector accepts inefficiency.

The agents are allocated specific industry sectors of focus. However, there is free industrial flow of information, the brokers can tell you everything about the clients they hold accounts with the insurance firm.

Also read: The cost of fraud

Direct sales can be removed from the industry.

They have a lot of work in underwriting, managing the clients, and providing proactive risk management. Ensuring risks do not materialise. This is another disease killing the sector so much that you will hear adverts by insurance firms advertising of how much they paid in claims as if paying claims grows the business!

Paying claims in a short time does grow the business. However, to be profitable, you must empower the insured to prevent the risks which you have insured from materializing. The better KPI for insurance is how much risks they prevented from materializing through proactive engagement with customers on risk management and incident prevention.

When it comes to advertising, look at how long it takes one to have their claim settled than how much you actually paid. As an insurance firm, you are in the business of risk management – giving your clients peace of mind. Do you wait for someone to fall sick with diabetes, give them money to go for treatment or you tell them avoid these life habits that cause such diseases? This is where insurance should be investing.

Insurance companies in Australia for example are investing in health clubs. Brand them and give cards to their respective clients who access the health clubs free of charge.  Insurers should invest in stopping risks other than how much they have paid in claims. If you have this approach, direct sales will focus on retention, inquiries, operational efficiency.

And above all, invest in business intelligence and data analytics industry wide. There is need for the sector to invest in data warehousing so that they have profiles of all clients. In case a claim that appears suspicious is made, the industry data center should be approached to examine the of the claim against the performance of the client at different companies. That way, risks of multiple insurance of the same risks could be identified.

To access the complete presentation in PPT format, contact us.

Download the pdf version of this article here: insurance-download.pdf (25 downloads)

Copyright Mustapha B Mugisa, 2019. All rights reserved.

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Mustapha Barnabas Mugisa is one of those rare people who provides business consulting and advisory to professionals and corporate entities who demand the very best. He is a prolific speaker and governance (strategy and risk) expert. His speaking involves making key notes at major conferences and business events on both technical subjects and leadership skills. A change agent and motivational speaker. Mustapha provides tools and proven methodologies to remarkable results through making people appreciate change. Visit Mustapha's LinkedIn profile to know more. Mustapha is the architect of #WinningMindset Leadership and #WinningTheGame strategy approach that combines Harvard Business strategy Playing To Win, with the Blue Ocean Strategy and Balanced Score Card to deliver a strategy that is easy to execute and monitor. Visit www.mustaphamugisa.com for special insights to improve your condition. Are you too good to be great?

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