Boss Talk

2019 law amendment akin to throwing out a baby with the bathwater

muthui

Minet Kenya boasts of three subsidiaries. They are Minet Kenya Insurance Brokers, which operates as an advisor and intermediary in the placement of insurance covers, Minet Kenya Financial Services for pension administration and Minet Kenya Consulting for advisory services in various specialty sectors.

The firm is, however, known for insurance brokerage and more so for the Teachers Medical scheme, which has been under the spotlight in recent months. Minet Kenya chief executive Sammy Muthui spoke to Business Daily.

***

The teachers’ medical cover scheme is probably the most lucrative for you given their numbers.

The teachers’ scheme is handled under MKB [Minet Kenya Insurance Brokers] because we are brokers and MKC [Minet Kenya Consulting] on the administration side. The teachers’ scheme is probably one of the biggest in sub-Saharan Africa because it has over a million lives.

If you compare the size of that scheme, it is probably about 40 percent of the whole private insurance industry. We are in a consortium of nine players, which includes major insurance players. Each player in the consortium has a different role. As Minet, we coordinate all those roles.

Being the largest scheme in sub-Saharan as you put it, how does that reflect in benefits to members?

It is probably one of the best covers in the country in terms of in-patient limits. It covers much more than your average scheme. Besides the out- and in-patient, optical, dental and maternity, we also have emergency air evacuation, both helicopter and fixed-wing.

The scheme takes care of medication outside the country, it has group life and funeral cover from a minimum of Sh200,000 in it. It is a generous scheme.

Insurance intermediaries have long been associated with fraud. What is the situation like today?

Sadly, this is what the intermediary world has come to be known for. Indeed it was there from a long time ago where some rogue brokers and agents will be paid money by a client and then divert the cash instead of taking the money to the insurer.

And therein lies lack of cover and that’s to the detriment of the insuring public. But I would say this is a behaviour that presented itself because when the industry was growing and there was little regulation.

It was a bit of a Wild West kind of situation just like any other industry when it is young and the governance structures are poor.

How are things different today?

Things have changed significantly in the last 10 years because regulations have been put in place and the [Insurance] Act has been enhanced. I must commend IRA [Insurance Regulatory Authority] because for the last three or so years it has put its foot down. In the past, there was very little enforcement.

Today, enforcement is so strict that you cannot get the annual licence if you don’t demonstrate that all premiums paid by the client have been taken to the insurer.

Governance structures have become so strict and with technology, everything is nearly real-time. Also, the insuring public is much more informed and that has made it difficult to eat one’s money anymore by few rogue brokers.

Yet in 2019 we saw the IRA amend the law to block intermediaries from collecting premiums although that has been challenged in court.

That is the proverbial throwing out the baby with the bathwater. You will do more damage than what you are intending to do. Right now, the enforcement is so strict.

Unlike the insurance companies which are given licences in perpetuity, brokers apply for licences every year and one of the key compliance issues is the payment of premiums.

As a CEO overseeing operations of three Minet subsidiaries, what does your normal day look like?

Sometimes I even wonder if there is something like a normal day in my life because every day brings its uniqueness. Generally, my day starts at 5.00 am. I do a school run if I can.

I love taking my kids to school because I get to spend some quality time with them. I am usually in the office to tackle the issues of the day by 8.00 am.

In terms of priority, because I am the chief problem solver, I start solving the issues of the day like if there’s any fire to be put out in the company. But I also look at progress on growth, developmental and strategic issues.

What special managerial skills make you as a CEO a good leader of the team?

One of the most important skills is planning and prioritisation. The best way to manage is through the empowerment of your people through delegation. But delegation without accountability is abdication. So you have to think through and plan things upfront.

Even if it’s an emergency or a problem that arises, if it finds you well-planned around your ecosystem, you can have enough capacity to think through and resolve the problem.

Secondly is people management. Everything is about people or teams because you can only do much as an individual. Being able to put together an appropriate team for a particular area is the most important thing for me.

How do you put a team together?

Life is not linear. You’ll find that the kind of people you want in a particular place either are not there or are the ones you need to be trained or coached. Being able to balance and have the best possible team for particular areas is the most important skill.

It is a skill in the sense that yes, there’s normally money for the recruitment process and putting together a JD [job description], but the hardest part is to choose because people operate within a certain culture in an organisation. So you have to get the right person in terms of not just skills but also culture.

Once you have the right people then planning starts with vision, mission and strategy. That should be well communicated. And we normally use the bottom-up approach so that everyone from the shop floor to the managers, own the plan.

Once everyone has understood the mission and vision, the strategy and tactics that we are going to employ, then you leave them and empower them to go and execute their work. That ownership ensures that you don’t need to micro-manage.

What do you consider to be the biggest motivator for your employees?

The biggest motivator for people is the ability to win, not even money. It is empowering them to succeed in what they are doing. Once you do that you truly don’t need to micro-manage them.

When you are through that season of planning and strategising — because that is usually intensive and happens in a particular season in a year— then you start expecting what you expect from day to day. But then you need to have checkpoints about the plans you have. This helps you to be proactive before things go wrong.

[email protected]