NIC demonstrates how culture change spurs profit

DAR ES SALAAM AS Treasury Registrar (TR) Office, embarks in efforts to institute reforms within public entities in the country, the NIC Insurance has demonstrated a perfect example of how culture change can spur profit, enhance efficacy and productivity.

Indeed, robust reforms made by the NIC Insurance from 2019, has enabled the government entity to set a business benchmark in the insurance sector, taking a chunk of market share at 16 per cent, while its capital growth rate stands at 18 per cent annually.

The reforms, which makes NIC stand out among the most recent improved public entities in the country, have boosted the entity’s profit before tax from 33.65bn/- in 2019/2020 to 63.21bn/- in 2021/2022, equal to 43.91 per cent increase.

The entity earned 45.74bn/- in profit accumulation by June 2022 from loss accumulation of 19.31bn/- in June 2020 and this has enabled NIC to clear 73bn/- in debt it owed its customers since time immemorial. The NIC was established in 1963.

Speaking to journalists in Dar es Salaam on Monday, during the meeting coordinated by TR Office, the NIC Insurance Managing Director, Dr Elirehema Doriye said that the journey of transformation started in the corporation’s management by appointing effective, professional leaders, who are bringing productivity to the entity as well as investing in human resources by hiring qualified, professional and innovative employees.

“It all started in 2019 when the government officially decided against privatising the entity and we at all levels had to come out with the new vigour to ensure NIC is operated more competitively in the insurance industry and one among the best approaches we instituted is culture change. We moved aways from business as mentality to performance oriented, guided by (KPIs) key performance indicators,” he said.

The NIC’S MD explained that the reforms were also made through a reviewed strategic plan, saying the previous plan did not reflect what the entity want to achieve. He said the reviewed strategic plan went in tandem with the reviewed vision and mission to reflect that NIC has transformed to purely business oriented company.

“Now business is centre of everything in our entity…we have also invested heavily in ICT (information communication technology), to ensure we have the right records of our customers/clients,” he said.

He said investment in digital transformation has significantly increased income by 13 per cent and cut the number of days to pay clients’ claims from 35 days to just seven (7) days.

“Coined within the culture change, we’ve created a well-defined procedure for claims settlements, centred in checking fraud. We also instilled quality management system (QMS), as well as coming up with brand refresher campaign, which has changed our image and this is why we became the first company owned by the government to earn Super brand recognition,” he said.

“We looked at how we could enhance efficiency by plugging loopholes on financial losses. We’ve also been efficient in our expenditure, while prioritising settlement of customers’ claims. We have also been firm on professionalism to ensure every employee deliver to the optimum and provide quality services to our clients.

“Through the reforms, the entity has been able to eliminate losses by increasing income from 76.45bn/- in 2019/20 to 103.94bn/- in 2021/22 equal to 17.98 per cent increase,” Dr Doriye said.

Dr Doriye said that prior to the reforms, NIC was debt laden but they have since managed to clear them all including 9bn/- it owed to clients of life insurance since 1994, most of them being teachers.

However, he said that the company’s assets have grown for three consecutive years, from assets worth 350.36bn/- in 2019/2020, to 423.99 bn/- in 2021/2022 equal to an increase of 10.51 per cent.

“Our tax payable to the government have been on an increasing rate from 11.86bn/- in 2019/2020 to 15.14bn/- in 2021/2022, equal to an average of 13.80 per cent rise,” he said.

He further noted that operational efficiency has enabled the growth of shareholders’ capital to increase from 72.16bn/- in 2019/20 to 217.07bn/- in 2021/22, which is equal to an increase of 100.40 per cent per year.

“Investment in government bonds for the year 2021/22 has reached 105.64bn/- compared to the amount of 51.58 bn/- that existed in 2019/20 which is equal to an average of 52.40 per cent per year.

Moreover, he said that investment in bank’s deposits in 2021/22 has reached 32.23bn/- compared to 19.53bn/- in 2019/20, which is equal to 32.54 per cent increase,” ” he explained.

In 2022, the entity paid a dividend of 2bn/- to the government, compared to a dividend of 1.5bn/- paid in 2021, adding that before 2019, NIC did not pay dividend for 30 years.

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