Nigerian insurance sector: From jump-start to jump-growing (2)

CHUKWUMA ONONIWU

Chukwuma Ononiwu is a doctoral fellow ICRMP-UK, DR.ICRMP-UK, FCILRM-NG, ACILRM-NG, an alumnus of Abia State University and Pan Atlantic University Lagos Business School, a certified professional insurance broker, and a certified risk management professional. He can be reached through riskswisepro@gmail.com and  +234-903-596-8732 (WhatsApp only).

I wrote the first part of this series last week. This week, I will focus on the following: 

Abolishment of the individual agents. I strongly advocate the need for the abolishment of the individual insurance agents. A needed soft landing should be given to retirees of insurance firms, who want to continue to practice insurance, outside insurance, outside of the insurance brokerage eco-sphere, which is capital intensive. 

To facilitate, a minimum of three fellows and a maximum of seven fellows should be given a soft landing by NAICOM, the National Insurance Commission, to legally incorporate an insurance associate agency, which will be a professional intermediary for chosen insurance firms, not exceeding seven firms, with their areas of insurance focus clearly spelt out. This way, the associate agency will collectively and in the same ratio be given the needed support in terms of start-up I.C.T. equipment, start-up office rent payment, start up training in contemporary underwriting up to a defined level of cover in defined lines of insurable risks, authorisation for the execution of certain clauses for the benefit of the compliant insured; for instance, approval for the expedient  payment and expedient reimbursement of benefit of authorised repair limit in a motor comprehensive insurance policy. 

Retirees from other professions like law, accounting, risk management and actuarial science, should equally be incorporated into this template. The ultimate objective is to gradually weed out the individual insurance agents, particularly the young fellows, who are bereft of technical training, who know next to nothing in insurance and who over the years have consistently sold falsehood to the insuring public in a desperate bid to survive. This has consistently over the years left the insuring public with a very bitter sour taste after drinking from the CUP of insurance in the country.

NAICOM should equally review the guidelines for microinsurance firms and insurance aggregators, taking into cognizance the parlous state of the Nigerian economy and the fact that the growth of insurance is predicated on a critical mass/reach adoption, the statistical laws of large numbers, the probability of occurrence of loss.

The Nigeria Insurance Association (N.I.A.), on its part, should regularly, on six-monthly intervals, collate and publish online the data on claims paid by insurance firms on all classes of insurable risks. This should be made public in the business segment of the major media  outlets in the country with mass reach such as print and electronic media. In all, individual client confidentiality should be PARAMOUNT. Recently, we have seen a rise in the number of NAICOM-licensed takaful insurance firms. 

Lastly, insurance policy terms, conditions, clauses and warranties, etc, should be less restrictive, should be client friendly, should not be burdensome and should be devoid of unnecessary legalese, especially in terms of claims processing.

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