The National Insurance Commission (NAICOM) has tasked the insurance Broking professionals on the need to go beyond the collection of premium, claims’ to bridging the information and knowledge gap between the provider and the consumer.
The Commissioner for Insurance Mohammed Kari gave this advised while delivery his keynote address on Thursday in Abuja, at the 2016 Insurance Brokers Conference and Exhibition with the theme: “The Future Today” that the insurance brokers should not only focus on cheque collection in the industry and forwarding of renewal notices, but should make conscious effort by explaining the products better for the policy holders.
Insurance concepts, principles and practices according to the Commissioner perhaps look alien to the average insurance consumer, adding that the policy holders find it difficult to comprehend the clauses, warranties and exclusions associated with insurance contracts.
“Thus, for a consumer to insure right and gain the benefit inherent in insurance consumption, such a consumer would definitely need the assistance of a professional. Suffice it to say the need for an Insurance intermediary originated as a result of this necessity and not by convenience.”
He noted that an Insurance Broker therefore is expected to apply his or her professional and in-depth knowledge of risks and the insurance market to secure and arrange suitable insurance policies for his or her clients.
He pointed out that one of the primary future goals of the Commission is to have more informed insurance consumers in the system, despite its efforts there exist information gap between the insurer and the insured.
He however said: “What we have noticed is that while the insurance service providers hardly explain enough what they sell (in the contract document), on the other hand, the policyholders neither read nor ask questions about the contract document of what they buy. So the Insurance Broker is well positioned to bridge this gap.”
He added that that future market will certainly belong to that broker who has worked hard enough to secure the trust and loyalty of the consumer today, adding that the insurance sector will benefit the economy only when high penetration is achieved.
He further said that high penetration cannot be achieved when most providers concentrate their operations in the commercial cities of Nigeria when many Local Governments (and even some states) are without the presence of any insurance Institution.
This he said have provide opportunities for the so-called quarks to shine in the insurance industry, adding that it does not help the penetration of insurance in the country and does not promote future growth of the industry.
He said “The Brokers could even take it a step further. With good understanding and proper arrangement, Brokers could actually enter into partnership with Insurance companies to represent their interest in up-country locations.”
He frown at the practice of all Brokers chasing the so-called “juicy” Government accounts, this he said should be discouraged because is not helping the growth of the industry, while at them same time it has attracted unpalatable publicity.”
“It goes without saying that demonstration of professionalism is a necessity in Insurance business. When it is convenient we argue that our trade is a professional undertaken, but we operate as limited liability companies with shareholders/investors who are not trained in insurance but control our policies and operations. High professional ethics, moral standards and discipline is expected of professionals and that is what we must give to gain that professional respect.
“We have to take the bull by the horn and exercise the bad spirit within us. In recent times, the commission had increased its oversight function on the activities of operators of this industry. The effort is already yielding positive results. In years past more Brokers operated without valid license than those with license.
“Today the story is different. We Hope to sustain this good development and would also introduce additional distribution channels to improve penetration.”
He reminded them that Nigerian market remains huge and largely untapped. “We don’t all have to operate in the cities or follow corporate accounts, there is more in selling personal-line or retail business using modern technology.
“We have gladly notice a shift to personal-line products of recent. And this move is being led by the advent of foreign players in the industry. One would expect that Insurance Brokers will take this opportunity to expand their operations in these areas.”