The Commissioner for Insurance Mohammed Kari, gave the advice while delivery a keynote at the 2016 Insurance Brokers Conference and Exhibition, with the theme: “The Future Today” held in Abuja.
He charged insurance brokers not to focus only 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.
He said: “Insurance concepts, principles and practices perhaps look alien to the average insurance consumer. 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 said that one of the primary future goals of the Commission is to have more informed insurance consumers in the system; pointing out that 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 reads 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 future market would certainly belong to that broker, who has worked hard enough to secure the trust and loyalty of the consumer, 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, which does not help the penetration of insurance in the country and does not promote future growth of the industry.
He frowned at the practice of all brokers chasing the so-called, “juicy” Government accounts, which he said should be discouraged because it is not helping the growth of the industry, while at the 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 licence than those with licence.
“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 noticed 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 would take this opportunity to expand their operations in these areas.”
[ad unit=2]
