By Patience Saghana
Insurance brokers have expressed their displeasure over attempts by financial authorities in the insurance sector to elevate insurance agencies (agents) above brokers to drive the industryâ€™s Market Development and Restructuring Initiatives (MDRI), an initiative of the insurance regulatory body, National Insurance Commission (NAICOM).
The Commission though has acknowledged the pivotal role of insurance brokers in the country, but it has continued to rely more on insurance agents to drive the new market initiatives. This has made insurance brokers to feel threatened by the Commissionâ€™s endorsement of the agents.
Dr Teslim Sanusi, President, Nigerian Council of Registered Insurance Brokers (NCRIB), who spoke the minds of insurance brokers, said that brokers are strongly opposed to elevating the roles of agents above practice of insurance brokerage.
â€œThe disposition towards playing up the roles of insurance agents above brokers is unacceptable.Â Whilst recognising the roles of insurance agents, it is noteworthy that brokers are better positioned to drive the new market initiatives.
â€œAside from being professionally trained, insurance brokers operate under stringent professional discipline that constrains them to play according to the rules of ethics and professionalism. In most advanced climes, insurance agents are made to operate under insurance brokers and Nigeriaâ€™s case should not be an exception.â€
Continuing, Sanusi stated â€œIt is regrettable that some of the bad image earned in the past in the insurance industry was wittingly or unwittingly through some unscrupulous agents.
Regrettably, unsuspecting members of the public usually appropriate such professional misbehaviour to the entire industry.â€
He said that NCRIB appreciates the efforts of the regulatory body in taking insurance sector to the next level but believed that insurance brokers have an important part to play in growing the industryâ€™s premium and contribute to Gross Domestic Product, GDP.
â€œOur Council wishes to applaud the initiative which, among other things, has played up the need for compulsory insurances by creating a new category of insurance under section 2(5), (6) of the Insurance Act 2003 and created guidelines on same.
â€œThere is the need to give greater opportunities to insurance brokers if growing the market is to be achievedâ€.
NAICOM recently released the classification of the Insurance Agency System in Nigeria in a move to sanitise, modernise and expand the scope of the network as the pivot of insurance penetration in the countryâ€™s rural areas and as a driving force for MDRI.
Mr. Fola Daniel, Commissioner for Insurance, said the import of the consolidation of the agency network system was to introduce the concept of corporate agency in Nigeria in order to capture the myriad of un_supervised jurisdictions in insurance distribution activities, properly manage the entry and exit procedures in agency operations in Nigeria, create the right platform for professionalise and dignify the insurance agency system in the country.
Tje Insurance Commissioner said â€œUnder Section 34(3) of the Insurance Act 2003, the Commission is empowered to make consumer insurance products available to the larger society.
The Commission is also empowered to license insurance agents. Integrated persons and organisations can now appoint and manage a team of field marketers in their capacity as agency administrators, subject to licensing requirements.â€
He said that the agency network system will be the pivot of insurance penetration in the country, especially in the rural areas where an agent residing in the village under the auspices of an administrator would canvass for business which would help to deepen insurance penetration in Nigeria.
â€œThe renewed enforcement drive is to ensure that the industry achieves its set targets with regard to premium income and contribution to the GDP of the country,â€ Daniel added.
Part of strategies for achieving this, according to him, is the creation of a robust and strong agency arm in the industry, adding that a situation where insurance brokers control about 80 per cent of the insurance business in the country is not acceptable.
He said that insurance brokers handle wholesale insurances and are not in a position to reach out to individuals in all the nooks and crannies of the country. He added that it is only insurance agents marketing retail insurance products that are capable of reaching Nigerians wherever they are residing.