By Ifeanyi Ugwuadu
Efforts by Nigeriaâ€™s association of insurers to get underwriters comply with market agreement reached last year may have suffered setbacks as unconfirmed reports say players do not trust each to play according to rules but are continuing the business of premium purchase this renewals.
Premium purchase refers to offering cash inducements to risk or insurance managers or officials of government to place their insurances through a particular insurer or broker.
Vanguard investigations reveal that while most companies are cautious about flouting the market agreement, some leading ones are bolder in their bid to win a lead position in some government accounts.
Lack of trust among players, sources say, is fueling the current drive to sustain the struggle for government insurances as obtained before the market agreement was sealed and executed last year.
Interestingly, some government officials and brokers who act as fronts are cashing in on the lack of trust among insurers to step up their demands for cash-before-premium exchanges.
The tactics of fronts or the government officials is to tell company A that company B had offered millions of naira upfront to win a higher proportion in a particular account and expecting company A to up its offers.
Meanwhile, other companies will be jostling for positions in the schedule of insurers for some ministries with different proposals without being bold to ask company A or B whether they actually paid such monies being alleged.
It was learnt that even when a company is bold enough to confront a competitor to confirm if such transaction took place, the other will deny it vehemently while the underground work is working itself out through a broker being funded by the insurer or the broker himself.
Underwritersâ€™ trade group, Nigerian Insurers Association (NIA) had reached an agreement last year barring members from giving unapproved discounts or making upfront payments before premiums are paid. Similarly, it stopped members from making payments to brokers above the industry approved commissions.
However, it was gathered during the ongoing renewals that the only success achieved is that players became more sophisticated in evading scrutiny during transactions and made more use of fronts to work the businesses through.
Till date, no insurer has yet been reported as having flouted the agreement more than a month it was executed and became effective.Â It is not likely that any monitoring of compliance is in place yet.