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Challenges of insurance brokerage in Nigeria (2)

With Yinka Bolarinwa

Struggle to form a parallel regulatory body It is no longer news that insurance brokers are making moves to have ‘chartered’ institute in their name.

In as much as I am not saying that this should not exist, it is important to check if this is necessary at our stage of development. I think we should all work together to strenghten the existing institute.

Proliferation of institutes in the small industry like ours at this stage could be a source of distraction that may affect our common goals. I strongly suggest that we expand the present CIIN syllabus to accommodate everyone.

I agree that the industry is very much in short of technically skilled manpower that can provide the level of professional service required in insurance brokerage firm.

This is not restricted to the brokers’ subsector of the industry. It is fairly established in other subsectors too. This further underscores why CIIN should be given greater support to be able to spearhead the goal of training and producing qualified manpower in the industry.

A lot of recruitment and attractive package could be employed to attract young graduates to the profession.

Universal banking regime

With the introduction of universal banking, the relationship as regards insurance transaction in the financial sector has not been the same. Universal banking permits banks to do exactly the same thing the brokers in particular are doing, and get commission.

This constitutes several threats to the brokerage firms for many reasons. First is the area of remittance of fee to the underwriter’; banks may remit as soon as the payment of the premium is made by the client. Brokers may still want to wait for 90 days or more before this is done.

Secondly, banks have a firm grip particularly on banks related transaction as they may be the one financing such projects. This much the brokers do not have. Third, as if to worsen the situation, banks are buying up many insurance companies and brokerage firms to put themselves in the right position under the universal banking regime.

In the process they have attracted many qualified staff away from their old employers to new ones. Though, the movements are still largely within the industry, they cause a disequilibrium within the system. This means that we all need to proactively train our staff and pay them well too in such a manner that will enable us compete adequately.

Technological context

The technological environment of business has witnessed tremendous changes within a very short period. The insurance industry in Nigeria is still largely lagging behind and the brokers market is worse for it.

Only very few insurance firms and brokerage firms have the required software packages to automate their operations. Most still rely on the manual procedures known for their poor quality, slow speed, and the attendant customers’ ·complaints.

This further worsens the situation for the market that is still struggling against ignorance and wrong social beliefs. The poor financial state of many companies do not permit them to invest much in information technology.


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.