Insurance Sector is under Serious Threat – Experts
L-R: Vice President, Nigerian Council of Registered Insurance Brokers (NCRIB), Barr. Rotimi Edu; Deputy President, Dr. (Mrs) Bola Onigbogi; President, Mr Shola Tinubu; Hon Commissioner for Women and Poverty Alleviation, Mrs Lola Akande and Chairman, Nigerian Insurers Association, Mr Tope Smart at the 2018 National Insurance Brokers Conference & Exhibition held in Lagos on Thursday
The challenging business environment, harsh economic situation, unfavourable government policies, lack of trust on the industry by insuring public, unwholesome practices and unhealthy competition by industry operators are posing serious threat to the survival of insurance sector in Nigeria.
These were the views expressed by experts at the 2018 edition of the Nigerian Council of Registered Insurance Brokers (NCRIB) Conference/Exhibition and Annual General Meeting (AGM) in Lagos yesterday.
Speaking on the theme of the conference, “Insurance Industry: Survive, Thrive.” The Managing Director/Chief Executive Officer of Infrastructure Bank Plc, Mr. Adekunle Oyinloye based his views on the prevailing situations in the industry and the country generally.
Corroborating the views of the Chairman and moderator of the lecture session who is also the Chairman of Nigerian Insurers Association (NIA), Mr. Tope Smart, Mr. Oyinloye said, “Insurance sector is seriously under threat,” calling on the players to redefine their model of operations by embracing professionalism, good corporate governance and best practices as well as moving with the current trend of event in the world especially in the area of technology.
Earlier, the Chairman of the Nigerian Insurers Association (NIA) who is also the Managing Director/Chief Executive Officer of NEM Insurance, Mr. Tope Smart who chaired the conference lecture session, had expressed worry on the several challenges faced by the industry.
According to him, “If you look at our environment, the environment is so harsh. Some of the policies of government are against insurance. If you critically look at the tax law, it will tell you that insurance industry is not favoured. A situation where the tax payable is based on gross premium without taking into cognizance other expenses insurance companies incurred is very abnormal.”
“If you also look at ourselves too within the industry, talking about some of the things that is happening, we need to do a lot, we have all kinds of challenges within us. We have a market that is not disciplined. All these are threatening the survival of the industry. We need to look at all these and for us to survive and for us to thrive, we must address these issues urgently, Mt. Smart said.
Mr. Oyinloye charged operators to be proactive and professional in their approach to business, just as he urged the Chartered Insurance Institute of Nigeria (CIIN) to regulate, review and expand its curricular to meet the present need of the industry.
He called on all the stakeholders to fight for the survival of the industry.
“Essentially, for the industry to survive, thrive and attain its potentials, the government must be sincere in promoting a favaourable environment that will allow the financial services industry to thrive. This will help increase the professional efficiency of the industry. Additionally, the industry must make concerted effort to play more actively in the real sector of the economy. We need to fight for the survival of the industry. As industry stakeholders, we need to trust in the ability of our president to lead the charge in fighting for our relevance in this economy,” he advised.
He called on insurers to adopt proactive and practical approach in ensuring enforcement of compulsory insurances.
Oyinloye believes that if there is enforcement on the side of government that will back the operators up, the operators will be able to enforce on their side, adding that the general implementation of insurance act has left much to be desired.
He said some sections of the Insurance Act have been badly implemented while some have never been implemented at all, saying that the need for adequate legislation and policy to create a conducive operational environment cannot be overemphasized.
“The formulation of economic policy which will give room for investment will also help the insurance because when there are friendly investment policies insurance companies will also be able to make long term investment for better return for such investment. It is in our collective interest to ensure that the economy does not go down,” he added.
He noted that some companies are constrained by customer service related issues typically relating to product offerings, quality service and sophistication of products offered.
The theme speaker said in this era of technology, insurance industry must find a way of providing customers with internet-based self service to help them view policy covering, pay bills, make changes to policies, submit claims and check the status of claims on daily basis.
“Brokers should be able to obtain online quote, proposals, plans designed for their customers. They should also be proactive always. Professionalism background is key, “he said.
He called on insurance companies to allocate some percentage of its budget for staff’s Continuous Professional Development to keep them abreast in view of the professional standard and best practices.
NEM MD called on insurance companies to find ways to sensitise the populace on the need for them to embrace insurance while charging government to play their role by making relevance laws that will help in the enforcement of compulsory insurances.
Today insurance is only concentrated in the urban centres and much is not heard or known about insurance in the grassroot. We need to take insurance to the grassroot because so many people are not even aware of the values and benefits of insurance. What are we doing to educate members of the public to know the values and benefits insurance?
Insurance cannot thrive as long as we have policies largely misunderstood by members of the public. We must look at the kind of policies we roll out. Policies should be simplified for all to understand.
We must also address the issue of technology because the level of the industry’s technological know-how will determine how successful it will be and as an industry, we need to instill confidence in the minds of the insuring public for them to patronize us,” Tope Smart said.
