Insurance

COVID-19: How insurance brokers, agents are coping amid lockdown

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Chuks Udo Okonta

Insurance brokers and agents are frontline practitioners in the insurance business value chain, contributing about 80 per cent of the industry’s yearly gross premium income.

The outbreak of the coronavirus (COVID-19) pandemic which has led to lockdown of economic activities almost across the globe, has slowed down the activities of these key players in the insurance business.

The former President, Nigerian Council of Registered Insurance Brokers (NCRIB) and Managing Director/Chief Executive Officer, Plum Insurance Limited, Barrister (Mrs) Laide Osijo, told this medium that the lockdown has affected brokers in the area of soliciting new businesses especially with federal, states and their agencies.

“By now we are expected to be bidding for some businesses in April, but no opportunity for that yet as a result of the lockdown. We pray things improve by the month of May all things be equal,” she posited.

On the positive side, she noted that some policies that are due for renewals are now effected online, adding that some clients do give instructions to brokers via mails which are transferred to underwriters.

The General Secretary, Association of Registered Insurance Agents of Nigeria (ARIAN), Itoya Moses, said the fast spread of Covid-19 pandemic around the world has created unprecedented outcomes in the global economy.
He noted that the lockdown has enormous impact on insurance agents, stressing that it has impacted them negatively and positively.

On the negative side, he noted that premiums are not coming as regular on new businesses and that customers are now reluctant to remit their premium on existing businesses.

Continuing, he said the monthly budget of an average insurance company has drastically dropped, stressing that considering the facts that some agents collect cash, the lockdown, has thrown up temptation for agents with unscrupulous attitude to suppress client’s cash.

“It has not been easy to close new businesses as many of the prospective clients are not technologically inclined and even those that are inclined, often find it difficult to print and fill proposal forms because of the total lockdown and electricity challenge,” he added.

On the positive side, he posited that ARIAN had envisaged a time like this, which was why it prepared her members – agents, ahead during its 2019 conference, which had a theme: ‘Retail Insurance & Digital Transformation’.

On way forward after the pandemic, Itoya said considering the structure of the agency system, which revolves round, ‘as you work you earn’, insurance companies should help agents operations by deploying different technology channels for business transactions just like the banks.

“We need now more than ever before to realign our financial plans to survive any crisis. Maximum support should be given to agents at this trying period by their companies.

“We need to give inceptive and financial support to agents that are new in the system/industry, especially those who have not built a large client base, if not many of them will leave the system.

“Insurance companies should get in touch with the grassroots, to know how an average agent feels during this period,” he added.

He expressed optimism that after the lockdown, businesses will start flowing in as usual, whilst imploring insurance companies to support ARIAN so that together they can move the industry forward.

According to the Nigerian Insurers Association (NIA), underwriters got N220.89 billion (53.37 per cent) insurance premium from insurance brokers in 2018. Insurance agents generated N107.83 billion which was 26.05 per cent; direct sales brought in N29.01 billion, 7.01 per cent, bancassurance yielded N30.37 billion, 7.34 per cent and N24.25 billion, 5.86 per cent, from other distribution channels.

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