WELCOME ADDRESS BY THE COMMISSIONER FOR INSURANCE, FEDERAL REPUBLIC OF NIGERIA ALH. MOHAMMED KARI AT THE FIRST INTERACTIVE SESSION WITH MAJOR CONSUMERS OF INSURANCE PRODUCTS AND SERVICES HELD ON THURSDAY, 1ST FEBRUARY, 2018 AT ORIENTAL HOTEL, LEKKI EXPRESSWAY, LAGOS STATE.
It gives me great pleasure to welcome you to this first interactive session between us meant to facilitate improved service delivery to consumers of insurance products and services in the Country.
I want extend my appreciation to you for taking out time from your busy schedules to be here with us this morning. This demonstrates to us your desire and commitments towards the safeguards of your investments. I want to believe that this session will be very rewarding, given the calibre of participants seated here.
The National Insurance Commission (NAICOM), being the regulatory agency of the saddled with the responsibility of superintending over the insurance sector in Nigeria has, as part of its primary mandate the protection of consumers (policyholders) – both corporate and individual.
Our gathering here today is indeed, one of the steps being taken by the Commission towards achieving that mandate. The timing for this session was carefully chosen and considered appropriate in view of current changes in the public sector environment especially with the Executive Order on Ease of Doing Business issued to all Ministries, Departments and Agencies of Government. Another reason is the yearnings shown by you, the consumers, for better services from insurance institutions among others. We believe the principles Ease of Doing business order should permeate through the value chain of our sectoral service providers. We happily noted that at the same time insurance institutions have also engaged themselves on the need for them to come up with a service level agreements, detailing how they would improve service delivery above what the law provide especially on timelines of task completion. I am happy to note here that they have so far agreed to shorten some tasks completion time of their major activities on the basis of self regulation and market agreements first between themselves and secondly between them and you the consumers of their services.
The Commission had signalled the issue of effective and efficient service delivery to consumers as a key priority with its establishment of Complaint Bureau Unit to deal with complains from members of the public against any insurance operator. This Unit had recently been upgraded and is headed by a Deputy Director to attend to aggrieved consumers. Many aggrieved consumers have continued to access this desk to register their complains with us. We advise you to take advantage of this desk and report your challenges to us and I assure you that any company found in default shall be compelled to do the needful.
It is pertinent to inform you that Stakeholder engagements like this will, going forward, form a major avenue of interactions with consumers. We intend to hold this engagement bi-annually to foster a mutual relationship between the
Commission, the insureds and the insurers. We believe such regular interface will afford us the opportunity to listen to your ideas and contributions towards making the industry as consumer friendly as possible.
Above all, we are optimistic that post this interaction, we shall witness improvement in service delivery to consumers by insurance entities. There is no doubt that our competitive environment and the changes in the world economy as a result of globalization, deregulation, privatization, financial meltdown, and the modern advancement in technology gives insurers the opportunity to transform their business operations and realigned with customers by understanding the needs of the consumers and ensuring an enhanced and efficient delivery of products and services. We are aware that the satisfaction of consumers of product and services plays a vital role in the sustenance of any business.
The difference between great and poor customer service has always been clear, and businesses on the wrong end of this spectrum usually pay a price. This is as true for insurance as it is for any other customer-facing business. Today, the consequences of subpar service are amplified by the speed and reach of social media. One poorly handled claim, one mistake captured on a smart phone could escalate quickly into a brand-damaging crisis. This is why we believe it has become imperative that insurance firms increased their focus on providing great customer experience.
My task here is not to give a lengthy speech or lecture but to welcome you to this
session and perhaps set the tone for our discussion. However, permit me to
quickly advise insurance operators that providing a strong customer experience
is not just about reducing the risk of customer service mishaps. It is increasingly a way for companies in competitive markets to distinguish their brands. Delivering a superior customer experience takes more than developing a mobile app or adding a call centre staff. It requires significant investments, relentless improvements, and collaboration across customer channels and business functions, from distribution and underwriting to claims handling.
Understanding what customers want is paramount in building a better customer experience. However, the Commission in recent time have noticed certain behaviours and actions of consumers that are not in psych with this believe which is detrimental and dangerous to the insurance industry in Nigeria.
We have seen situations where the insured (Consumer) in connivance with insurance Brokers allot proportion of risk to local underwriters without due cognisance of the insurers’ capacity; preferring to place risk abroad even when the local market is not saturated. Some consumers also in alliance with intermediaries chose to exclude some underwriters from participation in underwriting certain risks without cogent tenable justification.
The Commission frowns at these practices and want to use this medium to inform such consumers to desist from the practices as they run counter to our regulations. Where we have noticed such practices, we have rejected applications from operators for approval to cede such risks abroad. This action of the consumer/broker sometime leads to delays in placement of the risk even when the insured has paid its premium to the intermediary. While the Commission is not averse to ceding of risk offshore, it must be done only when the local market has taken the much its capacity would allow.
Other areas where the Commission has issues with the insurance consumers are in:
i. Direct involvement of the insured with reinsurance placement of their Insurances. Once the consumer places his risks with the Insurer, whether direct or through a broker, he or the broker has no role in the placement of the reinsurance. On this note, I would like to remind consumers that the Nigerian Insurance space should only be occupied by Insurance institutions licensed and regulated by NAICOM. We would not accept insurances placed through a non licensed operator in this market.
ii. Delays in submitting evaluation results of bidding processes to the Commission.
iii. Delays by the insured in issuing placement/ renewal instruction to the insurer. These delays, more often than not, makes it impossible for the Insurer to meet the application period for the placement of excess risks offshore where applicable.
iv. The emerging practice of supposed premium funding by local brokers on behalf of the insured.
These are trends that are not only dangerous to the insurance industry but also to the consumer. We ask you to desist from these practices because they are neither in your best interest nor that of the insurance operator and of course, that of our nation. We also crave the understanding and cooperation of the consumers to ensure compliance with our laws and regulations particularly the Insurance Act 2003 and the Local Content Act.
Suffice it to say that such good understanding between all stakeholders can only make NAICOM more effective in its role of protecting the insurance consumer. I welcome you all once again and wish us a fruitful session.
Mohammed Kari Commissioner for Insurance/CEO