The President, Nigerian Council of Registered Insurance Brokers (NCRIB) believes insurance firms should not be allowed to fail. In this interview with Chuks Udo Okonta, which was conducted at the sideline of the recently held African Insurance Organisation (AIO) conference in Nairobi Kenya, he implored government to intervene and support ailing underwriting firms, just as it did to banks with problems.
Withdrawal of operational licence of insurance firms
I do not think there is much about the cancellation, but what I feel and have being agitating is that cancellation usually, has a run on the insurance industry. I said it when we had a meeting with the Permanent Secretary, Ministry of Finance, that when banks are failing, the government come to their rescue to save the banks. I have also discussed this with the Commissioner for Insurance that we should seek a way to penetrate the government. A company like Niger Insurance should not be allowed to die. A company like IGI is also struggling, the only thing that is saving that company is that it has a lot of investments. And these investments are not easily convertible to cash. So, if at the end of the day, government comes in and save these companies, appoints technocrats and professionals to reshape them very well, it is better than withdrawing their licences. This is because most of the companies are composite, they sell life policies which are long term investment.
Take way from AIO conference
Really speaking the fact, the organisers were well prepared. Not only in terms of organising the conference, even in the reception of the visitors. Transportation from the airport was very seamless, the registration too was superb. The conference itself was very rich. Rich in substance and delivery.
The entire ambience of the college was great! In fact, when we got here, we were surprised to see such an edifice. But the truth remains that the progress made here is an industry thing. The entire industry came out to support the edifice which we should all emulate in Nigeria. Sometime, underwriters and brokers shy way from things like this. Here, they have a lot of collaboration. We have learnt quite a lot of things, we would emulate and wish Nigeria the best.
Deepening insurance penetration
If you go back and check my thrust of office as the President of the NCRIB, which is brokers centricism, it is the way of penetration insurance. What I have seen is that we come and talk, yet, we do not put action on the talks. I micro it to brokers, but people are talking about the entire market. We need to do a lot of penetration. People would be surprised that I took my members in Lagos, for a walk from our secretariat to the third mainland bridge. That day, my company did 2,500 hand bills and distributed 1,800. Following that, I also try to use sport as a means to deepen penetration. We have to think behind the box of just coming all the time talking to ourselves, saying the same thing over and over.
When we went to BIBA, John Major came to address the conference, the former United Kingdom Prime Minister David Cameron also address the conference. Their coming was a diversion from the usual form of professionals talking to themselves. We should create diversion to be able to penetrate.
In another three weeks from now, we are going to put about 2,800 students in the arena of the Lagos lawn tennis club to mentor them on insurance. This is because they will grow and be in one company or the other. This is what I call deepening penetration.
To deepen penetration, we need to think beyond the box and look out for non-professionals. Since I took office and we started visitation, there are three major people that we have found in any company handling insurance, they are the accountants, managing director and admin. So, we have spoke to the Institute of Chartered Accountants, architects, because of buildings and they have asked us to come and talk to them during their annual conference. We would not stop there, we would also meet many other professional bodies.
I started with the Lagos Chamber of Commerce and Industry, I have the vision that we should take ourselves beyond our shore.
To deepen penetration, we should think openly. We should distinct ourselves and use our vision to achieve our mission.
Few weeks back, the civil service had the civil service week, I called some companies and told them, let us collaborate and we took the shine of the day. What we did was to present the best civil servant with a vehicle and that became the order of the day.
We are also planning to bombard the Lagos State Secretariat to educate the people there on insurance. When we leave the Secretariat, we would move to Allen Junction to also educate the people. You never can say, somebody going out that morning may be looking for where to buy insurance and the event would provide the opportunity.
Claims default
When we finished the walk on the third Mainland Bridge, I then said the next place we want to go is Alaba area. Somebody called me and said no, for if we go there, we would be stoned, because insurance has failed them. I then told the Executive Secretary of the NCRIB to write to the executive to have a meeting with them, so that we can right the wrong. This is because of the insurance companies that the licence was cancelled, had already went there big time, collected money, arranged insurance and at the end of the day, claims were not paid. I’m also experiencing that with the Head of Service on their group life which I handled. Last year, when I was to institute the policy, we have to force some insurance companies to pay, or ease they would not be on that account. The Commissioner for Insurance tried his best, but the Head of Service insisted they must pay. At the end of the day, we were able to recover a lot of outstanding claims.
I think the industry chieftains need to take another look at their actions. With due respect, I do not see any reason why anybody would collect premium and would not be able to pay. This game is a law of large numbers. You see everybody in a jeep and in gigantic offices, yet what we opened our shop for we do not do.
Claims settlement within weeks
Each company tries to acclaim and exhibit their claims payment which is good, but we are still not there. By now, we should be able to settle claims within two to three weeks, unless it is a stale paying claims that has not be adjusted.
Claims report
I would not put the whole blame on the insurance industry. For instance, in the group life, sometime, it takes months before they report the claim. Aside, that, after reporting, it still take them months to substantiate. Some because of traditional belief, would not want to report, some because of religion belief would not want to report. The industry is really trying in that area for no matter how long it takes, they still try to accommodate such claim. That is why I’m not pushing the whole blame on the industry. What could have caused the delay? It is lack of education and awareness, which we also have to take care. It is a gap for us to educate the public, institutions, private and publicb sector about insurance and let them know what to do in processing their claims and in instituting their policies. I keep saying it people should go through registered insurance brokers. Because when they do that, they would have people who would work for them to ensure they get their claims.
Market development by NAICOM
What we are planning about businesses being created in the northern part of Nigeria is for three or four broking firms to come together open up an office there and take the businesses and also share the commission. Same thing, the few underwriters there should lead the businesses. The problem we have is acceptance, which we must first address.
In Abuja, recently I was invited for a road show and we went to the major motor parks and other places to canvass insurance. I always tell my members that these things cost a lot of money, but if we do not invest, we cannot reap.
Information technology
We have 774 local governments and almost all underwriters and brokers are in Lagos. I think information technology would help us a lot.
At the BIBA I spoke with two companies to see if we could get an information technology platform that would work for us in rural areas, so that we can increase awareness and penetration. We are working on that. I hope the underwriters are doing same. Because, at the end of the day, if we are not careful with the sales of our products in these areas, we would be in serious trouble. My suggestion is that we should continue to engage.
NAICOM is also trying to register some vendors, because they feel we are not doing enough. They also feel it is their responsibility to ensure that insurance get to the nook and cranny.
We are advocating that the vendors should be put under the brokers, because if they mis-sell, it would revised to the industry.
Insurers-brokers engagement
In the past, I have spoken to some managing directors of insurance firms, that they should give to a broker that is doing well a car and attach a marketer to help them monitor businesses for them. We really have a problem and the only way out is to keep on engaging.
Weeding out fake brokers
I have done something which is novel and would help the industry. For every broker, we now have a seal. The vision I have for creating that seal, not everybody still can see it, until we start using it. We have the seal in the legal profession. As a lawyer, I have my seal which goes into every document I issue. We are at the state of writing to all institutions about the seal and also getting the ministry of justice to accept it. Such that if you tender any document and that seal is not there, it would not be acceptable in the law court. It may be a long walk, but I’m trying to fast track and shorten it.
Collaboration with Lagos State on safety
The NIA is working seriously with Lagos State on Safety. When the issue of collapsed building became rampant. I wrote to the Lagos State Government, not because I want to collect the business, but to ensure insurance help in mitigating risks associated with the menace. Today, the NIA and the agencies of Lagos State have put a road block to ensure that you present insurance before commencing any construction work.
Transport insurance
We have also engaged Lagos State Government to ensure that every citizen that go into transport business has insurance.
