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Chuks Udo Okonta
There are fears over the future of Nigeria’s insurance agency network, as available data revealed that about 8,300 agents have left the industry in recent time.
Data obtained from the website of Nigerian Insurers Association (NIA) showed that before now the number of insurance agents were about 15,000, but recent number released by the National Insurance Commission (NAICOM) stated that there are 6,700 agents, which leaves a margin of 8,300.
According to data on NIA website, intermediaries in insurance business are mainly insurance brokers and insurance agents. “There are 460 registered insurance brokers and about 15,000 insurance agents. Nigerian insurance market have been described as brokers’ market because presently brokers control over 90 per cent of the premium income, leaving less than 10 per cent for insurance agents and even direct marketing channel by insurers. However, insurance agents dominate the individual life insurance market,” NIA said.
NIA also noted that the banking industry has become a formidable channel for distributing insurance services not necessarily as intermediaries, but by facilitating a form of direct marketing by insurers through the bancassurance model.
It said participation by banks has also thus made mass merchandizing of those insurance products possible, adding that to enrich some of the financial products banks offer certain insurance protection as additional benefits. “For example an investor is promised three or four times the capital amount invested in case of death, payment of benefits in the event of accident, payment if children’s school fees, and insurance cover for goods bought on credit.
“To meet such obligations, they apply part of the interest due to the investors to purchase insurance on their behalf from insurance companies. This is however different from universal banking which implied direct involvement in insurance broking and underwriting,” it submitted.
Concerned agents told Inspenonline that exit of agents is as a result of the economy, which forced many of them to leave the country and those in the country sought succour in real estate and pension sectors.
The National President Association of Registered Insurance Agents of Nigeria (ARIAN) Kunle Odewunmi, had at one of the association’s events, said Nigeria population stood at more than 200 million and 60 per cent of this are below 65 years with over 105 million working class and that the agency network could provide jobs for over 500,000 young Nigerians.
He noted that the insurance industry has attracted more foreign direct investment into the Country more than any other sector, stressing that obviously, Nigeria has massive potential for Insurance business growth, no wonder several foreign Insurance Companies are making inroad to Nigeria.
He submitted that insurance companies in Nigeria have not been able to leverage on the massive market because of low investment in technology.
“We as an Association, our strategic objective is to drive Insurance penetration in accordance with National Insurance Commission (NAICOM) Market Development and Restructuring Initiative (MDRI).
“The insurance Agency network can provide employment opportunities for over 500,000 graduates every year while at the same time help to mop up investable funds for national development,” he posited.