About six per cent of insurance policyholders in the country source their insurance from brokers, it was reliably gathered.
The Director-General, NIA, Mrs. Yetunde Ilori, who in a paper entitled, ‘Retail Insurance Distribution Perspectives: Challenges and Opportunities’, presented at the 2018 Chartered Insurance Institute of Nigeria (CIIN), Offices Representative Committee (ORC) workshop in Lagos, identified the various means policyholders source their insurance and said six per cent of the insured get their cover from insurance brokers.
According to her, 34 per cent of the policyholders source insurance through their employers; 27 per cent from family members; 16 per cent through agents; 13 per cent though banks; six per cent through brokers and four per cent through other means.
She canvassed reform of the distribution channels, stressing that the present channels limits effective utilization of alternative distribution channels. She noted that the total adult population of Nigeria is 96.4 million, of which 59.6 million (61.9 per cent) dwell in rural areas, stressing that efforts should be made to take insurance business to these people.
Determined to back-up the assertion that brokers control 85 per cent of business in the insurance industry, the Nigerian Council of Registered Insurance Brokers (NCRIB) has commenced work to begin annual publication of gross premium generated for underwriters by brokers.
Its President of the NCRIB, Shola Tinubu, said the publication will start next year. “We have rough data for commission and premium, but we do not have data for gross premium generated by the broking sector. It is a challenge we have to rise up to going forward, because we need to be able to bring what we generate to the table. I think it is something we can do next year,” he said.
The volume of business written by insurance companies grew from N315.96 billion in 2016 to an estimated N363 billion in 2017, but the amount generated by brokers could not be ascertain due to paucity of data.
Investigations revealed that underwriters paid over N33.6 billion to brokers and agents as commission for premium generated in 2016. Information obtained from the Nigerian Insurers Association (NIA) noted that Non-Life Companies paid N22.40 billion, while Life Companies paid N11.19 billion commission to intermediaries in 2016.
Executive Secretary of the NCRIB, Fatai Adegbenro, said work is in progress as regards the publications of brokers’ contributions to the industry, adding that the council had considered the template designed for the initiative. He maintained that available data from underwriters’ financial records revealed that bulk of insurance premium which may be up to 70 per cent come from brokers.