Experts have identified professionalism; good business environment; improved economic situation; favorable government policies; trust; ethical practices; healthy competition; people’s friendly products; law enforcement amongst other things as factors capable of transforming the insurance sector.
These factors were identified, as the experts brainstormed on the way forward for the industry at the 2018 edition of the Nigerian Council of Registered Insurance Brokers (NCRIB) Conference/Exhibition and Annual General Meeting (AGM) in Lagos yesterday.
The Managing Director/Chief Executive Officer, Infrastructure Bank Plc. Adekunle Oyinloye, while speaking on the theme: ‘Insurance Industry: Survive, Thrive’, said Insurance Act 2003 and the National Insurance Commission (NAICOM) Act 1997 in particular require better implementation and enforcement.
“For instance, Section 64 of the Insurance Act makes compulsory insurance of building under construction which is more than two floors. The general implementation of the Insurance Act has left more to be desired. The limitation of liability on third party insurance is too small in line with the present day economy.
‘‘Several sections of the insurance Act have also been badly implemented. We cannot overemphasize the need for an adequate legislation and policy to create operational environment,” he said.
He stated that the formulation of economic policies which will give room for investment will also help the industry, stressing that where there are investment friendly policies, insurance companies would also be able to make long term investment for better returns on such investments.
He maintained that it is noteworthy to state that if the economy is in a better shape, the prospective client will have the liquidity to procure insurance. According to him, customer services in the Industry can be enhanced, adding that companies are constrained by customer-service related issues, typically relating to product offerings, quality of services and sophistication of products offered.
“Customer service is clearly important for winning new customers and retaining existing ones. The first step of changing the face of the industry is ensuring an exceptional customer experience. Insurance companies must find a way to provide customers with an internet based self-service insurance platform where customers can view policy coverage, pay bills, make changes to policies, submit claims and check the status of claim progress. Brokers should be able to obtain online quotes, proposal and plans, design for their customers,” he stated.
He posited that employing more adequate staff with related professional background is also key and that it is also important that the Chartered institute of Insurance of Nigeria (CIIN) must regularly review and expand their curriculum to meet with the present market need and build the capacity of student members.
He said insurance companies must also allocate a percentage of its budget to Continuous Professional Development to keep staff abreast of professional standards and practices.
“Insurance companies must also find ways to sensitize the populace about the use of insurance. The government also has a role to play in this by making relevant laws that will help make certain insurance policies compulsory and harsh sanctions for non-compliance of same,” he added.
He noted that essentially, for the Industry to survive, thrive and attain its potentials, the government must be sincere in promoting a favorable environment that will allow the financial service industries thrive. This, according to him, will help increase the operational efficiency of the insurance industry.
He therefore called on the industry operators to make concerted effort to play more actively in the real sector of the economy.
The Chairman and moderator of the lecture session who is also the Chairman, Nigerian Insurers Association (NIA), Tope Smart, said, “Insurance sector is seriously under threat,” calling on the players to redefine their model of operations by embracing professionalism, good corporate governance and best practices, as well as moving with the current trend of event in the world, especially in the area of technology.
“If you look at our environment, the environment is so harsh. Some of the policies of government are against insurance. If you critically look at the tax law, it will tell you that insurance industry is not favored. A situation where the tax payable is based on gross premium without taking into cognizance other expenses insurance companies incurred is very abnormal.
“If you also look at ourselves too within the industry, talking about some of the things that are happening, we need to do a lot, we have all kinds of challenges within us. We have a market that is not disciplined. All these are threatening the survival of the industry. We need to look at all these and for us to survive and for us to thrive, we must address these issues urgently,” he added.
President, National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) Iyalode Alaba Lawson, implored insurance operators to take their services to people at the informal sector, unite and work closely with their colleagues in the Organized Private Sector (OPS).
Chairman, SME Trade Group, Lagos Chamber of Commerce and Industry (LCCI) Abiodun Oladapo, called on insurance operators to do more in reaching out to people at the grassroots. He noted that many business had collapsed due to lack of knowledge on how insurance works.
He therefore implored the operators to adopt the Cowbell Milk strategy, to package low premium cover for the people. According to him, the Cowbell strategy was what took milk to people at different strata of the economy, thereby enhancing their income.
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