by Leo Aiigwo
Nov 10, 2009 (Daily Champion/All Africa Global Media via COMTEX) --

Insurance brokers have been charged to avoid being complacent and embrace creativity and proactive approach as an option for survival in business .

The charge was handed over to them by an insurance expert Mr. Saheed Egbeyemi while delivering a paper at the annual conference of the Nigerian Council of Registered Insurance Brokers (NCRIB) held recently in Lagos.

In his paper titled; "Insurance Broking, Corporate Creativity and profitability" Egbeyemi the major factors militating against effective performance of the insurance brokers included the various facets of cut throat competition plaguing the insurance business all over the world.

These deadly competitive factors are ; the insurance brokers , universal banking insurance companies (Direct marketing), client agents, global brokers, captives of multinationals and other invisible competitors.

He argued that competition among the insurance brokers and lack of strict adherence to the code conduct as agreed by members do not augur well for the industry.

He was of the of the opinion that universal banking had done more damage than value to the insurance industry as a whole. Saying ; " we are in an era of banking turning to a"one - shop for financial services.

The insurance industry has now been turned into a subsidiary of the banking industry with the attendant deficiency of details to normal insurance practice. Banks, particularly those who are associated with broking firms and insurance companies make it condition precedent to granting loans that their customers must only place their insurances with a particular insurer and through a particular insurance broker/insurance desk where no value is added."

This , argued violates section 32, sub-section( three ) of the Central Bank of Nigeria (CBN) regulation on universal banking which stipulates that "An insurance policy should not be rejected solely because the policy has been issued or underwritten by a person not associated with the bank when such insurance is requested in connection with a loan or extension of credit.

The insurance guru pointed out that there are more insurance marketers in the insurance industry than professional risk managers, frowning at lackluster attention to underwriting, reinsurance risk control and management, and worst still claims management.

Continuing, Egbeyemi noted that due to the pressure on most insurance companies , and the impenetrable stance of some brokers , most insurers are now prepared to engage brokers head - to- head to convince the insured to deal directly with them and jettison the brokers without providing the needed professional support the broker would give some clients were encouraged to set up and register their own insurance agencies with erroneous believe that the brokers remuneration of between 10 percent and 20 percent would be returned . He cited section 76(1) of the 2003 insurance Acts, which prohibits rebate of commission to the insured.

He described the global brokers as major source of local competition, where in utter disregard to the competence of local brokers, a appointment of any of the global insurance brokers more often than not, turns to the automatic sack of the existing brokers who might have performed excellently well in the past

He further stated that most multinational organizations presently have established captives stressing, the expectation is to ensure that such captives now grow at the expense of local industries.

He observed that there several other invisible competitors such as insurance officers or insurance schedule officers in both public and private organisation.


Copyright Daily Champion. Distributed by AllAfrica Global Media (allAfrica.com).