Friday, March 29, 2024

Why insurance brokers can’t penetrate grassroots – Tinubu, NCRIB President

Penetration has been decades’ long challenge in the Nigerian insurance sector. In this interview with ABIOLA ODUTOLA, the President, Nigerian Council of Registered Insurance Brokers, Mr. Shola Tinubu, outlines his plans designed to overcome the hurdle. He also seeks collaboration of insurance brokers with other stakeholders towards boosting the Nigerian economy. Excerpts:

Operators in the brokerage and insurance firms have been divided over the years. As the 19thPresident of NCRIB, what are your plans towards uniting them?
We focus more on improved collaboration as we are trying to forge one united family; because we are insurers, whatever we say in the public is regarded as the insurer’s voice, not minding which arm of the sector the speaker belongs to. That collaboration is important to the success of the industry. We want to speak with one voice on matters affecting the public, the industry, policyholders and customers alike.

As an intermediary, how do you intend to maximise the potential of the brokers towards achieving increased growth?
The broker has always been known as strong in the corporate business. Retail is the big thing coming, while insurance penetration is going to be a potential for us in terms of retail. That will happen, but the corporate businesses remain important because companies like Shell, as big as they are, have big insurance departments with technical advisers on insurance, which will continue to require the role of brokers.
They still use brokers and they will continue for the future. They have captive insurance companies run by them, yet they still use brokers sometimes to run their captives’. A captive insurer, as we all know, is an insurance company that is wholly owned and controlled by its insured. We even have a situation where NNPC captives are run by brokers even till today, so the role of brokers in the corporate sector will always be there.
In the future, the growth of the corporate sector in Nigeria will only be limited to the growth of the economy. Therefore, it is only when the corporate sector runs, with new companies opening and the existing ones doing better, that you will see a larger role. That role will always be there no matter what, but I suspect that the role will be dwarfed by the speed and growth of the other sectors, which will be the retail business, because it is coming around the corner.

How do you intend to enhance the retail business?
Retail business is going to be enhanced by the use of technology, and where brokers need to look at is how to be relevant in the new market that is going to explode. So it could be relevant that brokers start to arrange a technology platform. After all, entities that are not brokers are arranging technology platforms for insurance, so why can’t brokers also be involved in doing that, because we have an added advantage over them, because those people don’t know anything about insurance? So, you are going to see a lot of that.
But importantly, people have to be prepared for the unknown and the organisation must be on their feet also, to anticipate that there is going to be issues with regulation. Regulation is going to come, and it is going to surprise us more and more because regulation is even trying to catch up with what is happening. There is no regulation for doing internet insurance broking, and that regulation will soon come out. It will have to come out unless you will just have a space where people are going to be doing anything they like. As things change, we are going to be seeing regulation role as well. So, if you ask me as you have done, l believe the future is extremely bright for the insurance brokers, but there is going to be an effort to be made in terms of ingenuity and creativity to be part of the new created business in years to come.

How can the industry be more relevant to the growth of the Nigerian economy?
Some people think insurance penetration can happen just by insurance people doing their business a lot better; it is not true.
For many decades, one of the reasons insurance penetration has not occurred is because, you don’t even have payment platforms for people to pay. For you to achieve insurance penetration, you need to take it to the grassroots.

Penetrating the grassroots can be challenging due to the value of their premium. How do you intend getting them without spending more?
It is an issue for information technology; it is an issue for banking and other financial institutions because they are the ones being used for payment and the rest. So, we then realise that we cannot just sit down and start strategising and thinking by ourselves alone. We have to take along other stakeholders. This is why we are inviting many other stakeholders to be able to address some of the challenges we have.

Several critics have argued that considering the state of the Nigerian economy, this is not the best time to insure. What is your take on this?
That is not true. It is when things are so hard that you must ensure that you put a little amount aside to insure. Insurance must remain in place, either during boom or decline. The little assets you have must be protected because you don’t know whether you will be able to replace the assets as the economy has declined. We will continue to insure in time of recession.

Don’t you think the introduction of technology by many underwriting companies would take jobs off insurance brokers?
I understand where that thinking is coming from because I can see that there is a channel that seems not to have encouraged the broker’s participation on that. It has been raised at the national insurance conference where we had an open forum with all the parties there, and the brokers were also able to
respond.
The outgoing president (of the NCRIB) has responded to some of the things we said, and I believe that the commissioner also made his point there as well. I think what he was trying to say is that if it is true that this particular channel that is being created has not encouraged brokers on that platform, which is what we are also pointing at, it is not the only channel. It doesn’t mean that you can’t create a retail channel as well. So, I try not to see things from a negative perspective. We always try to look at opportunity that arises from every situation and make good
use of it.

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