Alamu: Buhari Should Provide Conducive Environment for Insurance

Chief Executive Officer, Royal Chambers Insurance Brokers, Mr. Gafar Alamu recently visited Ilorin, the Kwara state capital on a marketing drive for his company. He spoke to Hammed Shittu on a wide range of issues pertaining to the insurance sector. Excerpts:

What do you think can make insurance brokers relevant to the various sectors of the nation’s economy?

Insurance brokers need to be adequately trained and well equipped to enable them play their vital role
of acting as professional intermediary between the insured and the insurers.  The current trend iis multi-disciplinary professionals as insurance brokers must have knowledge of other fields of state economy to enable them deliver to its numerous public and this would create an efficient and effective delivery of its numerous services to the members of the public. Moreover, strict observance of professional ethics will boast the integrity of the insurance brokers.

Insurance sector is believed to have been taken over with quacks,  what do you think the professionalism can be achieved in the industry?

It may not be true that the insurance industry is saturated with quacks. The professional standard has improved tremendously. Only qualified professionals are allowed to head departments and branches of insurance companies. Similarly, only chartered insurers are allowed to register as insurance brokers. The National Insurance Commission (NAICOM) does not compromise standard. The Commission ensures that the industry is sanitised. The Nigerian Council of Registered Insurance Brokers (NCRIB) is also complementing the efforts of NAICOM in ensuring that only registered professionals practise as insurance brokers. Like NAFDAC would warn the public not to buy any drug without NAFDAC registration number, I will also advise the insuring public to patronise only registered insurance brokers.

What are the challenges facing insurance brokers in the country? What do you think is the way out?

As you know, people go to hospital whenever they fall sick and they buy food whenever they are hungry.  People need insurance the way they need food or medicine but unfortunately, people don’t buy insurance, we sell insurance to people. The biggest challenge is the unwillingness of the people to buy necessary insurance policy. After assisting potential customers identify their insurance needs, they may not still buy. Another issue is public perception of the insurance industry. Many people don’t have any genuine reason for their hatred for the insurance. Poor enforcement of compulsory 
insurance is another challenge.

For instance, third party motor insurance  is compulsory but over 80 per cent of vehicles  owners don’t have the minimum required insurance.  There are vendors of fake motor insurance operating as cabal with their illegal activities unchecked. This gives bad name to the insurance industry as people that patronise the vendors of fake insurance cannot enjoy benefits of insurance from the fake insurance in case of any event leading to claim.
However, there is hope for better days ahead for the insurance brokers and insurance industry in general as  the stakeholders are vigorously driving insurance awareness. The professionalism is improving the public perception of insurance. The industry is also unrelenting in waging war against quacks and fake vendors of insurance policies. It is possible to confirm genuineness of motor insurance certificate. We need more support of the government to combat the fake insurance and enforce compulsory insurance.

What are the kind of rapport between the Insurance Brokers and Underwriters?

The business relationship between insurance brokers and underwriters is usually cordial. Their jobs are complimentary; therefore there is mutual understanding and respect. Both maintain high level of professionalism and their activities are guided by code of ethics. The umbrella body of the insurance brokers is The Nigerian Council of Registered Insurance Brokers (NCRIB) and the Nigerian Insurers Association (NIA) is the body of the underwriters.

How do you think the Insurance industry can move forward?
We live by our vision statement which is to revolutionise the practice of insurance broking in Nigeria. We concentrate our efforts in reaching potential customers through associations, unions, societies and clubs. Part of our efforts led to the creation of a unique platform for all members of National Union of Road Transport Workers (NURTW) to get their vehicles under a scheme tagged Group Third Party Motor Insurance Scheme (GTPMIS)

The scheme is specifically designed for vehicles owned /operated by members of NURTW and their families nationwide in line with Insurance Act 2003 which stipulates that ‘No person should use or cause or permit any person use a motor vehicle on a road unless liability which he may thereby incur in respect of injury or damage to the to the property to third party is insured with an insurer registered under the Act’. In essence, the scheme guarantees that all members of NURTW and their families buy only genuine third party motor insurance.  We have successfully taken genuine insurance to the door step of NURTW members in partnership with a consortium of insurance companies.

The President of NURTW, Alhaji Najeem Usman Yasin while commending the initiative during the flag-off in Kaduna said that the scheme will go a long way in ensuring that all members of NURTW will be on the side of the law and in case of any event giving rise to a liability against a third party, one will be fully confident and assured that his genuine third party insurance will take care of the situation. This is undisputedly a milestone in the insurance industry as there is no organisation or individual in Nigeria that has the fleet of vehicles owned/operated by NURTW with over 3 millions membership strength. By the time we launch the scheme and start its full implementation, it will certainly reduce the cases of fake motor insurance cover; members of NURTW shall be able to fulfil their legal responsibilities to third party/other road users as well increase the revenue accruing to the insurance industry.

What are the strategies that can be put in place to change the set minds of average members of the public on the real value of Insurance policy?

I don’t believe that any insured would be denied of benefits of insurance if he has a valid claim. If there is any industry that is highly regulated and supervised in Nigeria, it is insurance industry.  There are regulations to protect the insuring public. The leadership of NAICOM is very dynamic and will not hesitate to sanction any company that defaults. The Commission does not only ensure that all genuine claims are paid, but it also makes sure that claims are settled promptly. Both NCRIB and NIA also discipline any erring member, therefore every company is careful not to play foul of the law.

There are also channels of complaints for any aggrieved insured.  I usually challenge anybody that has a genuine insurance claim turned down by any insurance company to present his case and I would volunteer to assist in pursuing the claim for settlement at no cost but none has given me a genuine case in the last seven years               
What advise can you offer the new government of  President Muhammadu Buhari on how insurance industry can contribute to the socio economic development of the populace?

The government at all levels must obey the laws on compulsory insurance. For instance, government must have group life insurance policy for the staff as stipulated under Pension Reform Act 2004. Government needs to also insure all public property.

I also expect the new government to support the industry in the area of compliance/enforcement of all compulsory insurances. Let the government empower NAICOM to prosecute the offenders of insurance laws. For example, there is compulsory insurance for building of more than two floors under construction. The objective is to protect the third parties and the general public but most contractors ignore this compulsory insurance of buildings under construction at the peril of the third parties who may not get any compensation in the event of collapse of building under construction.

There is also need for upward review of local content law on the insurance of oil sector. The capacity of the insurance industry has improved in terms of capital base and expertise. There has been steady growth in the industry which justifies that more of the insurance of oil sector can be retained locally,

Furthermore, the new government need to provide more conducive business environment and necessary social infrastructures for insurance business to thrive. Let there be constant power supply to reduce cost of doing business and provide adequate security for business owners and the general public. The customers base of the insurance industry will rise if the new government fulfills its promise to create jobs and empower the youths.