If a clear cut strategy that will address key challenges facing insurance distribution in Nigeria is put in place, the industry’s Market Development and Restructuring Initiatives (MDRI) project will achieve its expected success.
Some of the critical challenges including access to insurance products; usage in terms of solving problems; relevant products, customer service and trust and confidence, which has largely been blamed as fault of operators as against the public interest in insurance, are key impediments to the implementation of the different compulsory insurances under the MDRI.
MDRI project was geared at installing necessary reforms in the area of industry capacity, market efficiency and consumer protection in the Nigerian insurance market, with the target to deepen, grow and move the industry gross premium far higher through enforcement of different compulsory insurances.The compulsory insurances includes Motor Third Party Insurance of Section 68 of the Insurance Act 2003; Buildings under construction of Section 64 of the Insurance Act 2003; Occupiers liability insurance of Section 65 of the Insurance Act 2003; Group life Insurance in line with the Pension Reform Act 2004 and Health Care Professional Indemnity Insurance-under section 45 of the NHIS Act 1999.
Yemi Soladoye, managing director, Risk Guard Africa Limited who rated the first stage of implementation of the MDRI since it was flagged off in 2007 said it has achieved 75 percent success, saying that a lot still needs to be done.
He however noted that the National Insurance Commission (NAICOM) was reviewing the project and crafting new strategy that would ensure it successful implementation.
“The initial challenge was that the market regulator probably underestimated the enormity of the work required and the operators themselves were not forthcoming.
“When I said it succeeded I mean what I am saying because the fundamentals where we based our projection were clear and everybody saw it, he said.
The MDRI initiative is a turning point in insurance practice in the country, adding that with MDRI, operators, regulators, support service providers, journalists and government, now realise the fact that there is something going on in the industry.
He said prior to the introduction of the MDRI, operators were leading the industry, but with the initiative, the regulator is now in charge and coming up with initiatives. “MDRI is also a turning point because it is from that stage we saw the regulator leading the market. There is a united focus for all of us. Whether you adopt it or not, we all know that there is a project on ground and there is a direction as to the way we can go for us to secure increased penetration for insurance business in this country.
“The initiative is a turning point in the history of the industry and it is also an evergreen thing. You cannot wish it away, as it has brought about many developments. When you read the strategy document, you would see that micro-insurance is part of the area that was recommended as where the industry will get development. Takafu is also an aspect of the initiative. As MDRI is targeted at restructuring, therefore, all the restructuring happening in the market are embedded within the programme.”
He lauded the efforts of Fola Daniel, adding that prior to his appointment, the best the industry had on the premium income was 24 percent increase, now it has increased to 36 percent. As at December 2009, NAICOM has in its record about 1,695 registered agents with different insurance companies, stressing that by December 2010, the number increased to 3,404, which was about 2,000 increment.