The National Insurance Commission (NAICOM) has called on the brokerage arm of the industry to upscale its business model to hedge the impacts of recent Federal Government subsidy removal.
NAICOM said this has become necessary in view of a possible drop in sales, as consumers were likely to ration their spending on the impacts of the subsidy.
Sunday Thomas, commissioner for Insurance/CEO, NAICOM gave the advice during the Nigerian Council of Registered Insurance Brokers (NCRIB) 2023 Chief Executive Officers Retreat Held in Ogere, Ogun State.
Thomas the recent subsidy removal by the federal government exacerbates the need to project the value proposition of insurance beyond the conventional perception, as there will be a “complex rationing” which could further relegate insurance demand.
“We must upscale our business models to attract individuals who are leaning towards creating Sinking Funds.”
Furthermore, economic activities may reduce in the short run, so we must optimize our management expenses in order to avoid the pressure of an off-peak period, while not forgetting to prepare for the possibility of cost-push inflation, Thomas said.
Speaking further on how the industry can get better through sustainable growth, he charged the brokers to accept changes that come with modernization and technological advancement.
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“This is why we must realize that distribution channels for insurance products must be expanded beyond the traditional norms. Every arm of the sector must hugely invest in technology in order to compete or be able to meet the expectation of clients.”
According to him, it has become imperative to support the Commission’s efforts to bring emergent online platforms for the distribution or provision of insurance under the Commission’s regulatory purview in the interest of the Nigerian insurance industry.
“An important issue is the need for operational standards to prevent or reduce to the barest minimum unethical practices which ridicule or impugn the integrity of the Nigerian insurance industry.”
Thomas, therefore, changed the insurance brokers to begin to re-examine the insurance broking value proposition beyond the traditional perception.
“This is necessary to enable the insuring public/insureds to appreciate other values offered, as the rhythm has changed and people may only use services that provide priority values to them.”
“I must also emphasize that insurance brokers have very important roles to play in our collective aspiration to reposition the industry. This includes projecting the additional values created by the new regime of Third-Party Motor insurance cover, the NAICOM Portal, improved soundness and stability of insurers, better market conduct practices and fair treatment of insurance consumers, as well as ongoing collaboration with state governments on compulsory insurances, among others.
