Be Wary of Weak Insurance Firms, NCRIB Tells Brokers
The Nigerian Council of Registered Insurance Brokers (NCRIB) has cautioned its members to be wary of financial health of insurance underwriting firms where they place their clients’ businesses to ensure the protection of the image of brokers and that of insurance industry in general.
NCRIB, is the umbrella body of insurance brokers in Nigeria.
NCRIB President, Shola Tinubu, said this while addressing brokers at the June edition of the bi-monthly ‘member’ evening’ of the council held in Lagos recently. He said some insurance firms are currently facing financial challenges
Noting that this informed the decision by the industry regulator ,National Insurance Commission(NAICOM) to institute the ongoing recapitalisation exercise in the industry,Tinubu, stressed that there are feelers about some brokers still placing businesses with companies that are financially challenged .
Warning that such underwriting firms may have difficulty in paying claims when losses occur, Tinubu cautioned brokers to be watchful, adding that as critical stakeholders, brokers should be watchful as the implementation of the directives on recapitalisation unfolds.
He noted that insurance brokers cannot shy away from the fact that the directive on recapitalisation will adversely affect the entire industry, stressing that as a proactive council, the body is critically examining the implications and possible solution to the effect the implementation would have on members.
“It is no more news that the National Insurance Commission (NAICOM) has jerked up the minimum paid-up capital of Insurance Companies in Nigeria. The new capital base required that Companies that want to remain in Life Business should raise their minimum paid up share capital from N2 billion to N8 billion; General Insurance Companies from N3 billion to N10 billion, Composite Insurance Companies from N5 billion to N18 billion, while Re-Insurance Companies will require a Paid Up share capital base of N20 billion from N10 billion.
“However, on a personal note, I would like to enjoin my professional colleagues to be wary of where they place their business for the protection of image of brokers and that of the Council. News have been going rounds that some brokers still indulge in placing businesses with companies that are challenged and that may have difficulty in paying claims when losses occur. This should be watched! as critical stakeholders we would be watching as the implementation of the directives unfold before us,” he said.
Tinubu, also implored the brokers to embrace the health insurance product offered by new generation firms like NSIA Insurance Limited and see it as an excellent opportunity for them to penetrate the health insurance market since there is hardly any health insurance product being sold in the broking market
“The uniqueness of this product is in two folds. First, in this market, no broker is selling health insurance.
Most of the health insurance products the market have are with the Health Maintenance Organisation (HMO) and brokers are not carried along by HMOs. Due to this, many brokers have been precluded from the intermediary services on the health side. This is because when the HMOs came into operation, they started outside insurance by directly engaging their distribution and clients unlike insurance products which came through intermediary services and distribution channels such as brokers”.
He further said the NSIA health insurance was a pure insurance product which beats the issue of capitation which is a major problem faced by the health delivery sector in terms of financing.
Speaking on the product, the Managing Director, NSIA Insurance, Ebelechukwu Nwachukwu, explained that NSIA health Insurance, which was birthed through NSIA partnership with Cigna health, a Fortune 500 company from the United States of America, as part of the efforts to deliver an international health insurance services to Nigerians; takes into consideration the various health insurance needs of companies and ensures to satisfy such needs of company staff members wherever they are in the world.