In its determination to expand the scope of insurance distribution channels in Nigeria and deepen insurance penetration, the National Insurance Commission(NAICOM), has said that it will still make use of its recently withdrawn State Insurance Producer (SIP), to push insurance policy to all states of the federation.
This is expected to take insurance services to where the policy is currently underserved.
The Commissioner for Insurance, Alhaji Mohammed Kari, disclosed this at the recent 2019 National Insurance Conference held in Abuja. He clearly stated that the withdrawal of the SIP policy did not mean death of the initiative.
Kari, noted that the initiative was one of the elements in the Market Development and Restructuring Initiatives (MDRI) the commission wanted to leverage to deepen insurance penetration.
But in reaction to the comment, a broker and Treasurer, Nigerian Council of Registered Insurance Brokers (NCRIB), Mrs. Ekeoma Ezeibe, reminded the Commissioner that the circular sent to brokers by the commission last December to the SIP had stated that the initiative had been cancelled, wandering why the commission decided to exhume the initiative deemed to have been dead.
She cautioned the leadership of NAICOM on the new move, stressing that the commission should be careful not to take any step that would result to a challenge to the entire industry, in its bid to expand penetration.
She also called for collaboration between the commission and brokers to ensure the new move works in favour of all stakeholders.
THISDAY noted that since the idea of SIP was muted by the commission as a distribution channel, even before the release of the guidelines, there have been unease among insurance brokers over fear of reducing their relevance in the insurance distribution chain.
Since the advent of insurance business in Nigeria, insurance brokers have remained the sole distributors of insurance products. Their effort was being complemented by the services of insurance agents, but most members of the insuring public lack confidence in insurance agents due to issue of integrity and continuity in policy administration.
But, Kari said the commission, having examined the rate of increase of the industry’s premium income, observed that there was hardly any other alternative to enhancing the premium and deepening penetration other than partnering the state governments in the distribution of insurance products.
He said the initiative, would help to spread insurance to states where there was no insurance presence at the moment. Kari told brokers that the commission would not relent in ensuring that there are multiple channels of distributions of insurance products, stressing that narrow channels had continue to clogged the spread of insurance products.
NAICOM had on December 20, 2018, announced the withdrawal and cancelation of the SIP. The insurance industry regulator had stated this in a circular signed on behalf of the Commissioner for Insurance, by the Director, Policy and Regulation, Agboola Pius, entitled, Withdrawal of circular on State Insurance Producer Operational Guidelines, with reference number, NAICOM/DPR/CIR/20/2018 December 20, 2018 and sent to all insurance institutions.