‘About 90 per cent motorists have fake insurance documents’

‘About 90 per cent motorists have fake insurance documents’

Insurance operators over the years are considered to be under performing in spite the enormous untapped opportunities available to them. The President, Lagos Area Committee of the Nigerian Council of Registered Insurance Brokers (NCRIB) Mr Tunde Oguntade, in this interview with CHUKS UDO OKONTA, says what the operators are doing to reverse the trend and boost their operations.

How has the insurance industry fared so far?

The industry has fared tremendously this year. Given the financial statements of some of the operators, it has been very wonderful, the claims experience has been high, that notwithstanding, it has also reflected in the gross premium income collected by most underwriters. Awareness is on the increase, the NCRIB and Nigerian Insurers Association (NIA) have been on the forefront and National Insurance Commission (NAICOM) is also augmenting through its media campaigns on Market Development and Restructuring Initiative (MDRI) all over the country. By and large, we want to see improvement in the new year, given the income and awareness that have been created across the land.

Are operators meeting their projections?

Given the state of the economy, I would say yes. The operators have done very well for the economy have been slow as greater part of this year was given to electioneering campaigns and the economic moved slowly. The operators have really tried, for elections years are indeed generally slow.

Have operators start reaping the benefits from MDRI? 

Retail wise no. This is because the level of patronage has been micro so far. The economy really determines what happens when it come to insurance penetration. But next year, as brokers particularly at the NCRIB Lagos Area, we are looking at talking to Chairmen of Local Government Areas, in the area of compulsory insurance, this is public liabilities for public buildings, fire insurance for tenanted buildings and the likes, and we hope that with that, we would enhance patronage. Ideally, when the purse is lean people should take insurance as an avenue to mitigate possible losses. But you found out that people do not take advantage of insurance. They have losses and they get poorer, because they did not take steps to mitigate such losses. We would continue to go to public places and create awareness. We are sure that next year, not matter how bad it is, we shall have benefits of awareness in terms of insurance patronage. We hope to talk to treasurers at the Local Governments to see insurance policy procurement as one of the requirements for obtaining tenement rates and the likes. We are going to talk with the fire brigade too.

What are the likely variables that will drive the industry next year?

The first thing is awareness campaign. And another thing is if we have a budget that provides or alleviates people poverty. There is so much poverty in the land we wait to see the implementation of the budget. That would help us analyse the position of insurance. But as it is, we are only waiting and watching.

Would the industry achieve its N1trillion premium target by this year?

The industry as a group may be able to hit the mark given the fact that they are now benefiting from insurance of oil and gas, aviation and the likes. Now, the local content allows much money to flow into the industry locally instead of the capital flight experience we used to have. With the inflow of forex and new accounts in oil and gas as a result of the Cabotage Act, we might meet the target. Also because of the MDRI, we might be able to have much more money flowing into our purses, especially now that micro insurance is developing and a lot of people are beginning to appreciate insurance, even though very slow, we should be able to meet the target. Even if we meet the target, we would still be less than seven per cent of the expected penetration.

Would the electronic vehicle licence really curb the menace of quacks?

The electronic licence is truly a wonderful development. This is because with it you would not longer get a fake certificate. The device would help to develop the volume of patronage, ensure that people get valid insurance cover and when people get valid insurance cover and claims arises and they get prompt settlement it would encourage them to look at other areas outside the statutory requirement. If people get settlement in third party, it would encourage them to look at luxury covers such as life, assets protection, fire and burglaries and the likes. It goes beyond the ordinary statutory cover – third party.  

What are brokers doing to boost capacity to meet requirement in oil and gas businesses?

Brokers have been attending trainings. A number of brokers were in Dubai in last month for oil and gas seminar. This year within Nigeria we had about four local training and seminars and individuals have been partnering with foreign firms to learn and facilitate their knowledge of the oil and gas industry. People are taking personal development drives and they are also using the industrial opportunities like seminars organised by NAICOM, NCRIB, HSBC and other avenues. Brokers are learning the roles and I am sure that in the next one or two years, we are going to have quite a number of brokers in that business.

How positioned are underwriters and brokers for emerging markets?  

The basic problem operators have in Nigeria is lack of data and information. When you talk of climatic changes, metrological services department is there to give information. The last time we had avian flu issues, the metrological services department provided information in good time that resulted in very low losses of poultry lives. I want to say that if the operators take advantage of all the information that are available to them, they would be in position to project and prepare for emerging risks. Agric insurance should be seen as emerging market in Africa. Basically, in Africa, we are farmers before all these inventions and the rest. Vet medicine has improved so much that livestocks do not die easily like it used to be. There are improvement in the area of livestock and the likes. The fear of catastrophe in livestock has reduced and I think operators should position themselves and take advantage of agric insurance and move on to the next level. This is because truly there is enormous income to be obtained from that area.

How is your partnership with security agencies on deepening awareness?

In our last annual general meeting we had discuss, with the Assistant Corps Marshal of the Federal Road Safety Commission (FRSC) who sent a representative. It was our initiative to create rapour with the agency. We wanted to know the position of brokers and underwriters in the new licensing scheme and the benefits. We started on a good note; we have seen that insurers are now properly placed in the licensing scheme. Now, you cannot have your vehicle licence renewed without a valid insurance cover. It is a good step in the right direction. Now that they have brought in the underwriters, the issue of agency would also be sorted out. It is a good step as it would lead to almost 80 per cent motorists buying insurance, even if it is just a third party. We welcome it and would collaborate with them and the same time, we are looking at a way of ensuring that brokers are properly located in the scheme of thing.

What is the per cent of fake vehicle certificates?

About 90 per cent of third party covers carried by motorists are fakes, so you can imagine the figure. Let us assume that we have 2 million motorists in Lagos and you have only 200,000 that have valid insurance cover. That is how bad it is, but it is not going to be like that any more.  Obviously, you can not drive your vehicle without a vehicle licence or less you want to drive at night, and when you do, there would be police out there for you. With the new system that FRSC is bringing, they do not need to stop you before they know that you have valid cover or not. So the initiative will bring lot of gains for the industry in the next year.

Are underwriters living up to their responsibilities on prompt claims settlements?

At this point, let me give kudos to the Commissioner for Insurance Mr Fola Daniel. I think in the last four years, the area of claims settlements has greatly improved. We do not longer have people dodging claims as they used to do. Now people are aware that once you give a discharged voucher, within thirty days maximum, you must release the claims cheque. Also I must tell you that the excuse for liquidating liability is getting few by the day. I think claims settlement is on the top priority of very serious underwriter, for that is the real test for efficiency of a valid cover. I think claims settlement has improved over the last four years.

How can the operators really raise the confidence of the insuring public?

I think the first thing is engaging on corporate social responsibilities. The operators should be seen and heard through such scheme. They should be involved in the lives of the ordinary people on the streets. Just as the banks go to the market places giving gifts to woo customers, we should also go round. We should also give scholarships to let people know that insurers have come to town. A side that claims should be settled promptly and there should be better cohesion and collaboration among the operators. We should give a better face to insurance practice.