Underwriters, intermediaries on collision course over commissions, fees payment

Underwriters, intermediaries on collision course over commissions, fees payment

Chuks Udo Okonta

Underwriters and insurance intermediaries are in for a showdown over the payment of appropriate commissions and fees Inspen has learnt.

Investigation revealed that the intermediaries - brokers, loss adjusts, agents and risk surveyors are not comfortable with the present fees and commissions being paid by underwriters. It was also gathered that most of the intermediaries’ entitlements are withheld by underwriters.

It was learnt that brokers early in the year took their complaint on group life commission to the National Insurance Commission (NAICOM), demanding for an increase. NAICOM in response to the complaint asked the underwriters and brokers to agree on a fixed rate and intimate it their resolution. The Nigerian Insurers Association (NIA) and Nigerian Council of Registered Insurance Brokers were mandated to use a single letter head paper to inform NAICOM on agreed rate which the commission should be pegged. But efforts by the NCRIB to meet with NIA for the development of the letter were unproductive as NIA turned down all meetings. The development made NAICOM to peg the commission at eight per cent and mandate the operators to comply with the fixed rate, which brokers were not comfortable with.

President Risk Surveyors Association of Nigeria Jacob Adeosun, who expressed misgivings on the impasse between underwriters and surveyors on fees, called for an agreement on an equitable scale of fees, adding that the inappropriate remuneration of surveyors would lead to exit of experienced practitioners from the industry.

He noted that survey fees are not paid as at when due by underwriters, stressing that the quantum of unpaid receivables is capable of impairing the efficiency of surveyors service delivery.

Chairman Technical Committee NCRIB on Market Development and Restructuring Initiatives (MDRI) Siyan Oyebadejo, said poor remuneration to insurance agents by underwriters is threatening the MDRI meant to proper insurance growth.

He noted that unless something drastic is due, the initiative would fail to meet the industry’s expectations, adding that the committee has recommended to NAICOM, the need to urgently increase the remuneration paid to agents who are the drivers of the initiative.

He said is it worrisome that graduates engaged as agents are given pie nuts which cannot move them around to market the initiative and win businesses to their employers, noting that the initiative will only succeed if the agents are properly motivated.