Chuks Udo Okonta
The future and solidity of
the insurance industry can only come from market expansion, Managing Director
Riskguard-Africa Nigeria Limited, Yemi Soladoye, has said.
He told Inspen that the concentration on premium growth, as against market
expansion by insurance operators is inimical to growth.
He said operators often focus
on how to raise their yearly premium, abandoning the need to create expansion
through good services and people tailored products.
He said: “All the operators
want is to ensure that their premium for this year is higher than what it was
last year, and they are ready to spend anything to achieve that. If their
market position last year was number six and they move to number five this
year, their board would applaud their effort, not minding the cost.
“The companies cost of doing
business is indeed very high; the claims ratio is quite low. These are pointers
to the fact that insurance companies need something new and better.
“The issue of unhealthy
competition will be getting worst, until they look for better, cost effective
and non volatile distribution channel. This can be achieved by bankassurance
which is having collaboration with banks is a retail channel. It also means
engaging in strategic alliances with organisations, like Shoprite, Megaplaza
and others.”
He also urged operators to
initiate collaboration with cooperative societies and other relevant bodies to
deepen insurance penetration.
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