Seven firms to change insurance with retail practice

Chuks Udo Okonta

Seven insurance firms are paving the way for transformation of the insurance industry through retail practice, the Managing Director Riskguard-Africa Nigeria Limited Yemi Soladoye, has said.

He told Inspen that the transformation which is a proceed of the Market Development and Restructuring Initiative (MDRI), would bring about tremendous change in insurance practice, adding  that more operators are embracing retail practice, having observed that it is the way forward for the industry.

He said: "I know seven operators that have embraced retail insurance and they are really doing well presently. A particular company is ready to establish 200 offices between now and 2015. It is ready to generate 22,000 employments in the retail market."

He said there are enormous untapped business opportunities within professional and cultural groups which can boost the profitability of operators.

He noted that the business culture of operators has stemmed the growth of the industry, adding that the operators are comfortable with going to brokers to collect cheques, which is unhealthy for the industry’s growth.

"The business culture of operators has not helped the situation. The operators like going to a broker to collect cheques, forgetting the fact that under the Market Development and Restructuring Initiative (MDRI) there is focus on groups and alliances. Take for an example, a group like the Nigerian Bar Association (NBA), I am sure it has about 20,000 members, if an insurance company designs a product for all members of NBA, and each of them pays N10,000 in a year, that would amounts to N200 million.

"The cost on this type of business is always low. This and many other types of business initiatives are what the MDRI focuses, which the underwriters are slow and failed to adopt," he said.

He noted that for the industry to thrive, the operators must embrace new trends and strengthen their retail marketing strategy.

 “There are three things that are lacking in our market why it has not developed and until they are adopted the market cannot develop. The first thing is full adoption of retail insurance. The second is full adoption of retail insurance and third full adoption of retail insurance.

“There is no other thing. We have a population of over 170 million people. Unless underwriters understand that insurance is like banking which focuses on retail and create access to insurance products, through the foot soldiers, wide spread offices, train people to sell products, give good services to customers, design and develop products that are relevant to the public and enter into strategic alliances with no traditional channels -what we are doing is using brokers who only engage in corporate and government business to distribute our product.”