The renewed campaign to rev up public confidence in the troubled insurance sector may amount to mere “dress rehearsal”, with no fewer than 13,000 fake insurance agents soliciting policies in the midst of few registered ones.
With the sole intention of ripping off intending policyholders of their belongings in return for fake coverage and alarming level of discoveries that many vehicle policy certificates are fake, it is now time for the sector’s regulators and stakeholders to act.
Specifically, out of the estimated 20,000 insurance agents operating in the nation’s insurance industry, only about 7,000 are registered with the Association of Registered Insurance Agents of Nigeria (ARIAN).
This means that the sector is not only underserved, with intending policyholders not being reached, but also a fertile ground and opportunity for underhand dealings, as each of the unregistered agents can snap huge business and abscond.
Already, the insurers have expressed worry that the industry is under-served with just about few registered with ARIAN, while others are parading the sector with the intention of collecting money from potential policyholders.
According to them, this might not be enough to make the sector achieve its set goals, especially in the ongoing re-branding project embarked on in the industry.
They noted that the number of agents in Nigerian insurance industry is low compared to what obtains in other countries, adding that this shortfall is one of the factors undermining insurance penetration and growth in the country.
Speaking with The Guardian on the development, the former President of ARIAN, Gbadebo Olamerun, affirmed that there are “about 20,000 agents servicing a buying population of insurance consumers, but only about 7,000 registered, whereas India has about 1.9 million agents, while South Africa has about 400,000 agents.
“I can tell you for a fact, that some individual companies do not have up to 200 agents. This is so because the funds that are meant to be invested in doing all of these things are not being applied to that.”
Speaking in the same vein, Chairman of Nigerian Insurers Association (NIA), Eddie Efekoha, said that in Hong Kong, there are over 25,000 agents servicing a total population of just 17 million people.
“In Hong Kong, insurance contributes substantially to the GDP of the country. Over there they have over 25,000 insurance agents which greatly enhanced insurance penetration in that country. These are things that we should begin to implement in Nigeria,” he said.
On why the Nigerian market has limited agents, an industry stakeholder, Mr. Salami, said: “For too long in the industry, everybody focused on corporate business. It was cheaper to run corporate insurance and just be getting business from the public sector. But now, we see that we need to go way beyond that, so several of us are making the required investment in distribution of insurance.
“We need to deliver value and good service to customers because they can also become our ambassador in getting other people to come and buy insurance because things are changing. The insurance industry of today, regarding claims is not the insurance industry of five years ago.”