The National Insurance Commission (NAICOM) is planning to license non-governmental organisations (NGOs) and market associations as other distribution channels to sell insurance and deepen penetration, its Commissioner Mohammed Kari, has said.
This is aside the newly-introduced policy by the Commission, the State Insurance Producers (SIP), aimed at empowering states to sell insurance as agents.
In an interview with reporters in Ibadan, Kari said the Commission was optimistic that the SIP policy would increase insurance penetration to about 300 per cent within two years.
He chided insurance operators, especially brokers, who are averse to the Commission introducing more distribution channels to sell insurance in the industry.
He said the operators should rather join the Commission to think of more channels to sell our business, noting that insurance was yet to get to the nooks and crannies of the country.
He said the SIP policy would aid the enforcement of compulsory insurance and provide jobs across the country.
He said the policy would also grow insurance contribution to Gross Domestic Product (GDP) and boost premium generation of the industry.
He further disclosed that the Commission would open offices in all state capital to support the states, adding that the Commission would build 20 new offices before 12 months to cover the whole country.
Kari said: “We should think of more channels to sell our business. We cannot continue to concentrate on only the ones we know like brokers and agents because they have exhausted their strength. They are only interested in corporate business.
“Some insurance operators, too, are more comfortable doing corporate business. They don’t want to go to my village to convince anyone to insure. They said they don’t want to go to Maiduguri for instance because of Boko Haram and this is one of the reason why SIP has become very interesting to us.
“The SIP has a juice and an incentive. The states are going to make Internally Generated Revenue (IGR). The good thing is that we are going to control what they are doing because they have been selling insurance illegally with insurance companies. But we will control how insurance is sold in the states. And to support them, we will open offices in all state capital. Before 12 months, we would have covered the whole country and we will build 20 offices.
“The biggest incentive to government to support this policy is that when they are licensed as an SIP, they will ensure of enforcement and also do their own local law to punish anybody who does not conform with our own law. Also, insurance companies must have offices there to get the business placed with them by the State. “
Kari said the SIP would create employment and the economy would boom.
“The SIP will create employment. Some landlords will get rent. You can imagine if every company we have opens two or three additional branches. It will improve insurance coverage. People that don’t know insurance will see signboard and ask what do you do and this way, insurance companies will have new converts.
“But, most importantly, they will be there to target other consumers other than the SIP. And because the state governments that will be generating IGR are there, employment will be created, companies will pay tax, people will go to the market and buy food and the economy will boom. It is going to be very likely produce almost 200 to 300 per cent increase in penetration within two years. We are also reviewing the other distribution channels. One of them is the NGOs and market associations. It will be huge,” he added.
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