The Nation Newspaper

Tag: MDRI

  • Insurance agents not tapping from MDRI

    Over reliance on insurance companies, poor use of technology, poor knowledge, poor image and lack of professionalism are major challenges hindering insurance agents from tapping into the opportunities in the Market Development and Restructuring initiative of the Federal Government.

    The National President, Association of Registered Insurance Agents of Nigeria (ARIAN), Ademola Fagbayi, made this known on the sideline of the association annual conference held in Lagos.

    Consequently, he said the association would embark on series of training as they strongly believe that agents need to update their knowledge of technology.

    He said he hoped to increase the membership strength of the body’s 10,000 before leaving office just as he called on agents to explore the untapped opportunities in non-life insurance business.

    He said: “The National Insurance Commission (NAICOM) through MDRI has provided great opportunity for insurance agency practice in Nigeria. But the question is how well are we leveraging on it’? Insurance agency in Nigeria has not been able to achieve her full potential because of some major challenges.

    “According to NAICOM’s report, insurance density in terms of insurance premium as percentage of the gross domestic product (GDP) stands at 0.225 per cent. Total policy holders are about 1.5 million. Total premium in 2015 was $1.87 billion which ranked Nigeria at 64th in the world. Insurance penetration in Nigeria is 0.6 per cent, Kenya is 3.4 per cent, and South Africa is 15 per cent while Egypt an Islamic nation is about 13 per cent. The implication is that over 90 per cent of Nigerians don’t have any form of insurance.

    “Nigeria’s population stood at 173.6 million according to 2013 population Census. We may probably be between 180 to 200 million currently. Demography: 60 per cent of Nigeria’s population are below 65 years with over 105 million working class. Obviously Nigeria has massive potential for insurance business growth. No wonder some foreign insurance company are making inroad to Nigeria. The challenge that we have in the industry is how to transform the opportunity to business”, he added.

  • 20,000 agents unlicensed, says Olamerun

    20,000 agents unlicensed, says Olamerun

    NO fewer than 20,000 unlicensed agents transact business in the country, the new President, Association of Registered Insurance Agents of Nigeria (ARIAN), Mr. Gbadebo Olamerun, has said.

    He has therefore  called on insurers to ensure that their agents are licensed by the National Insurance Commission (NAICOM).

    Olamerun, who disclosed this at his investiture in Lagos, said his target along with other new executives is to register 20,000 agents at the end of 2015. The association currently has 3, 000 registered agents.

    His position is hinged on the belief that increasing the number of registered agents with NAICOM will increase premium collection which will lead to increase in insurance gross domestic product (GDP) contribution in the country.

    He said: “My vision is to make insurance agency business easy by collaborating with other stakeholders in and outside the industry, especially with state governments, NAICOM, NIA, CIIN, NCRIB etc to foster the deepening of insurance penetration in Nigeria. We will also collaborate with my constituency, the agents, in introducing interactive session with all insurance agents tagged: Members Evening Initiative (MEI), which will be a quarterly strategic session where agents will be hosted by one of the leading insurance companies.

    “This drive will afford all the major players in the industry opportunity to meet with the agents, increasing their capacities, give them a positive mind set and sense of belonging.

    “As we speak, we have 3,000 registered agents with NAICOM and we project that by 2015, we would have registered  20,000 agents into the books of ARIAN and NAICOM.”

    On the Market Developmental Restructuring Initiative (MDRI), he noted that the association will drive the project with a national holistic view of mobilising all insurance agents for its execution.

    Speaking further, he said his leadership will continuously equip its members on the skills needed to sell insurance business to the grassroot

    He said: “We will also ensure agents are certified by CIIN because we have been able to push for a reduction of the amount for the proficiency test certification which is the most expensive requirement for agent’s registration with NAICOM.

    ‘We also want to add value to agency network by recruiting more matured executives such as retired personnel and retrenched bank staff to market specific products such as annuity.

    “The era of commission only aided and abetted sharp practices among some agents which have affected the image of the insurance industry. However, ARIAN has set up a portal in its website to check the activities of members, relate with HR of each organisation, and collaborate with the insurance companies to reduce sharp practices to the barest minimum.”

    Chief Olusola   Dada of Anchoria Investment and Securities Ltd called on insurance companies to expand their networks to the rural areas, adding that most people in the rural areas are still very ignorant of the importance of insurance.

    He said that insurance is still very strange to the people in the rural areas, adding that with the issue of financial inclusion, insurance operators must go beyond what they are doing to boost insurance penetration in the country.

  • ‘MDRI is achievable’

    DESPITE the challenges facing the economy, the N1 trillion premium target of the Market Development and Restructuring Initiative (MDRI) project is still achievable, the Consultant to the National Insurance Commission (NAICOM) on MDRI, Mr Yemi Soladoye, has said.

    The project is expected to boost industry capacity, market efficiency and consumer protection in the insurance market.

    Soladoye told The Nation that the initiative would grow the market and move the industry’s gross premium from N164 billion to NI trillion.

    He said the insurance firmes were making sales in the five compulsory insurance.

    However, he said, he does not believe the economic problem in the country is thwarting the insurance companies’ efforts in achieving the desired results or the sales of compulsory insurance policies, adding that companies such as Mutual Benefit, Leadway Assurance, were making good sales.

    He said: “I disagree that the economic condition can frustrate the efforts of the underwriters in selling these products because, if this is the case, it will affect the economy. Whether the economy is good or not is debatable. Some people and institutions are still making a lot of money from the system.”

    He noted that the underwriters only need to be persistent in insurance marketing for them to surpass the target

    “I know that some of the underwriters are making efforts in ensuring the set goals in the industry are achieved because they call me for clarifications. Based on my conviction, I am sure that they will meet the target.

    “All they need to know is that the businesses that would make the N1trillion achievable lie with everybody and the industry that have not taken insurance before because each person have needs. They should stop asking where the business is in a country of over 150 million people. If insurance companies target 10 million Nigerians for one form of insurance or the other or for one single product of which they would pay an average of N10,000, this will go a long way for the industry,” he said.

    It is expected that the programme will enhance citizens’ access to relevant, affordable and problem- solving insurance products and lower insurance gap from 94 per cent to 70 per cent.

    The products are occupiers liability (public buildings) insurance, which protects third parties and commercial users who may sustain bodily injury, death or property damage as a result of fire, flood, earthquake storm or collapse of occupied private business and public premises.

    Builders’liability insurance, which protects the site workers; third parties and members of the public from construction-related risks, including collapse of buildings under construction.

    Employers’liability insurance, which protects the labour force, especially the factory workers from work-related injuries and sickness occurring in course of employment.

    There is also the statutory group life insurance policy, which is meant to protect the public and private sector employees, who may die, become mentally or physically disabled or disappear while still in service

    Also, the health care professional indemnity insurance, which is meant to protect the National health insurance scheme patients from the errors, negligence and acts of commission or omission of medical practitioners and institutions.

  • MDRI’s success rate hits 75%

    The Market Development and Restructuring Initiative (MDRI), a programme adopted by the National Insurance Commission (NAICOM) to drive insurance penetration in the country, has recorded up about 75 per cent success, the Managing Director Riskguard-Africa Nigeria Limited, Yemi Soladoye, has said.

    Soladoye, who made this known at a media parley in Lagos, said the initiative is a turning point in the industry, adding that with the initiative, operators, regulators, service providers and the government, have realise that there is something going on in the industry.

    He said prior to the introduction of the MDRI, operators were leading the industry, but with the initiative, the fear of the regulator has become the beginning of wisdom.

    He said: “MDRI is also a turning point because it is from that stage we saw the regulator leading the market. There is a united focus for all of us. Whether you adopt it or not, we all know that there is a project on ground and there is a destination to reach and there is a direction as to the way we can go for us to secure increased penetration for insurance business in this country.

    “The initiative is a watershed in the history of the industry and it is also an evergreen thing. You cannot wish it away, as it has brought about many developments. When you read the strategy document, you would see that micro-insurance is part of the area that was recommended as where the industry will get development.’’

    Soladoye described Takafu as an aspect of the initiative. ‘’As MDRI is targeted at restructuring, all the restructuring that are happening in the market are embedded within the programme,” he added.

    He lauded the efforts of the Commissioner for Insurance, Fola Daniel, saying prior to his appointment, the best the industry had on the premium income was 24 per cent increase, but it has increased to 36 per cent.

    He said the results in the past five years that the Commissioner has been in the saddle, is an indication that the industry will meet its projections.

    He said with the industry’s projection, by the time the insurance firms that are engaging agents start operations, there will be an increase.

    He said as at December 2009, NAICOM had about 1,695 registered agents with different insurance firms, but that a year later, the number increased to 3,404. Despite the success, more firms are yet to embrace retail marketing, which he said, remains a panacea to the industry’s growth.

    “The insurance companies feel that retail system is not the area they want to adopt, despite the fact that the regulator has put in place for them a lot of incentives to make them go into agency recruitment. NAICOM does not have underwriting license neither does it, any brokering licence.

    “The regulator has done all it could, believing that this is what is operating ease where and if underwriters adopt the initiative we will get there. From the reports available to us, we have observed that the underwriters are realigning to embrace the initiative,” he said.

    He said the MDRI has not ended, stressing that there was a delay in the implementation and that the industry will adjust to meet the set targets.

  • Insurers seek compliance certificate to enforce MDRI

    Stakeholders in the industry have called on the National Insurance Commission (NAICOM) to introduce compliance certificate in its review of the Market Development and Restructuring Initiative (MDRI) to ensure full enforcement of compulsory insurance.

    They said the introduction of the certificate would make the public bidding for government’s businesses comply with the law on compulsory insurance.

    President Chartered Insurance Institute of Nigeria (CIIN) Dr. Wole Adetimehin, said the MDRI needs law enforcement to thrive. He said the presentation of compliance certificates by individuals bidding for government’s businesses, have helped in adherence to group life policy of the Pension Reform Act 2004.

    He noted that for the public to comply with the compulsory insurance, NAICOM should ensure there is a law.

    President, Nigerian Council of Registered Insurance Brokers (NCRIB), Mrs Laide Osijo, called for collaboration with the government in the enforcement of the compulsory insurances in the MDRI.

    She noted that though NAICOM has helped make some insurance compulsory, effort should be intensified on the enforcement of the laws.

    She said: “I think the government has a lot to do. Some of the compulsory insurance are not enforced. NAICOM has tried in supporting the industry, by making some businesses to be compulsory under the MDRI. But the implementation and enforcement lie with the government at state and federal levels.”

    The Commissioner for Insurance, Fola Daniel, has said NAICOM will review the guidelines of the MDRI to align it, for better performance. He said the review is one of the commission’s programmes for the year

    He however declined to give the time table for the review and release of the guidelines.