Every month, over 100,000 Nigerians buy insurance products through mobile telecoms service provider, MTN, the National Insurance Commission (NAICOM) has said.
Speaking yesterday at the ongoing African Insurance Organisation (AIO) Conference and General Assembly in Kigali, Rwanda, Commissioner for Insurance, Fola Daniel said other telecoms operators should emulate MTN and use their network to deepen insurance penetration in the country.
He spoke as other countries on the continent deliberate on how to join the rest of the world to market insurance through mobile telephony by partnering with telcos.
The insurance regulator said if insurance companies partner other service providers to sell as much as MTN currently sells, the sector can sell more than 250, 000 products in a month. He said it will also reduce operational cost of insurance companies which has remained a challenge for risk bearing sector.
He said: “We are beginning to see impact of MTN deployment towards selling insurance in our market and this will bring huge market for us. We are getting 100, 000 new sales, and if we have four other service providers doing what MTN is doing now, then we can have rapid growth. So deploying IT and telephony to sell insurance is the wise thing to do now.”
“Apart from reaching people faster, the administrative cost on the companies too is very small. One of the issues among companies in (the) Nigerian market today is the cost of doing business which is very high and above average, one of the highest in Africa.
“So if we find a means of selling more of our products without incurring much cost it will be better for us.”
According to him, micro insurance is another area telephony will work well because the premium paid is very small.
He said: ”If companies can deploy the same model to sell micro insurance, it will be a win-win situation for everybody “We are not unaware of the challenges of using partnership to drive mobile telephony as highlighted in this conference, so we have taken our time to scrutinise any partner enlisted by the insurance companies before giving approvals.
“Whatever agreement any insurance company is having with anybody must be communicated to the Commission for vetting.
“What we are looking at is whether the interest of potential buyers is protected, if not, we won’t approve it. We kept one or two applications for over six months because we were not satisfied.
“Until we are satisfied that the agreement entered into by the service providers and the insurance company passes our test of protecting the policy holders, we won’t let go.”
He said beyond that, NAICOM also insists that companies must make quarterly returns and bring consumer complaints to its notice through dedicated phone lines.
According to him, aside the compliant bureau, NAICOM has set up a contact centre managed by professionals.
He said: “If you buy a policy through telephone, you must have the same medium to contact NAICOM for complaints. So, we will phone the company to find out why they have refused to pay the claim, and unless we do this on time, Nigerians will be disappointed.”
Daniel said the Commission will continue to improve on its rating, looking at other authorities in Europe and America as standards. According to him, the International Monetary Fund (IMF) gave an evaluation on its regulatory capacity in 2012 and got an average which is okay. “But we are not satisfied because we should be above average, but at least an evaluation has been done and we know our weak points and our strength, so we are looking at the gaps and doing everything to block the gaps,” Daniel said.
