Laide Osijo is the first female President of the 50-year-old Nigerian Council of Registered Insurance Brokers (NCRIB). She is also the Managing Director/Chief Executive Officer of Plum Insurance Brokers and Principal Partner, Laide Osijo & Associates. Osijo spoke with Omobola Tolu-Kusimo on issues, problems and challenges facing the industry.
You are the first female president ofthe 50-year-old Nigerian Council of Registered Insurance Brokers (NCRIB). By October, you would have spent two years in office. What are your achievements so far?
First of all, I will like to state that I have been in the council for about 17 years before I became president; so I will say I know the in and out of the council. As the first female president in the 50 years of existence of the Nigerian Council of Registered Insurance Brokers (NCRIB), my interest is to have a new NCRIB filled with many positive changes that can add value to our noble council. I have been able to improve on some of them; therefore, aligning the institute at a better pedestrian. As a female president, I knew that I have to prove a point by abiding to the ethics of the profession and being hardworking. I needed to set an example so that other female members will be given the same opportunity given to me. I try to be dedicated by having passion for what I do which further gives me the inspiration to forge ahead. Part of my vision in moving my broking fraternity to the next level is by ensuring that the members adhere strictly to ethics and professionalism. Right now, the standards have changed and brokers practise professionally. Before now, there are many areas that brokers normally err that cause problem among stakeholders, such as the National Insurance Commission (NAICOM), the Nigeria Insurers Association (NIA) and other arms of the industry. But things have improved. Today, it is a positive story for us in the insurance industry because brokers are respected. The issue of brokers not paying premium to underwriters is no longer in existence because they know that if they are reported to the authority, they may be suspended.
Secondly, there was an uncompleted structure of the council when I came in. We used to be in a bungalow. My predecessor, Alhaji Sanusi Teslim, started it, but it was not completed before he left and I made sure I completed the building. I added my feminine touch and it resulted in great cooperation with NAICOM. The council got a lot of support from the Commissioner for Insurance, Mr Fola Daniel. We had a particular problem with some of our members. There is an aspect of the NCRIB law that says the registration of a broker is precedent to issuing of licence by NAICOM. What this means is that they must be a registered members of the NCRIB before NAICOM can issue a practising licence. Before I came herec a lot of brokers go to NAICOM for licence without registering with the Council. They refused to adhere to our law. But when I came in, I built a good relationship with NAICOM and this warranted them to allow me operate that aspect of our law.
But why did NAICOM do that?
I cannot blame NAICOM. Our members were not practising professionally and ethically and so there were loopholes for them to take advantage of. I must state that it also depends on the leadership. You must know what you are doing. The law is there to assist us. There is no need to confront your supervising authority if what they are doing is enforcing the law. You must be able to interact with them in a friendly manner and not through confrontation. There must always be dialogue even if they fail to understand or they don’t want to understand for one reason or the other which I may not be able to explain fully here. As a result of my dialogue with NAICOM, a lot of brokers have returned to the Council to register. Everybody started coming and this gave me the opportunity to collect enough fund to finish the secretariat building, which has become every broker’s pride today. Those who had the certificate with NAICOM without collecting our own had to pay and this gave us a lot of money to do all that is required of the Council.
How have you added value to the members now that you have funds?
I have been able to add value to our members and the insurance industry generally. From our own end, we began by keeping the brokers informed on what can influence them to generate income. We empowered the Area Committee chairmen in the six geographical zones of the country by visiting them and opening their eyes to what they can achieve. By the time I put them through the vision I had for NCRIB, they all listened to me and started participating in events within their area chapter, which is the best place to reach the grassroots. In the area of penetration of insurance to the grassroots, I let them know that it is only the area chapters that can help the Market Development and Restructuring Initiative (MDRI) by NAICOM, which is also aimed at improving insurance penetration and services required in Nigeria. This is expected to increase the Gross Domestic Product (GDP). Brokers no longer run after the government account. They realise that there are lots to venture into than running after such account because there are lots of things in the grassroots. In compulsory insurance, I also introduced the area chapter into it which has in turn improved their income generation. These are some of the areas where we have added value and today, all of them want to become members of NCRIB. At present, everything is working. Our website is working, human capital has improved, all the Area Chapters are working and everybody wants to belong to the Council.
How many members have you been able to get back?
When I got in there, there were so many of our practising members that were not paying their dues for up to five years. Today, I have over 450 members who were inactive before that are participating financially. The leadership was aggressive and also set good examples in terms of integrity and professionalism. I never stopped at that. I went to the state government where we have our state chapters in the western areas, which consist of Ondo, Ekiti, Ilorin and Ibadan. I took them to the state government and introduced them for patronage. But I told the government that in case there is any erring member, they should not hesitate to report to the Council. Now most states are patronising my colleagues. I did the same thing in the East, North and Abuja. My intention is to build an institution not individual, an institution that will outlive my tenureship.
What is the relationship between your members and NAICOM?
There is a fantastic collaboration with NAICOM and NCRIB members. I commend the effort of the commission. The commissioner, Fola Daniel, has done well for the council by effective collaboration. He carried us along. We dialogue on issues that will enrich us and better the industry. Gone are the days when you will see us attacking each other. I am bold to say that we have witnessed some peace in the last two years of my tenure as the president. There is a joint committee, which I found with NIA and we meet quarterly to discuss issues that could affect the profession of the industry. So, we discuss any issue and tackle it instead of fighting.
But some of your members are not happy with the regulator because they believe it does not carry them along. They accuse the commissioner of making policy decisions without their input.
There is the NCRIB Act, NAICOM Act, and Insurance Act. If you want to challenge anything, you need to read all these laws. I am a lawyer; so, if I want to argue on certain things, I will look at the position of the law. Those who feel otherwise by what the regulator is doing should check the position of the law. What are they doing that is not in the law? I do not agree with them in the area of not consulting them before things are done. I am the president and rarely will the regulator do things without consulting us. But if there are rules and some certain administrative things that NAICOM needs to do, they do not have to consult us. Do I have to go and consult people on what is in the law? It is for the aggrieved members to pick the Act and read. If it is what is in the Act that Fola Daniel met that he is doing except they are doing something that is outside their jurisdiction, then nobody should query him for that. What people don’t want is change. Human beings are naturally resistance when it comes to change. Let me give you a typical example, some people called me that NAICOM penalised them on certain things. These were things that the commission had sent us letters and email. We went ahead and put the information requirement on our website for our members to carry out. How do you now blame NAICOM? Even the commissioner told us to ask them for further extension of time whereby we will do reconciliation, which we did. If after the extension, NAICOM now querries you for not doing the right thing, will you begin to say they did not carry you along? It is change that is affecting them. The same problem applies to the issue of ‘no premium no cover’. It is all about the change that is affecting them. The law has been there but the predecessors of Daniel did not follow it and if he decided to do it because he feels it is what will stabilise the industry, there is no way I will begin to fight him. Our GDP is under one per cent despite a fantastic population of over 150 million. If the supervising authority decides to search for reasons and now brings ways of improving on the stability of the industry, are you supposed to blame them? I am a very realistic and professional person to the core and I want my children in future to read insurance.
NAICOM began enforcement on ‘No premium, No cover’ policy in January and we have just gone past the middle of the year. Have your members been able to adjust to the policy?
Yes, they have adjusted. We cannot afford to continue to discredit ourselves in the industry like we have been doing in the past. We grant insurance cover and credit and some insured will not pay in the long run. When it is time to settle claim, we don’t have money to pay for it. Insurance is strictly on ‘a cash and carry’ basis and my members dare not take premium without remitting it to the insurance company. We are professional brokers and not agents. NAICOM has directed that within 48 hours, we should report the premium to the underwriter, but we have one month within which you should pay the money to the underwriter. Some of our underwriters too are used to the idea of pocketing premium and thereby give bad image of the industry to the public, but I believe if you have been doing it well from the beginning, you will see this change as an act of professionalism and ethical behaviour.
Has it reduced business for insurance operators?
It is just the first year and so it may reduce business, but we are optimistic that by 2014 it would have improved. This is because the clients who have refused cover this year will prepare him or herself for next year. Most of my colleagues have been telling me that they have never had it so good like this in the previous years. By the end of the first quarter, they had a lot of money in their purse. As it is today, no underwriter issues you with cover if you do not take your money there and that means as a broker, if you pay premium to the underwriter, you get your commission on time. It is so good that even the Nigerian National Petroleum Corporation (NNPC) has paid premium before the effective date for renewal of their policies. They paid as early as March this year and the policy renewal date was April 1. Everybody on the NNPC account has taken their money and they are happy. So, definitely, when claims occur from NNPC, it will be paid immediately and it goes round the country like that. The public is benefitting.
Have your members been able to take advantage of the Local Content law?
We have taken advantage of it, but not yet to the fullest. The local content law says brokers should be used for the NNPC insurance. We used to be there as brokers doing NNPC account. After some time, there were some controversies and brokers were stopped from getting it. But thank God the local content came up and brokers were given the opportunities of coming back again and they were being patronised by NNPC. The first year they had it again was in 2010 and about 32 brokers were appointed. The second year, about 15 brokers got the account. The members complained to me because I was already the president then and I wrote a subtle letter thanking them for those that were appointed and appealed to them to accommodate more brokers. I told them that most of us were going for oil and gas courses so they should increase their human capital by exposing us. Am sure they treated our case after that letter and this year they appointed over 40 brokers and they have paid them. They also allowed the brokers to go and place the business abroad. This is an improvement and I commend them.
There seems to be no end to the problem of rate cutting and even NAICOM has not been able to do much about it to the extent that some brokers and underwriters accept as low as N3000 on third party motor insurance. Why is this so?
To tackle the problem, we need to ask ourselves who is responsible to the acceptance of a risk. It is the insurance company and not the broker. This problem was not there in the 70’s. In those days, when a broker brings business to an underwriter and demands low rate, nobody will accept it from him. But because of unethical behaviour and bad competition that exists today in the name of getting money at cost, rate cutting has become a menace in the industry. The problem can only be solved when underwriters begin to reject low rates from brokers. How can somebody bring a hazardous risk to you and you charge a non-commensurate rate? There is no way you can pay claims when it occurs. The underwriters are supposed to reject it. It is not the broker that dictates rate and if all of them reject bad rates, brokers won’t have any choice but buy the policy at the rate they have quoted. It is high time underwriters know they are the architect of their own problem. Let us go back to status quo, the way our elders have been doing it. The regulator cannot come into the aspect of rate cutting because some of the operators will say it is none of their business as the law did not state that they should be told how much rate to charge.
The Federal Government still owes premiums on group life. We expect people like you to come out and oppose this, bearing in mind that NAICOM as the adviser to the government on insurance cannot do much to its own boss. What have you been able to do about this?
I can recall that sometimes in 2011, I took my members to the Head of Service who was the permanent secretary then. As at that time, they never paid at all. It was a week after we went there that they realised about 50 per cent. I thanked them and asked for more like Oliver Twist – that the remaining money should be paid and it was in the papers. I was very blunt about it because there were so many outstanding claims. They cannot ask us to pay outstanding claims without the premium being paid.
Do they ask you to pay claims when they have not paid premium?
Yes, they asked us to pay. You know it’s not the head of service that will come and ask you to pay but the institutes or parastatals, MDAs that we are dealing with. They will be sending you outstanding claims because they may not know that premiums have not been paid. They were reporting some of my brokers to me and so it was for me as the president to tell them premiums have not been paid.
But the premiums are yet to be paid. I am aware that there are outstanding premiums to be paid for 2010, 2011 and 2012 when they have not even sought for insurance for this year?
Yes, but what more can we do? We cannot move to President Goodluck Jonathan to go and ask why? We can only continue to talk and several newspapers are reporting it too.
At the national level, it means that government workers do not have insurance?
Yes. They don’t have insurance because ‘no premium, no cover’ already bans us from granting cover, without premiums being paid and we are standing by it. There are so many losses. For example, in this year, there was a Ministry which use to have insurance renewal period in January. They thought the ‘no premium, no cover’ was a joke. They did not pay until April and they wanted. They wanted underwriter to backdate it for them, but the underwriter said no, gone are the days that such things happen. It is when you pay premium that you begin to get cover. This is a beautiful thing to happen to the insurance industry. We have advised government. The commissioner for insurance, NIA president and I addressed the MDAs in Abuja before the enforcement began in January and we advised them on what to do. It is left for them to follow our advice. With this, there will be great stability in the insurance industry and the N1 trillion premium target will be achieved.
Some experts have described the insurance sector as underdeveloped. What is your assessment of it compared to other sectors of the economy?
We are to develop the industry ourselves. But we can’t do that when the regulator comes up with regulations that will change things for good. We should psycho-analyse ourselves as practitioners to develop it. We don’t need anybody outside the sector or country to come and develop it for us. Let us adhere strictly to some of the acts that join us together. When we want to criticise, it should be done constructively. If we can do this, our sector will dominate other sectors in the country because insurance is usually one of the most buoyant sectors in developed countries
You have about two months to go, what are the things you will still like to achieve before you leave?
My compendium for the broking fraternity is on the way. There are windows of opportunities. You can become a broker. I have my Annual General Meeting coming up and, above all, I need to continuously instill acts of discipline in our staff and members.
