Some customers, who connive with insurance brokers, are endangering the insurance industry by allotting proportion of risk to local underwriters without due cognisance of the insurers’ capacity. They also place risk abroad when the local market is not saturated, commissioner for Insurance, National Insurance Commission (NAICOM, Mohammed Kari, has said.
Kari, who spoke while addressing journalists in Lagos, said some insured, in alliance with intermediaries, chose to exclude some underwriters from participation in underwriting certain risks without cogent tenable justification. ““Some insured in alliance with intermediaries, chose to exclude some underwriters from participating in underwriting certain risks without cogent tenable justification
“Once the consumer places his risks with the insurer, whether direct or through a broker, he or the broker has no role in the placement of the reinsurance,” he said.
He warned the insured that the Nigerian Insurance space should only be occupied by Insurance institutions licensed and regulated by NAICOM. “We would not accept insurances placed through a non-licensed operator in this market,”he warned.
He said the practice is not in sync with the sector’s ethics and is detrimental and dangerous to the sector.
The Commission, he said, frowns at the practice, warning that such consumers should desist from it as they run counter to the sector’s regulations.
He said: “Where we have noticed such practices, we have rejected applications from operators for approval to cede such risks abroad. This action of the consumer and broker sometime leads to delays in placement of the risk even when the insured has paid its premium to the intermediary. While the Commission is not averse to ceding of risk offshore, it must be done only when the local market has taken the much its capacity would allow.
“Other areas where the Commission has issues with the insurance consumers are delays in submitting evaluation results of bidding processes to the Commission, the emerging practice of supposed premium funding by local brokers on behalf of the insured and delays by the insured in issuing placement and renewal instruction to the insurer. These delays, more often than not, make it impossible for the insurer to meet the application period for the placement of excess risks offshore where applicable.
“These are trends that are not only dangerous to the industry, but to the consumer. We ask you to desist from these practices because they are neither in their best interest nor that of the insurance operator and of course, that of our nation.”
He craved the understanding and cooperation of consumers to ensure compliance with insurance laws and regulations, particularly the Insurance Act 2003 and the Local Content Act. “Such good understanding between all stakeholders can only make NAICOM more effective in its role of protecting the insurance consumer,”he said.
Speaking on improving service delivery of insurance products and services in the Country to consumers, the Commissioner said the Commission has signaled the issue of effective and efficient service delivery to consumers as a key priority with its establishment of Complaint Bureau Unit to deal with complains from members of the public against any insurance operator.
“This unit has recently been upgraded and is headed by a Deputy Director to attend to aggrieved consumers. Many aggrieved consumers have continued to access this desk to register their complains with us. We advise you to take advantage of this desk and report your challenges to us and I assure you that any company found in default shall be compelled to do the needful.
“There is no doubt that our competitive environment and the changes in the world economy as a result of globalisation, deregulation, privatisation, financial meltdown, and the modern advancement in technology give insurers the opportunity to transform their business operations and realigned with customers by understanding consumers‘ needs and ensure an enhanced and efficient delivery of products and services. “We are aware that the satisfaction of consumers of product and services plays a vital role in the sustenance of any business. The difference between great and poor customer service has always been clear, and businesses on the wrong end of this spectrum usually pay a price. This is as true for insurance as it is for any other customer-facing business.
“Today, the consequences of subpar service are amplified by the speed and reach of social media. One poorly handled claim, one mistake captured on a smart phone could escalate quickly into a brand-damaging crisis. This is why we believe it has become imperative that insurance firms increased their focus on providing great customer experience,”he said.- Nation