It appears the insurance industry is making sales on one hand and losing it on the other hand. Omobola Tolu-Kusimo writes on the lingering crisis.
The inability of the National Insurance Commission (NAICOM) to resolve insurance agents’licence renewal issue is causing a decline in the penetration drive.
At present, no fewer than 9,000 registered insurance agents are struggling to renew their licences to enable them operate in the market as mandated by NAICOM. They are unable to renew their licence because they cannot upload their documents on the NAICOM portal.
Insurance agents are critical to sales at the grassroots, a market yet to be fully captured by the industry. Consequently, insurance penetration rate remain abysmally low standing at 0.3 per cent for almost a decade.
The Minister of Finance, Budget and Planning, Zainab Ahmed, had urged insurance operators to address the low contribution of the sector to the country’s Gross Domestic Product (GDP).
Inaugurating the NAICOM’s portal in Abuja, Ahmed noted that the sector, which had huge potential, contributed just 0.88 per cent to the country’s GDP in 2021.
She said the current insurance penetration, a measure of the contribution of insurance to the Gross Domestic Product of 0.88 per cent for 2021, is very low, indicating low insurance sector development contribution to the national economy.
Unfortunately, the agents whom are crucial to the deepening of penetration are losing interest in the insurance business daily due to the regulator inability to resolve the lingering problem of license renewal.
It was also learnt that the umbrella body of agents, the Association of Registered Insurance Agents of Nigeria (ARIAN) had communicated to NAICOM through a letter about eight months ago but did not get a response till date.
The struggle to renew license, it was learnt, arose from their inability to scale the submission process hurdle after submitting the necessary documents for license renewal through the NAICOM portal.
Without the renewal, the agents cannot get a certificate from the commission and, therefore, cannot transact business. When they do, they will not be paid their commission by insurance firms as the certificate is needed before payment can be made.
ARIAN President, Odewunmi Kazeem, during a meeting at its Secretariat in Fadeyi, Lagos, told reporters that of the 10,000 registered insurance agents in the country, only about 1,000 are able to renew their licences through the insurance industry regulator’s portal as mandated.
The President, who was represented by his deputy, Jegede Olatunji, noted that the regulator had stopped manual submission for licence renewal last year, hence, directing every agent to use its portal for submission of documents for licence renewal.
This, he said, they did, fulfilling requirements, but that the submission couldn’t still go through, adding that complaints had been made to NAICOM but they are still awaiting response.
This development, he further said, has negatively affected their businesses as insurance firms were not paying commission on businesses generated by the affected agents for fear of being sanctioned by NAICOM.
To this end, he noted that some of the agents who couldn’t cope with this challenge had left the industry for other sectors such as real estate for business survival, at a time the industry is struggling to increase insurance penetration.
While pleading with NAICOM to arrest this issue before it snowballs into a bigger issue that may sweep off more agents who were driving, especially, retail insurance, from the market, he pointed out that, their existence is at stake if the situation persists.
He said: “I believe the Commissioner for Insurance, Mr. Sunday Thomas, has a listening ear and has been the driver of increasing insurance penetration in the country. So, every avenue to increase this penetration should be empowered to carry out their civic duty that will aid this ambition.
“Registered agents are going through tough times as there is currently no much difference between registered and fake insurance agents. The inability to renew our licences has made some of us to lose businesses that we were facilitating before. The earlier the regulator could intervene, the better for us,” he pointed out.
The National Adviser of ARIAN, Mr. Chinomso Eze said the body had written NAICOM about eight and was awaiting response.
adding that, ARIAN president had personally also reached out to the regulator on the issue.
The National Treasurer, ARIAN, Jeremiah Okpako, disclosed that, the body would be ready for any intervention prescribed by the regulator as long as it will resolve the ongoing challenge.
The Commissioner had earlier said the commission is looking at how to solve the issues around the agents not being able to upload on their portal.
He however noted that in the interim and because of their income that may be locked up, the commission will move very fast to ensure they get their income.
Efforts to get an update from NAICOM spokesperson, Rasaaq Salami on what the commission is doing to resolve the problem proved abortive as he declined to respond as at press time.