Distribution channels will deepen insurance penetration-NAICOM

Distribution channels will deepen insurance penetration-NAICOM

The National Insurance Commission (NAICOM) on Thursday, said that the introduction of distribution channels would help in deepening insurance penetration in the country.

Rasaaq Salami, Head Corporate Affairs of NAICOM, said this in an interview with the News Agency of Nigeria (NAN) on Thursday in Abuja.

Salami said that the channels were measures by the commission to enhance penetration that would cut across all strata of the economy.

“We know the distribution channels of insurance,they are the brokers, agents and the insurance companies.

“But we tried to look for ways of enhancing penetration through distribution that will cut across all strata of the economy

“We feel that if we have other segments or sectors of the economy, having to play a role in insurance distribution, enhance insurance penetration in the country,’’ he said.

According to Salami, the channels are not meant to sell insurance products to act like referral agents of insurance products.

He further said the channels would work in partnership with the various insurance companies and operators, with the approval of the commission.

“For instance, as a stock broker, you have your already existing clients and its possible that some of these your clients are not doing insurance of their assets and their property.

“A lawyer who has a law firm with clients all over the country you could collaborate with an insurance company based on this expansion.

‘’You could also refer those clients to the insurance companies to do insurance with. Your duty is to refer your clients; you are not selling insurance to them.

“This is because these distribution channels do not have the technical knowledge of insurance, so they cannot sell insurance but can refer their clients to the insurance companies to buy insurance.

“This collaboration is done based on agreement between the parties and NAICOM will register that channel as a referral agent to the insurance company.

According to Salami, insinuations on the ills of the distribution channels are mainly as a result of ignorance of the essence of the initiative.

According to him, by the time those who are pessimistic about the distribution channels see the guidelines, they will understand that the move is not to take people out of business, but enhance it.

Some Nigerians are of the opinion that the introduction of the distribution channels will “chase some insurance operators out of insurance business”.

Salami said the commission was also working at enforcing compulsory insurance in states as parts of other measures by NAICOM to deepen insurance penetration in the country.

“What we are doing is that, we have been trying to enter into collaboration with state governments.

“This is what informed our visit to the Ogun and Gombe Governments, to see how we can collaborate and partner with them on the issue of distribution channels.

“This is because they have the machinery and the tools to enforce the law and when they enforce it, it is also an avenue for them to earn revenue as well.

“These are what we are trying to work out and we believe that if we succeed, there will be increase in insurance penetration in the country

“We are using Ogun and Gombe as the two pilot states.

Related Posts

Leave a Reply