NAICOM sees growing consumer risks in Web aggregator platforms, move to license operators
To ensure that insurance consumers are not unduly exposed to risks of fraud by unscrupulous elements that operate in the online space, the National Insurance Commission (NAICOM) has stepped out to check activities of web aggregators.
NAICOM believes that it is its responsibility to protect the insurance consumers by ensuring that all avenues and platforms for accessing insurance products are genuine and adequately regulated.
The Commission stated that though it is part of its development programme to increase insurance penetration through different channels, it will not allow platforms that were not licensed by NAICOM.
Insurance Aggregator has been described as a website portal or search utility to enable a client to gain several quotes via an electronic e-quote form.
Mohamed Kari, commissioner for Insurance/ CEO of NAICOM said the Commission is not comfortable with some activities of online aggregators whose activities have cost some pains to consumers.
“We have received reports some people that paid premium to some online platforms and such monies never go the insurance company”
Kari said anybody that wants to be an insurance aggregator must be licensed by us, so that we can also know what they are doing.
He said the Commission has released draft guidelines for insurance aggregators to the stakeholders for their inputs.
By the time this is concluded, we would have succeeded in expanding the distribution channels and we would have also succeeded in ensuring protection for consumers who may use such platforms, Kari said.
NAICOM recently released guidelines on distributional channels and these include the Web Aggregators Operational guidelines; State Government’s Implementation of Compulsory Insurance (or State Financial Advisers) guidelines; Independent Agents Operational guidelines; and the Mutual Organisations, Associations, Community Based, Micro guidelines.
Kari, said that NAICOM decided to expose the draft guidelines to address the issue of low insurance penetration in the market.
“In this regard, we have considered and agreed to create additional distribution channels in the market to include using the services of state governments to enforce compulsory insurance at the state level. We have further decided to explore and de-mystify the partnership type of operation for brokers and I can assure you it will open a new vista in insurance mediation in Nigeria and most importantly, it will clearly separate the professionals from the businessmen.”
The Insurance Aggregator concludes agreements with a number of Insurers to provide a comparative quote based on pre-determined list of specified needs as disclosed by potential clients.
The Insurance Aggregator provides the potential client with comparative insurance quotes and the opportunity to discuss a specific quote, will transmit the details of the potential client to the insurer and the insurer will contact the potential client to conclude the policy of insurance.
But what is in it for the Insurance Aggregator? The Insurance Aggregator develops the “quotation portal/ search utility”, markets this medium and agrees with the participating insurers to be paid a referral fee for policy contacts concluded based on the client information provided to the insurers by the aggregator.
Internationally there has been a significant increase in the amount of insurance contracts concluded via the internet. The aggregators are developed with this in mind and are marketed as an “ultimate online one-stop insurance shop, giving consumers instant and easy access to a range of insurance solutions, tailored specifically to their insurance profile.”
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