Insurance managers turned politicians in the insurance industry have inflicted severe hardship on policyholders who took insurance policy with some diligent insurance firms operating in the industry.
Industry sources told AssurPen Online that the insurance directors of some underwriting firms diverted insurance funds worth billions of naira in the books of their firms to run for political office in some states in the country which they lost. As a result, some of them to escape justice slick out of the country to escape arrest.
Besides, some of them are heavily indebted to some banks to settle claims due to policyholders to avoid embarrassment to their firms.
However, the Insurance Act specifically frown at insurers diverting insurance funds to promote other businesses. The law states “if the commission in the case of a registered insurer the commission is satisfied that the insurer is carrying on simultaneously with the insurance business any other business which is detrimental to the insurance business of the insurer, the commission can council the licence of the insurer.”
However, industry chieftains, worried by the effect these challenges may impact on the image of the industry believes the National Insurance Commission (NAICOM) as regulator of the industry should take proactive steps to arrest the ugly situation. However, the image maker of the commission in reaction said the Complaint Bureau Unit are handling the challenge.
According to the insurance technocrat, in the interest of the insurance market in the country and looking seriously at reports of financial experts on the industry, the commission should look closely on the operations of insurance firms in Nigeria.
For instance, Poor patronage of insurance business in Nigeria has been blamed on relationship management by some insurance companies.
This relationship is sometimes below par because an average customer simply wants to be comfortable.
PricewaterhouseCoopers, a multinational professional services network of firms stated this in a report titled “Insurance penetration in Nigeria” observed that the Nigerian insurance industry is performing below its risk capacity evident by the low patronage of insurance services in the country.
According to the firm, insurance sector if successful will support development and growth in the economy, encourage savings and investment, aid job creation and growth in capital markets and financial assets.
The insurance stocks on the Nigerian Stock Exchange, NSE, are not performing well as they should, given the apathy of investors who believe that insurance firms are not well managed, thus affecting profitability.
Besides, from the regulatory issues which operators in the industry are grappling with, poor patronage of insurance in Nigeria could be blamed on relationship management by some insurance companies which sometimes is below par because an average customer simply wants to be comfortable.
Such relationship challenges, according to the report, have their basis in weak corporate governance and risk management framework which sometimes make the companies seem unfriendly particularly when there are claims to be made by customers thus creating doubts about how well the insurance companies may be trusted.
“At the heart of this, customers often complain about the lack of flexibility and technology-driven innovation in terms of the kind of insurance policies and packages that meets today’s upwardly mobile audience of contemporary insurance,” the report said.