Building capacity for the retail insurance market

The retail insurance market, a strategy to increase market penetration in the nation’s insurance industry would go a long way, if there is adequate knowledge about its operation amongst operating companies.

This knowledge challenge facing its full adoption and implementation, expert say must be addressed to achieve the set target for market penetration and deepening across the country.

Insurance penetration in Nigeria as against the population of 160 million is put at less one percent than , meaning there is large mass of uninsured populace that must be captured by taking insurance services to the nook and crannies of the country, particularly the grassroots.

Yemi Soladoye, managing director, Risk-Guard Africa Limited said this is where the National Insurance Commission and the Chartered Insurance Institute of Nigeria (CIIN) have to come together to provide workable platforms that would encourage acquisition of knowledge for operators and individual agents seeking to play in the retail market.

He said both organization must as much as possible create avenues where operators can be exposed to the secrets about management of retail operations.

“There must be effort to lower the barrier to agency operations, by making training costs as low as N1, 500.00 per person rather than N40, 000 or more that have to be spent to train an agent”

According to him, with this huge reduction companies would not find it much difficult to train agents than when they have to pay as much as N40, 000.00 as cost of training for an agent. And how much of the risk can you take, Soladoye queried.

On the perception of operators to the issue of retail, Soladoye stated “

“I think they are so comfortable with the wholesale market because they could go to brokers and get N10million; N50million, while the business of the office of head of the service can give an underwriter a billion naira.”

He noted that the retail market takes some time to mature and requires a lot of expertise in that segment as well as huge infrastructural provision.

“I think the operators business concept was not looking at the retail market because it was possible for an insurance company with four branch offices in the wholesale market to make N10billion premium, whereas for retail market, the bread and butters has to be there and you must be everywhere.”

With the coming of MDR, I think we have seen some measure of improvement especially in the area of agency operation as the number of insurance agent registered with NAICOM grew from 1,596 to about 3400 a year after. He however expressed optimism that, a lot was going on within the different companies now, and are already making concerted efforts to establish their retails.