Insurance brokers targets improved compliance, cost optimisation on operations
An effort to ensure that insurance brokers achieve improved regulatory compliance, reduce cost of operation through shared infrastructure services are occupying the attention of the governing council of the Nigerian Council of Registered Insurance Brokers(NCRIB).
This is targeted at assisting members who do not have the capacity to acquire personal modern technology infrastructure to run their operations, particularly filling of returns to benefit from the group arrangement.
Before now, many of the insurance brokers have been fined consistently by the National Insurance Commission (NAICOM) for late and improper filling of returns, particularly since the transition to the International Financial Reporting Standard (IFRS).
There are currently over 500 insurance brokers operating in the market, from small sized portfolio offices to well equipped offices.
This segment of the market control in excess of 70 percent of the total industry gross written premium with a lot of concentration on public sector businesses.
However, analysts are of the opinion that the market potential for deep penetration lies in development of the retail sector, which unfortunately has not gained the attention of the brokers.
What the market is going to become in the future and fate of small holder companies that may not have the resources to compete, is still not very clear to anybody as foreign insurance brokers and reinsurance brokers have continue to show interest, even in this segment of the market.
Recently, Business Day exclusively reported the growing competition for business and leadership struggle in the insurance broking industry, as top global brokers and reinsurance-brokers take position in the local market with acquisition of indigenous companies. Latest entrants in this segment of the business are Willis Towers Watson, which recently concluded the acquisition of Gras Savoye, a leading French insurance broker, which also operates as a registered insurance broker in Nigeria. With the acquisition, Willis is fully in Nigeria gunning for big deals.
At the same time, Mrash, a long time partner of Insurance Brokers of Nigeria (IBN) also acquired a big stake in Femi Johnson and Co, a leading brokerage firm in the Nigerian market. This is following the successful acquisition of Alexander Forbes’ South African insurance broking operations, Alexander Forbes Risk Services and related ancillary operations, as well as Alexander Forbes’ insurance broking operations by Marsh in South Africa.
Analysts who reacted to the development weekend said it’s a healthy development for the Nigerian insurance industry and particularly the brokerage as it underscores the huge potential that has become attractive to global insurers across the world.
Kayode Okunoren, president, NCRIB said the governing board has approved the proposal for a shared service agreement where software will be designed to assist members to comply with NAICOM requirements and avoid penalties.
Okunoren, whose tenure will be ending soon, said in Lagos, that one of the focuses of the governing board is to continually give value to members and enhance their compliance with regulatory requirements expected of them.
“I am most delighted that the Board has just approved the proposal for a shared service agreement where software is designed to assist members to comply with NAICOM requirements and avoids penalties. Circulars explaining the full details of this initiative will be circularized to members,” he said.
He said preparation towards the 2017 National Insurance Brokers Conference & Exhibition and Annual General Meeting (AGM) of the Council is on course, that the Secretariat and the Events Organizing Committee are now putting modalities in place to ensure a very successful outing.
Modestus Anaesoronye