The Chairman of Heir Holding and Tony Elumelu Foundation, Tony Elumelu, has proposed N50 million as capital base for insurance broking firms operating in Nigeria.
Elumelu said this on Thursday at the 60th Anniversary Colloquium of the Nigerian Council of Registered Insurance Brokers.
The event had as theme: “60 Years of Insurance Broking: Redefining the Practice and Practitioners.”
Elumelu said it had become necessary to recapitalise the insurance brokerage industry in the country as N5 million was not enough capital base.
He said: “I recommend a minimum of N50 million as capital base; we need to adequately capitalise the brokerage sector.
“The insurance is very important to the economy, so also is the quality of governance, institutions, and practitioners of the sector.
“Insurance is recognised as a technical business that requires special expertise.
“This, therefore, makes it difficult for most people to make the right choice on insurance purchase and also requires professional assistance when claims occur.”
According to him, members of NCRIB have over the years facilitated insurance businesses in hundreds of billions of naira, delighted millions of Nigerians with their professional insurance services and ensured that claims are duly settled.
Elumelu noted that expertise of an insurance broker was crucial as intermediaries between the insurance consumer and an insurance company.
He charged NCRIB’s leadership to enforce strict adherence to corporate governance by all its members and weed out non-registered and non-compliant members from its fold to maintain its integrity.
He emphasised that in redefining the practice and practitioners in the insurance broking profession, NCRIB should lead the war against unethical practices that had been the bane of the industry for years.
Elumelu listed some of the unethical practices to include premium rate cutting, delayed premium remittance, unremitted premium, overloading of premium, returned premium, fake documents and fraudulent claims.
He also mentioned collusion to defraud, mis-selling, unhealthy competition, misrepresentations, manipulation of policy conditions, self-enrichment methods disguised as marketing expenses, among others.
According to him, while the National Insurance Commission continues to play its role as the industry regulator, NCRIB as a body must ensure that appropriate sanctions are imposed on any of its members guilty of unethical practices.
He said: “NCRIB and other insurance industry bodies should collaborate more to deepen insurance penetration in Nigeria while the council also plays a key role in advocacy for pro-insurance laws and policies.”
Elumelu urged insurance stakeholders to generate more awareness and showcase the value of insurance to the public, promoting participation, especially in the retail space.
According to him, insurers must bridge the knowledge gap if they are to make insurance attractive to Nigerians.
He noted that insurance brokers needed to participate fully in the awareness drive to benefit from the initiative like other players in the industry.
Elumelu stressed that the insurance brokers’ community and by extension the entire Nigerian insurance industry, must embrace technology fully to remain relevant in the modern business arena.
He said: “The body also needs to work towards positioning its members properly for digital integration, mediating between the insuring public and the underwriters digitally.
“The brokers’ industry cannot advance when the other financial services are transitioning to online real time, and we are still stuck with a system that relies on hard copy files and documents.
“The brokerage sector needs to drive clean data for the industry and this is not a one person job.”
Elumelu congratulated NCRIB on its 60th anniversary and for organising the most befitting event to mark the milestone.
In his welcome address, NCRIB’s President, Rotimi Edu, said brokers who constituted the professional arm of the insurance industry had a great role to play in causing the desired change in the industry.
Edu said: “Aside from constituting a preponderant chunk of the industry’s manpower professionally, insurance brokers are the closest to the insuring public whose activities could not be undermined in the value chain.
“This position of the broker confers on him the responsibility to always get the best for his client and be continually creative in terms of products development.”
According to him, the council will continue to braze up to the challenges being faced by its members for the collective good of the industry.
Edu said: “Aside from seeing to it that our membership remains cohesive, informed and dynamic, we have put in place strategies to edge out charlatans from our midst.
“Our aspiration is to make our council a ‘League of Reputable Insurance Brokers’ that would offer valued services to insurance clients in the country.
“For instance, with the professional practicing seal now introduced, all members of the council would be able to distinguish their practice and by so doing earn the required respect and dignity.”