Re: NAICOM plan to cost 1,600 insurance jobs

Any follower of insurance growth and trends in Nigeria would read with great dismay story published in the Leadership Newspapers of Saturday January 14 edition under the headline: “NAICOM Plan to cost 1,600 insurance jobs”. Definitely, it makes little news that the Nigeria Insurance industry which should be a great catalyst to growing our national […]

Any follower of insurance growth and trends in Nigeria would read with great dismay story published in the Leadership Newspapers of Saturday January 14 edition under the headline: “NAICOM Plan to cost 1,600 insurance jobs”.

Definitely, it makes little news that the Nigeria Insurance industry which should be a great catalyst to growing our national economy as obtained in other progressive countries has a diminutive contribution, precisely less than 10 per cent to the nation’s GDP. Suffice it to state that insurance should provide the pool of investible funds which could be harnessed for long term development projects, as well as provide the necessary peace of mind for productive endeavours by the citizens.

But in spite of all these benefits, the industry is yet to get out of the woods for legion of reasons, part of which most recently is the indiscretion of government through the National Insurance Commission (NAICOM), which is the government regulatory institution in growing the industry.  Part of this is the reported step by NAICOM through its conception of new channels of distribution, part of which would be the engagement of Stock Brokers as Insurance Agents. 

Whilst initiatives to grow the industry are applaudable at this crucial time, such should be well conceived to achieve desired result. With the engagement of Stock Brokers to market insurance, the industry as reported would lose no fewer than 1,600 jobs employed by Insurance Brokers and Agents, who are the recognized intermediaries in the insurance value chain. Industry operators are wondering if the new arrangement would help the industry’s image against the backdrop of past activities of untrained insurance operators who were engaged in marketing insurance across the country. The fact is that Insurance is a technical trade and definitely requires trained and concentrated mind to trade in it for the maximum benefit of the insured. The idea if commenced is also another tactical error of ceding another part of the insurance industry to non-professionals, with its damaging consequences.

As against this misstep by NAICOM, the Commission should rather find a better way to empower Insurance Agents and Brokers through incentives and waivers, especially for those going into new markets. Also, the Commission should embark on revival and dogged pursuit of the now dormant Market Development and Restructuring Initiatives (MDRI), which focuses, among others things on Compulsory Insurances- with its huge potentials- rather than shrinking the market. 

Considering the present economic doldrums coupled with the fragile state of the Nigerian insurance industry, it is inconceivable that any institution of government would initiate or pursue any course that could lead to avoidable job cut, culminating in increased social problems. Appropriate authorities need to call NAICOM to order on this gaffe. 

Hassan Jairu is a Business Consultant based in Abuja