Insurance firms are leveraging on coverage provided by telecommunication outfits to sell products to a vast portion of the uninsured in Nigeria, to deepen insurance penetration in line with the directive of the National Insurance Commission (NAICOM).
Mansard Insurance partners with MTN Nigeria to sell a life product. FBN Insurance, a member of FBN Holdings collaborated with Etisalat to launch “Sure4Life”, an insurance product accessible via mobile telephone.
FBN Insurance had earlier floated a product with Airtel, known as ‘Padi4Life’.
Other insurance firms are at various stages of perfecting the launch of new products with telecommunication networks.
However, industry watchers say the insurance industry may regret this trend, going by antecedents.
NAICOM has to vet and approve a product before it can be launched in the public domain, but this process being bypassed in these new arrangements.
STACO Insurance Managing Director, Sakiru Oyefeso, said insurance companies having to sell life assurance through telecommunication networks poses a threat to insurance practice.
He urged caution, wondering if the telecommunication companies are registered by NAICOM to sell insurance products.
His words: “Information and communication technology (ICT) has become a viable channel for selling insurance policies through the use of the internet, social media and SMS.
“The question is, are the telecom networks licensed by NAICOM to sell insurance? This is thought-provoking and we should remind ourselves of how workmen compensation was gradually taken away from us.”
“This relationship between some underwriters and the telecommunication industry is dangerous. Are the telecommunication companies now brokers? This question is asked because life assurance products are now sold through them.”
Oyefeso urged insurance marketers to evolve strategies, structures and capabilities to align their selling processes with the latest technology so as not to lose income.
However, other operators believe technology provides more Nigerians access to life insurance cover.
Etisalat Nigeria Business Segment Director, Lucas Dada, said “these are innovative insurance products which take away all the challenges that may be associated with taking an insurance policy and allow our subscribers to access and maintain insurance coverage with ease.
“It is in line with our reputation as the most innovative telecommunication company to provide such life changing products to our customers.”
Dada maintained that the plan is optional and open to all registered Etisalat subscribers aged between 18 and 80 years.
FBN Insurance Managing Director and Chief Executive Officer, Val Ojumah, said the initiative will help correct the wrong perception that insurance is only for the rich and help reduce complexities and paperwork.
“The initiative also supports our aspiration to bring the benefits of insurance to Nigerians who otherwise would have remained uninsured,” he added.
“We are proud of our increasing contribution to the growth and development of the insurance industry in Nigeria and assure all stakeholders of our continuous efforts to bring the latest innovations in the business to the benefit of the Nigerian populace.
“We believe in the strength and sustainability of telecommunication approach to the insurance business and our ambitions are focused on working together to further enhance growth and improvement over the coming years.”
The poor contribution of the insurance industry to Nigeria’s gross domestic product (GDP) is partly because the government took away major products, such as workmen compensation and pension, and placed them in the management of other sectors.