The large number of insurance operators is responsible for the prevalence of unethical practices in the industry, Managing Director of Royal Exchange General Insurance Company, Olutayo Borokini, has said.
Borokini, said that the large number of operators aids unhealthy competition which forces down the rate of insurance products. He noted that since there are no new businesses, operators' scrabbles for the few available ones which often make some underwriters to pervert the industry's rules.
He stated that South Africa with higher insurance penetration compared to Nigeria has fewer underwriters.
He said: "There are supposed to be industry standard, but they are not been followed. Competition has forced down. For now we have too many players for the businesses that are available. Take for an example South Africa, as big as the country is in terms of insurance penetration which is about five per cent, they have about 15 insurance companies.
"In Nigeria we have 59 firms. How do you control such great number of players, because if there are about five underwriters on a particular business, and the five reject the risk, the broker still has an opportunity to take other five in the market and can continue until he exhaust the whole. Mind you the companies have been capitalized up to N3 billion."
He called for collaboration among the operators, adding that the level of unethical practices is inimical to the industry's growth.
With Agency Report