By Rosemary Onuoha
THE insurance industry may not be able to realize the N1 trillion premium income target for the Market Development and Restructuring Initiative, MDRI, because over 90 per cent of the industry’s income has been given out as discounts by operators.
Chairman of Mutual Benefits Assurance Plc, Dr. Akin Ogunbiyi, who stated this at a forum in Lagos, noted that the unhealthy competition in the industry has robbed the sector of great fortunes, stressing that about 90 per cent of the industry’s supposed revenue are lost to unnecessary discounts and other unfair pricing.
“There was a business we were underwriting for N1.4 billion in Mutual Benefits, at the last renewal, somebody took that same business for N250 million.
“The insurance industry is contributing virtually nothing to the GDP even as the practice of insurance as it is today is still very raw, conservative, and against every known proven business practice in the world. It is not premised on professionalism or ethical practice and competitiveness is purely on pricing. We are giving away over 90 per cent of the actual income we are supposed to earn.
“The insurance industry is plagued with ineffective self regulation coupled with statutory regulatory challenges. We know the people who are behind where the industry is today, yet the regulator has not deemed it fit to sanction them.
“Most decisions will fail when the parameters are not right, but decisions that are taken on sound business ethics and there is commitment to following through, will succeed. If there is going g to be any paradigm shift, the revolution has to start from the regulator.”