Insurance companies in Nigeria can now partner with more than one bank, according to the revised bancassurance guidelines released by the National Insurance Commission (NAICOM).
The new guidelines will enable insurers to distribute their products through many banks’ customer base, which is expected to deepen penetration and increase retail insurance sales in Nigeria.
Insurance penetration is less than one percent and places Africa’s most populous nation at about 7th position in the continent topped by South Africa.
According to the Insurers Committee of the industry, the revised guidelines will enable insurance companies to sign bancassurance deals with multiple banks, unlike the initial guidelines that allowed an insurance company to partner with only one bank.
Jide Orimiolade, chairman of sub-publicity committee of the Insurers Committee, said the revised guidelines would enable insurance companies to partner with many banks rather than dealing with only one bank at a time.
Orimolade, managing director of Stanbic IBTC Life Insurance, said the new guidelines were laudable and would ensure fair play by operators in the insurance market.
Rasaq Salami, deputy director, corporate communications and market development at NAICOM, said the idea of the revised guidelines is to create a level playing field for all operators, and to do away with captive arrangement.
He added that this would disable exclusivity, which is also in line with the Central Bank of Nigeria’s (NAICOM) regulation that prescribes that a commercial bank cannot propose the product of only the insurance company they are partnering with to a consumer.
The nation’s insurance industry has made reasonable headway in implementing the referral model of the bancassurance model approved since 2017 between the NAICOM and the CBN.
Pius Agboola, director of authorisation and policy, NAICOM, had, during the maiden bancassurance certification workshop for insurance employees at the College of Insurance and Financial Management in Ogun State, said: “NAICOM shall approve the referral bancassurance agreement between the bank and insurance company, subject to obtaining references from the Central Bank of Nigeria.”
According to Agboola, bancassurance is a model by which insurance products are distributed through experts who are generally employees or representatives of an insurance company.