Recent revelations have highlighted significant ethical issues within Nigeria’s insurance sector, with accusations directed at insurance brokers for exploiting underwriters through demands for gratification. This problem is seen as a major obstacle to the industry’s growth and professional credibility.
Insurance underwriters have reported that brokers are increasingly treating them as sources of financial support for personal events, such as weddings and funerals, rather than focusing on business transactions. Some brokers reportedly demand payments for sponsoring events, and failure to comply often results in underwriters losing business opportunities. Allegations include instances where brokers have submitted outdated burial invitations to seek sponsorship funds.
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Additionally, there are concerns about conflicts of interest, as many insurance company executives also own brokerage firms, complicating the risk assessment process. Reports indicate that brokers sometimes distribute business among multiple insurers to secure multiple commissions and gratification, rather than placing risks based on merit.
The issue extends to the selection process for major contracts, such as the 2024 NNPC insurance programme. The process has been criticized for lacking transparency, with allegations of bribery and favoritism influencing the outcome. Brokers claim the selection of Zebra Insurance Brokers as the lead firm for the NNPC account was questionable, suggesting that deals and inducements may have played a role.
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Industry leaders, including former Nigeria Insurers Association (NIA) Chairman Gus Wiggle, have called for a reevaluation of these practices. Wiggle emphasized the need for self-regulation within the industry, urging companies to adopt fair practices and robust corporate governance to combat unethical behavior.
The Nigerian Council of Registered Insurance Brokers (NCRIB) has also weighed in, with Executive Secretary Mr. Tope Adaramola acknowledging the historical camaraderie in the industry but stressing that unethical practices, if proven, should be addressed transparently. He encouraged companies to report specific cases of misconduct rather than relying on hearsay.
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Overall, the industry faces a challenge in addressing these ethical concerns to foster growth, enhance its reputation, and improve its contribution to Nigeria’s GDP.
