By ROSEMARY ONUOHA
Contrary to expectations that insurers in Nigeria are beginning to embrace friendly competition and is shunning the cut-throat rivalry that has beguiled the sector for too long, majority of the insurance companies have refused to embrace the common data base of the Nigerian Insurers Association, NIA.
These companies are not ready to submit information on their business for use by the database because they are afraid of losing their businesses to other competitors.
Consequently, there are fears that the proposed Nigerian Insurance Industry Database (NIID) solution being put in place by NIA for the nation’s insurance industry looks set to fail and may never become a reality as the required data to make it work has not been forthcoming.
The centralised database intended to be a repository of all the insurance industry data, was scheduled to go live during the third quarter of year 2011, but this was not to be as the project has hit a brick wall.
Although the Chairman, Information Technology Committee of NIA, Olawale Adedokun, in the committee’s report to members of the association in June 2011 had informed that the system was currently undergoing pilot test run, the NIA appeared to be handicapped as the operators were not cooperating with the association.
The operators argued that since the NIA failed to make the market agreement of ratings work, the ability of the self regulatory body to successfully coordinate the database project is in doubt.
Considering the cut-throat competition in the industry which has made the operators to indulge in the unethical practical of rate cutting, the operators expressed fears that disclosing information on their business to other insurers would amount to giving them opportunity to hijack their businesses.
The insurance industry had in the last quarter of 2010 set out to develop and implement a centralised database system, which will be repository of all insurance policies underwritten insurance companies.
While the NIA had at the beginning of 2011, said the association would be focusing on setting up the consolidated data base during the year and that this would be operational before June 2011, almost seven months after, the association has got nothing to show for its promises.
Courteville Investment, listed in the Commercial/Services Sector of the Nigerian Stock Exchange (NSE) is partnering the NIA to provide the database solution.
Courteville’s Executive Director, Strategy and Projects, Femi Niyi, said “Courteville Investment Plc has been contracted as an Information Technology (IT) solutions provider to design, develop and manage a centralised database solution for NIA.”
Apart from serving as authentic repository of the nation’s insurance industry data, the system is also intended to support the production of Insurance Certificates (initially for Motor and Marine) that are verifiable and traceable at the point of issuance and also at any point during its life cycle to the centralised database.
Another aim of the centralised database is to provide mechanisms for the verification of Insurance Certificates issued or presented as evidence of insurance for Motor and Marine at the first instance and then other classes of insurance.
Besides, it is expected that the solution will help in providing qualitative analysis of industry performance and serve as source of historical data for benchmarking, while also enabling the financial information of NIA members to be rendered electronically for ease of analysis.
By the time the centralised Insurance Database Solution becomes fully operational, it is expected that it will help in eradicating fake insurances, minimise multiple fraudulent claims and most importantly provide authentic, qualitative and comprehensive data on insurance for national policy formulation.
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Insurers shun NIID