Insurance malpractices deprive government of long term savings — Standard Alliance CEO
By Rosemary Onuoha
GOVERNMENT will continue to be deprived of long term fund for infrastructure development, if the rate of malpractices involved in selling compulsory insurance policies is not checked, Managing Director of Standard Alliance Plc, Mr. Bode Akinboye, has said.
According to Akinboye, “in the quest to get business at all cost, insurance operators engage in all forms of business malpractices. Compulsory insurance was instituted to encourage long term savings and any economy that is not encouraging long term savings will never survive. Such economies will find it difficult to mobilise long term fund needed to deliver first class infrastructure.
“There is a reason why government decides to make some policies compulsory. It is not just because they want people to buy the insurance; it is to encourage long term savings.”
Akinboye said that deliberate steps should be taken to create liquidity which can be leveraged on to create funding for infrastructure development, asserting that compulsory insurance is one of those elements.
He stated: “If as practitioners, we are selling insurance at one or two per cent of regulated price, then the problem will continue to persist in the industry. Government also instituted compulsory insurance to preserve national assets as well as personal assets because they are meant to be protected. It is also for protection of liability because people can cause damage to one another; hence, there should be a mechanism to restore people back to where they were before losses occur. Everybody needs good road, hospitals, good educational system, and all these are not going to happen by chance.
“Accordingly, the regulator should instill discipline in the market. Compulsory insurance should be sold at the price instituted by government and it should be strictly monitored. If we do that, we will generate quite a lot of revenue in investment fund for the industry and the economy generally. For instance, if government did not specify the percentage of contribution to be put aside for the contributory pension scheme, and pension fund operators have to go and be negotiating for what percentage to charge, they won’t have the kind of asset under management that they have. Let’s do the same thing for insurance.”
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