‘Professionalism and Integrity are bedfellows’ - Author

The Directive of the National Insurance Commission (NIC)

That the National Insurance Commission (NIC) in January 2019 issued a directive to all insurance companies to ensure that all their Sales Agents pursue an Agency Certificate Course in Insurance came to me as news worth being excited about. This is because, it is going to be, among others, help minimize the risk of mis-selling by Agents and also engender trust among members of the insuring public.

This could not have come at a better time especially as the industry is positioning itself to significantly increase its penetration rate.

The Ghana Insurance College

As a quick follow-up to that directive, the Ghana Insurance College (GIC) which was established by the four cardinal pillars of the industry i.e. the NIC, the Chartered Insurance Institute of Ghana (CIIG), the Ghana Insurers Association (GIA) and the Ghana Insurance Brokers Association (GIBA) took the directive a step further by coming up with a programme to have all Agents across the country trained and certified. It is worthy to note that the NIC would bear the tuition of this all-important capacity building programme for the insurance industry’s Sales Agents.

Objective of the Programme

The objective of the training programme is to enable Agents gain professional skills as well as develop the necessary knowledge in insurance operations and equip them with the basic regulatory requirement expected of Agents which I believe would help many Agents appreciate matters regarding regulation and how to comply within the regulatory framework.

Good Quality Agents

One of the key challenges of the insurance industry is the difficulty in having the right caliber of Sales Agents to represent various insurance companies as a true reflection of what those insurance companies stand for!

For some time now, however, the unconventional practices of some insurance Agents have deepened the already unpleasant perception about insurance by a section of the insuring public, further mitigating against the insurance penetration rate in Ghana, which is currently under 2%.

Many times, it is the Sales Agent who often introduces an insurance policy or more to a prospective client and the client often accepts everything said to him or her by the Agent as being what the insurance company actually has on offer.

The GIC on the heels of IACG’s Contribution

It would be recalled that the Insurance Awareness Coordinating Group (IACG) comprising  Representatives of the NIC, GIA, CIIG and GIBA with funding support from the Programme for Sustainable Economic Development (PSED) of the German Development Corporation GIZ)  held an earlier capacity building programme in some parts of the country in December 2017 with ETHICS ‘preached’ as their guiding principle!

With the GIC’s training, it would only go a long way to add flesh and give a deeper understanding of the Agent’s contribution to the growth of the sector for the benefit for all and sundry.

Agents as Distribution Channels of Insurance Products

Indeed, most insurance companies, especially, life insurance rely heavily on their trained and licensed Agents in the distribution of their products. Though pundits have raised issues about Agents not being properly trained; hence ‘the way they do their things’, I reckon most Agents are given proper training and retraining by their respective companies, but are just comfortable doing their own things on the field when confronted with various challenges. From mis-selling to outright mis-representation of their companies, some Agents cannot escape being caught in the web. Some often fail to explain the details of policies to clients and sometimes suggest things that the policies can do which may not be true.

Insurance Agents can be found virtually everywhere particularly where there are working people and serve as Ambassadors of their principals - the insurance companies. Their mission is to assist people on how to plan and protect their lives and assets financially. 

They are an integral arm of Insurance intermediaries who, not only facilitate the placement and purchase of insurance, but also act as links between insurance companies and their clients.

Regulation of Insurance Agents

The insurance company-agent relationship can take a number of different contractual forms. In some jurisdictions, Agents are typically independent and work with more than one insurance company.

In Ghana the practice is that, Agents operate exclusively by representing a single insurance company selling specific lines of business. Meanwhile, some general insurance Agents are also permitted to sell for life insurance companies, provided they are licensed by the NIC for both companies. Typically, Agents may operate either as independent, exclusive, insurance company-employed or self-employed.

Increasing Client Sophistication

Given the increasing client sophistication, Agents provide their clients with the necessary information required to make informed decisions. By their training, Agents help their clients to establish their needs in order that they can make informed choices in terms of products and premiums. This, therefore, enables insurance companies to offer desirable policies; served mainly through their Agents and at competitive premiums. 

This reinforces the need for insurance companies to continue to enhance the capacity of their Agency force in order to remain competitive and contribute to national development. That is the more reason it is welcome news that the GIC has started the process of engaging Agents in a more professional manner.

Lack of Professional Training and Its Effects

Some miscreant Agents, poised to go into the sales battle, and believing that ‘being asked to go to battle requires individual strategy to either come back alive or otherwise,’ employ unethical practices such as deliberate misinformation, in their engagements with the public. Unfortunately, these unacceptable practices not only affect the Agent in terms of commission loss, but most importantly, deny the client access to quality service delivery. Additionally, the company’s revenue for investment is lost and the industry is denied the positive public perception required to increase insurance penetration.

It is important to note that inasmuch as people would want to have insurance protection, they would not want to be misled into doing it. Besides, there may be other competing interests all requiring appropriate evaluation before a choice is made hence the need for such professional touch by Ghana’s foremost insurance training College.

As insurance companies pay particular attention to the continued skills development of their Agents, usually in the form of periodic in-house refreshers, the regulator’s deep involvement to provide a standard industry-wide training through the GIC is a step in the right direction and must be taken advantage of.

The Way Forward

As the GIC sets the ball rolling as regards the implementation of the NIC directive to insurance companies, it is important that these companies would encourage their Sales Agents to take advantage of the programme in order to be equipped for a more effective delivery in the discharge of their duties as Sales Agents with professional ethics and standards of practice guiding them.

Until next week, “This is Insurance from the eyes of my mind.”