Brokers and the control of postcontractual opportunism in the Nigerian insurance market
Abstract
Purpose
The purpose of this paper is to examine how insurance brokers control opportunism at the postcontractual stage of insurance contract in the Nigerian insurance market. Such opportunism, widely reported of insurance commercial customers, threatens the survival of the entire insurance institution while brokers' role is grossly ignored.
Design/methodology/approach
The paper involved the use of semi‐structured interviews of insurance broking executives and documentary analyses of how insurance brokers gather and pass on information between clients and insurers to control opportunism in the insurance market.
Findings
Findings suggest that the involvement of the insurance brokers from the claim notification stage, claim auditing to actual settlement and dispute mediation are instances of control over customers' opportunistic tendencies. Also, it is found that fear of reputation damage and brokers' professional way of handling clients' over‐exaggeration and suspicious claiming might considerably control insurance opportunism.
Practical implications
Involving insurance brokers in the claim settlement stage is capable of reducing insurers' claim auditing costs while guaranteeing hassle‐free claiming experience for customers and boosting the image of the insurance industry. Hence, findings are relevant for insurance companies and regulators desirous of controlling opportunism in the insurance market.
Originality/value
The paper extends the marketing role of brokers to the claim settlement stage by highlighting their potentials to control clients' opportunistic behaviours which threaten the insurance market.
Keywords
Citation
Olalekan Yusuf, T. (2010), "Brokers and the control of postcontractual opportunism in the Nigerian insurance market", Journal of Financial Crime, Vol. 17 No. 2, pp. 223-239. https://doi.org/10.1108/13590791011033917
Publisher
:Emerald Group Publishing Limited
Copyright © 2010, Emerald Group Publishing Limited