Poor patronage of insurance business in Nigeria has been blamed on relationship management by some insurance companies.
This relationship is sometimes below par because an average customer simply wants to be comfortable.
PricewaterhouseCoopers, a multinational professional services network of firms stated this in a report titled “Insurance penetration in Nigeria” observed that the Nigerian insurance industry is performing below its risk capacity evident by the low patronage of insurance services in the country.
According to the firm, insurance sector if successful will support development and growth in the economy, encourage savings and investment, aid job creation and growth in capital markets and financial assets.
The insurance stocks on the Nigerian Stock Exchange, NSE, are not performing well as they should, given the apathy of investors who believe that insurance firms are not well managed, thus affecting profitability.
Besides, from the regulatory issues which operators in the industry are grappling with, poor patronage of insurance in Nigeria could be blamed on relationship management by some insurance companies which sometimes is below par because an average customer simply wants to be comfortable.
Such relationship challenges, according to the report, have their basis in weak corporate governance and risk management framework which sometimes make the companies seem unfriendly particularly when there are claims to be made by customers thus creating doubts about how well the insurance companies may be trusted.
“At the heart of this, customers often complain about the lack of flexibility and technology-driven innovation in terms of the kind of insurance policies and packages that meets today’s upwardly mobile audience of contemporary insurance,” the report said.
According to Coopers, the implications of these challenges on the industry are rife. For instance, in 2018, the Enhancing Financial Innovation & Access, EFInA report stated that of the 99.6 million adult population in Nigeria, only 1.6 per cent have insurance covers even though nearly 40 per cent of them have access to financial services.”
According to Coopers, lack of awareness remains a key barrier as a massive 77.2 per cent of the adult population are not aware of insurance. Although largely due to the knowledge gap, the low-income level of the citizens makes it difficult to be convinced of buying insurance on a risk that may not happen, the benefits notwithstanding. Essentially, there is an urgent need to address these issues and grow the insurance industry in Nigeria.” To this development, insurance experts have said that insurance companies in Nigeria must be deliberate and diligent in addressing these issues to curate the lethargy in patronage.
Cooper’s emphasized that the Nigeria populace has more to gain within a thriving insurance industry but first, they must be assured or better still reassured of a new dawn. New dawn would mean building trust and friendship that would enhance reliability. Amidst this would be the desire for the professionalism that would drive excellence among practitioners in the industry.
It would be visible when insurance companies develop innovative policies and packages that are driven by technology and adequately incorporate people in the formal and informal sectors.
Nigerians would then breath fresh air of a new life, new opportunities and new experiences that would make them prime to gaining the benefits of the new-look insurance industry.