Nigeria Reels Under Low Insurance Adoption
. Stakeholders Worry As Nation Records Less Than Two Million Policies
. Strategise To Improve Insurance Services
By Fredrick Wright
The low adoption of insurance policies by Nigerians has been described as a setback to anticipated development in the sector and the economy as a whole.
Major operators who gathered at the Insurance and Pension Editors of Nigeria (IPEN) 2023 Roundtable held in Lagos, linked the problem to inadequate service delivery, lack of confidence by insurers, bureaucracy in claims redeeming and poor public orientation, among others.
National President, Association of Registered Insurance Agents of Nigeria (ARIAN), Kazeem Olakunle Odewunmi, said there are less than 2 million policyholders in Nigeria.
He said: “Currently, less than 2 million policies are sold in Nigeria, out of a population of more than 200 million people, so the penetration is still very low. Nigeria is ranked about 64th in the world. In Africa, South Africa is leading with 15 cent followed by Egypt 13 per cent, even Kenyabis ahead of us, holding above 3 per cent. This shows that Nigeria is still far behind in terms of insurance penetration”.
He urged members to further adopt personalised service with customers to promote policies and attract more prospects.
President, IPEN, Chuks Udo Okonta, said, achieving service excellence in the sector is a collective effort by all stakeholders.
He said: “Several reasons have been adduced for poor insurance penetration in Nigeria ranging from the country’s peculiar market environment, limited public awareness and negative public perception by those who are unaware of insurance. But in the reality, inadequate service delivery is a major challenge to why insurance acceptance has been very low.
“Although, the insurance industry is expected to hit N1trillion Premium income target in the current 2023 financial year, a feat that was expected to have been achieved 8 years ago, precisely in 2015, the pension funds asset in the kitty of the pension sector are expected to surpass N18 trillion by the end of the outgoing year. Yes, these are and will be great achievements, however, they were long overdue as this is barely scratching the surface of potentials and opportunities that are existing in both sectors,” Okonta said.
He emphasised that, “The need for service delivery in the pension sector is key for the overall success of and sustainability of the Contributory Pension Scheme (CPS), considering its retail nature. Achieving service excellence in the sector is a collective effort by all stakeholders to ensure enhanced service delivery,”
Head, Lagos Office, Federal Competition & Consumer Protection Commission (FCCPC), Mrs Susie Onwuka, said the industry needs to do a lot on customers satisfaction and enlightening the customers on critical clauses that can void a policy, rather than shocking them with such clauses at the point of redemption.
She highlighted the major challenge with insurance in Nigeria to include; bureaucracy in accessing claims, poor understanding of policy clauses, noting that some policies are too rigid for customers to understand.
Keynote Speaker, the Director, Centre for Pension Rights Advocacy (CPRA), Takor Ivor, said: “Now is the right time for leaders in both insurance and pension industries to rethink, redefine and transform what their teams deliver and how this is delivered,”
He noted that, “Transforming service delivery models will improve inside-led decisions making, so that insurers and PFAs can exploit market opportunities in a strategic, safe and informed way. Building an inclusive culture for service delivery has to be deliberate.”
