The inclusion of robust grassroots- oriented micro insurance products and elimination of negative hearsay on the sector through transparent practices had been tipped as measures that will drive the growth of the insurance sector.
Professor of Insurance and Risk Management, Professor Festus Epetimehin, of Joseph Ayo Babalola University (JABU) disclosed this recently at stakeholders’ forum in Lagos. He said that the consumers, Insurance Practitioners and the Environment hold the key for the expected growth of the sector.
He said that with harmonization of the three segments by the insurers, the sector will attain a reasonable growth momentum and contribute meaningfully to the nation’s GDP
On how the consumers have contributed to the sorry state of the sector, Epetimehin said that the average Nigerian has negative disposition towards purchasing insurance, hence they believe that insurance is a luxury and not essential for survival and also that people have grossly inadequate income to meet pressing commitments and therefore no excess to buy insurance policies.
He added that the people are uncertain future which continues competing with the present commitments, wrong notion of insurance, unsatisfactory claim experiences. According to him, insurance is introduced to most people in the country, after consumption habits have been formed and that in many cases, peer groups provide alternative to insurance.
The expert said that insurance professionals have also helped to underdeveloped the sector. He said, “The practitioners are themselves responsible for the ‘No’ demand state for they have not embraced any pragmatic marketing approach. Insurance should be aggressively marketed. The present marketing mix of most insurance companies does not reflect that. This indicates that, there is lack of innovation in product development and risk taking.”
He added that the level of disposable income, low level of education and literacy as well as other socio-cultural factors, particularly religion plays major role on the environment putting a clog in insurance wheel of progress.
“Similarly, the retail segment has witnessed increasing terminations of insurance policy and insurance companies had to adopt robust risk management frameworks and deploy cost optimization measures to ensure obligations to customers are met,” Epetimehin added.
According to him, credibility on the path of practitioners has remained a major issue and disincentive to the insuring public
Expressing concern on the challenges insurance policy holders encounter when seeking for indemnity of insurance claims, he said that confidence in the industry has remained low.
He however urged insurance practitioners in the country to boost their product designs, market delivery, for policy holders and greater effort towards reaching the unreached areas in the localities with well thought out micro insurance products.
“Insurance is driven by agents who receive commissions on businesses done, and they will always prefer deploying their resources t where they are sure the target clients are, in the cities, than in the rural areas, which is why it will take time to cover the local areas where opportunities remain thin.”
The insurance system is driven by sales. Sales, he said, starts with prospecting which leads to solicitation and an interested buyer. Once the prospective customer has been identified, the broker or agent gathers information from the prospective customer and attempts to design the program that they think will best meet the customer’s needs. After the program’s products and services have been designed the broker/agent selects the carriers that they think are best suited to the customer.
Stories: Bonny Amadi