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Need to shift focus from premium growth to insurance education

By ROSEMARY ONUOHA
In the past, insurance operators are more focused on how to raise their yearly premium, abandoning the need to create expansion through good services and people tailored products.
Unfortunately, this contributed to the persistence of low financial literacy in the insurance sector and the concomitant low insurance penetration in the country.

However, for the industry to make the desired impact on the economy, it is pertinent for it to reach the critical mass necessary. Accordingly, insurers must begin to think about contributing their quota towards financial literacy in the country.
Decrying the low financial literacy in the country, Commissioner for Insurance, Mr. Fola Daniel said that insurance is not very popular in our country for various reasons amongst which are; low level of financial literacy, lack of adequate awareness of insurance mechanism and poor perception of the industry.

Daniel said that insurance practitioners need to come together to tackle the menace.
For Managing Director of Riskguard-Africa Nigeria Limited, Mr. Yemi Soladoye, the future and solidity of the Nigerian insurance industry can only come from market expansion, hence the concentration on premium growth, as against market expansion by insurance operators is inimical to growth.

Soladoye said that the issue of unhealthy competition will be getting worse until insurers look for better, cost effective and non-volatile distribution channel.
For Gbong Gwom of Jos, Da Jacob Gyang Buba, much of the public misgivings about the insurance industry in Nigeria are due to ignorance and lack of proper understanding of insurance mechanism as a tool of risk management by the people.

The way forward
For President of the Nigerian Institute of Marketing of Nigeria, NIMN, Mr. Ganiyu Koledoye, personal relationship is an important tool that should be taken seriously if the insurance industry wants to grow.
According to Koledoye, such relationship binds the customer and the operators together.

According to him, most operators know little or nothing about their customers and are mostly concerned with only renewal of their premium, adding that insurance industry will move forward and grow penetration when they start to relate on personal level with the customers.
For Gbong Gwom of Jos, insurance operators must be more forthright in their dealings with the public so as to erase the negative perception of the people about the sector.

Also, he said that the National Insurance Commission, NAICOM, should embark on aggressive public enlightenment campaigns to educate the people about the benefits of insurance.
He said that there is need for NAICOM to continuously embark on awareness drive that would enable the people know insurance as one of the means of managing their risks.

 

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