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Lack of trust, understanding prevent youths from embracing insurance

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By Cynthia Alo

LACK of trust and poor understanding are driving Nigerian youths away from embracing insurance products and services.

Vanguard investigations revealed that youths consider insurance companies inefficient and not trustworthy while some believe insurance is for the rich.

“I will rather put my money in a fixed deposit account than take up an insurance policy”, said Amalu Robinson, a graduate of University of Nigeria, Nsukka, UNN.

Responding to Financial Vanguard inquiries, Robinson said: “Lack of claims settlement and flexibility of the policies are factors responsible for youth negligence towards insurance.

“Insurance is a good idea but for the unending protocols encountered during claims settlement. For instance, someone might pick up a policy, in the event of loss you engage in a stressful protocol while trying to get your claim settled. There are a lot of protocols regarding claims settlement in Nigeria. I know that to make a claim requires a lot of security checks but the protocol is time-consuming in Nigeria.”

On his part, Precious Okafor a student of the Institute of Chartered Accountants of Nigeria (ICAN) said though he believes in insurance, he feels that the insurance industry cannot be trusted.

He said: “Some insurance companies engage in unending stories when you make a claim because they don’t want you to take what you have put in”.

Daniel Ugwu, another student of ICAN, however, believes insurance is for the rich. He said: “Insurance is specifically for the rich. It is only meant for those in the corporate world such as Aliko Dangote and until I reach that stage I have nothing to insure.”

Insurance operators, however, attributed the perception of the youths to lack of understanding of recent developments in the industry as well as the hasty nature of youths.

Executive Assistant Secretary of the Nigerian Council of Registered Brokers, NCRIB, Mr. Tope Adaramola said that the problem of poor public perception has been and still a problem the industry is struggling to combat. According to him the younger generation always want quick means of getting things done adding, “Insurance ensures you are compensated for your loss but must investigate circumstances surrounding your loss and there are certain procedures put in place before you are paid.”

On the issue of trust, Tope stated “When you have taken up a policy with any insurance company and it refuses to pay as at when due, you can refer them to any of the three bodies namely, National Insurance Commission, NAICOM; Nigerian Insurers Association, NIA; and Nigerian Council of Registered Brokers, NCRIB, and the defaulters will be dealt with accordingly.”

Speaking on condition of anonymity, Head of Non-Life Retail business in one of the top insurance firm, said: “Nigerian perception about    insurance has to be worked on as most consumers buy without proper understanding of the purpose and usefulness of the policy they buy.

“As for the younger generation    whose interactions with technology is on the increase, if insurance must be at its peak, we must upgrade our approach to marketing by focusing on e-marketing and interactive feedbacks for improved clients servicing since the youth of this day are known to be social media freaks, we must use this approach”.

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