By Rosemary Onuoha
The insurance industry has restricted their products and services to city centres thereby depriving rural dwellers of insurance benefits.
Mr. Rufus Olubunmi of Nem Insurance Plc, who disclosed this at the Education Seminar of the Chartered Insurance Institute of Nigeria, CIIN, said that the Nigerian insurance market is grossly underserved.
Olubunmi said, “Nigeria is grossly underserved with insurance service. Nigerians who are alienated to insurance service do so not because they did not like insurance service but mainly because the services of insurance have not been extended to their locality.”
He said that most Nigerians, especially those in the rural areas, have no idea of what insurance is all about, and what benefits they can derive if they have insurance policies because most rural dwellers lack insurance awareness.
Olubunmi stated that while the banking sector have successfully spread their services and branches to the remote parts of the country, the insurance sector is yet to do so, adding, “Most insurance companies have concentrated their operation in the major cities particularly in the state capitals.”
He said that expanding insurance penetration will definitely enhance and improve performance of any insurance company, adding, “For any insurance company to increase penetration of insurance products and services in the market, as well as take insurance closer to the insuring public, it is important to study the economic growth and challenges by planning towards opening more branches or through agency office, upgrade the operational infrastructure, improve the skills of personnel and let them have sense of belonging among others in line with the implementation of new business strategies.”
Olubunmi however stated that the challenges facing Nigerian insurance industry are numerous, adding, “Poor product distribution channel, so far it appears to be only one well-developed distribution channel, the broker channel which control about 70 percent of total premium generation in the market. Other distribution channels such as agency networking, financial institutions, and electronic channels have not been fully explored for insurance to make major progress in income generation.
“The industry needs to develop the technical capacities to meet the emerging micro-insurance as well as design more dynamic strategies to deepen insurance reach to the vast populace. Other challenges include the level of poverty in the country, people, even the government fail to put insurance on their priority list, although some factor may be attributed to this which include lack of trust/confidence in the industry.
“The message of insurance must be spread very widely that we are providing essential service to the society and that we are providing economic security which is the current need in this era to every individual. It is high time the populace is made to realize that no economy can survive without insurance because the world is a risk.”