Insurance
Major Challenges Facing Insurance Companies in Nigeria and Africa
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Why are Nigerians and Africans not investing in Insurance?
Are you searching for the Major Challenges Facing Insurance Companies in Nigeria and Africa?
Do you want to know why Nigerians and Africans at large do not go for Insurance?
I am gonna talk about some of the reasons why Nigerians and Africans at large do not go for Insurance in this article.
Poor Marketing – Lack of Sensitization
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Anything “insurance” demands serious research and meeting the right people. Many Nigerians and Africans won’t know about it if they are not educated on it.
Sadly, many political leaders don’t even talk about it in their campaigns. It has to be garri, 1k, bread, packaging an old man, or enthroning new pilots.
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And this is me speaking from the perspective of having had a very deep interaction with an insurance broker.
When you look at our nation, you’ll find that most prospective insurance buyers are in churches and in mosques.
My question; how many Pastors and Imams actually talk about these things?
BTW, I am not saying that it is the responsibility of the religious leaders BUT what I am saying is that they also have a role to play in the mass education of the people on the essence of insurance.
It will solve a lot of emergency prayer points.
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The insurance companies on the other hand have to adopt a marketing strategy that will work best for persons between 18-40 because people in the age bracket don’t even think about insurance.
They don’t understand it. They think it’s for their parents and grandparents, It’s an old people thing.
So on the part of the insurance company there had to be mass awareness and education of the people on the importance of insurance.
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Poverty
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In a country or region where hunger is high, people hardly think of life after death. “Give us this day our daily bread” occupies the mind of many. How can a man think of insurance when he is yet to eat?
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Everybody thinks religion is a major factor affecting Insurance in Africa but they forget that 60% of the population live below $1 a day. 33% of Nigerians are unemployed. That’s about 66 million Nigerians.
Nigeria is not a market for a product that can be easily replaced with something else.
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Hungry and a man under financial pressure don’t think of insurance, he thinks of survival.
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Some people know the importance of insurance but the pressure in this country might make them overlook it
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Insurance Companies not doing enough to Educate the Public
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Those in the industry i.e. the Insurances Companies, brokers, etc aren’t educating their target audience well enough. They only go for the big shots. Insurers in USA, UK, Canada, Europe, etc invest so many resources educating their target audience, but here, they aren’t doing much.
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In fact, the blame comes from the mentality of we Nigerians. Our insurance companies have the mentality of an average Nigerian. They hate to spend on educating their prospect.
Insurance companies in Tier 1 countries invest heavily in ads/awareness unlike Insurance companies in Nigeria and Africa are not investing in advertisement or awareness.
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The religious are not speaking about it because the Insurance companies didn’t reach out to them to speak about it. (They are neglecting their market).
The first step to solving this issue is when our Insurance companies in Nigeria start to reach out to public figures, bloggers, religious leaders, influencers to create awareness amongst our people.
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Religion
Our people’s insurances are in God through the churches they attend or in the various shrines where they get fortification by the deities.
Yes, it hurts me to hear, God is my insurance till when it happens and reality dawn’s on them through experiences of colleagues and friends.
I had this conversation with a friend who’s an insurance broker and from what he said to me, I think religious beliefs are actually some of the most limiting factors why people don’t do insurance.
When you go to an average person and talk to them about life or health insurance, most of the responses you’ll get are things like “I’m not dying, How can I be planning for death” and stories of that nature.
But I think these insurance brokers are only trading blames.
Because when you take a second look at this, what you’ll find out is that these people are actually very naive about what insurance really is.
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So I’ll strongly recommend that insurance companies step up their game in the massive education of the masses.
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How many of these Insurance Companies are talking about insurance on social media?
The way humans are wired, if you consistently talk about something to them, gradually they will begin to buy it.
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Government Negligence
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And yes, the role of the government in this cannot be ruled out or over-emphasized.
I wouldn’t say insurance companies aren’t playing their part best way possible but then how is the government supporting them by ensuring policies on insurance are adhered to in every sector of the economy generating revenue.
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Let’s look at the common compulsory 3rd party car insurance? Should we go there? How many cars on the streets of Nigeria have them?
There is a lack of sensitization from the government too.
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Lack of Interest from the People
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I for one believe Nigerians have their mentality of it’s not forced on them, or if it’s not a regulatory requirement, forget it. Look at the port sector, Marine Insurance is compulsory and yet I wouldn’t want to say the politricks happening within the industry where people pay bribes to avoid it or forge Insurance documents.
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I do know some radio programs make insurance a vital topic, I have anchored some programmes to being invited to talk about it. I have come to say that Nigerians have an idea of insurance but we are just negligent people till matters have become bad.
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How many youths listen to radio/ Tv for educational programs that would add value rather majority are washed up by entertainment. Easy way of getting information if you don’t push them so they can push blames on someone.
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Insurance is real in Nigeria. Just do your research, ask the right questions no sentiments and take ACTION.
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Nigerians know how to give excuses, procrastinate, attach sentiments more than reality. Imagine a compulsory law that every organization with 3 staff and above should have a group life Assurance for their staff, how many have it? And even if your company doesn’t do it for you, I ask people why can’t you take one for yourself? Insurance investment in Nigeria and Africa is really long journey.
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Fake and Fraudulent Insurance Companies
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Nigerian insurance companies can be dubious.
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There’s also the case of fraud, Insurance companies defaulting when payment is needed. Nigerians don’t have. When something real happens, to see money from these Insurance companies will be a problem.
Nothing works as it should in Nigeria. My parents have Health insurance and I can tell you there’s not much difference between them and those who don’t have
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I have played in the industry a bit and can tell you that it isn’t because of a lack of knowledge or religion that only affects Insurance investment in Nigeria and Africa.
I think it is because Insurance companies in Nigeria will tell you stories when it is time to indemnify you and there is no competent legal system to hold them accountable.
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I cannot start recounting personal encounters that close family members have had with them.
The main issue here is the refusal by insurance companies to pay up when it’s time and Nigerians don’t have that patience so they rather channel their energy into other options.
Insurance companies here act like criminals. They have no intention of paying.
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Conclusion
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These are some of the factors that hinder the growth of the Insurance Sector in Nigeria and Africa.
There are numerous benefits of Insurance if done with a legit Insurance company. Follow this link to see the various reason why you should invest in insurance
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