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Insurance groups in search of growth strategy

By on September 16, 2014

“Instead of being the primary consideration in the order of priority, insurance is usually consigned to the rung of priority by many Nigerians. This has definitely led to unnecessary misery by the people in the event of a loss to their lives and properties,” he said.

These are the words of the President, Nigerian Council of Registered Insurance Brokers, Mr. Ayodapo Shoderu, as he paints a gloomy picture of the insurance business in Nigeria.

Shoderu said one of the problems confronting the industry was low acceptance, occasioned by poor awareness about its benefits to everyday living.

At present, he said Nigeria was a production rather than a service-based economy, adding that the common man was only ready to buy physical goods rather than pay for intangible services.

But the NCRIB boss noted that the services sector had become a dominant force in many national economies and could be seen as the nerve of great economies in the West and Asia.

A recent study, according to him, has established a clear correlation between the level of economic development in an economy (as expressed by the gross domestic product) and the strength of its service sector.

He stressed the need to continue to promote the value of the insurance services generally, through proper enlightenment.

Insurance operators have thus stressed the need for the various groups in the industry to come together to develop a new strategy that will foster the growth of the sector.

The different bodies that make up the insurance sector in the country are the Nigerian Insurers Association, Institute of Loss Adjusters of Nigeria, the NCRIB and the Association of Registered Insurance Agents.

They are regulated by the National Insurance Commission and united by their educational training arm, the Chartered Insurance Institute of Nigeria.

The Commissioner for Insurance, Mr. Fola Daniel, said, the industry must come up with new ways of doing business in order to achieve better result.

“Our marketing strategy must change; our product design and packaging must change; our approach to policyholders and their complaints must change and all hands must be on deck to ensure that the message of insurance is taken to the grass roots,” he said.

Daniel said that if it must move the insurance market from its present level to an optimal pedestal within the financial services sector, there must also be a consensus on how best to tackle the challenges.

He said the insurance sector had a lot to offer but was not yet taking advantage of the huge potential before it.

The NAICOM boss said the fundamentals for thriving insurance industry, such as a vast population, an active economy and a well-capitalised industry were available in the country.

“NAICOM is actively committing resources to up scaling insurance education in tertiary institutions in the country,” he said.

In furtherance of this resolve, the commissioner said no fewer than eight tertiary institutions had benefitted from the commission’s financial support.

The Director-General, NIA, Mr. Sunday Thomas, expressed worry that insurance industry had continued to be bedevilled by several challenges relating to image and public perception.

Some of the challenges of the sector, he said, included poor public perception as many viewed the industry’s mode of operation as conservative.

He said, “It is always the norm to compare the insurance industry with its twin brother – the banking industry – with a conclusion that the latter has continued to fare better in terms of public image and perception.”

Thomas said there was a relative absence of the insurance from public consciousness because members of the public often did not see its services as fundamental to their existence as banking services.

The NIA boss also observed the development of the industry was adversely affected by the poor standard of living of Nigerians, their low disposable income, poor attitude to savings and risk management, unlike what was obtainable in other developed jurisdictions.

Other challenges, he added, were faking of insurance certificates, industry practices that were not consistent with sustainability; cutthroat competition; poor industry database; skills gap in highly technical areas of insurance operations such as marine and aviation, oil and gas.

He also observed that there was poor attitude to training and human capital development as well as less than optimal financial literacy.

The President, Institute of Loss Adjusters of Nigeria, Chief Lebi Omoboyowa, said operators need to improve in the area of insurance penetration because it was presently too low unlike advanced countries where the reverse is the case.

He emphasised the need for them to work with the media and also use the different social platforms on how to increase insurance knowledge in the country.

The President, Chartered Insurance Institute of Nigeria, Mr. Bola Temowa, said the institute remained committed to the goals and objectives of its annual forum as a single most effective platform for deliberating on issues about the sustenance of the ideals of its professional callings.

He said that it was relevant in positioning the industry within the financial services sector of the economy.

According to him, the institute is focusing on new trends and strategies, which will focus on areas such as investment and investors interest; human capital development; clients’ services; financial reporting; market expansion and penetration.

As the educational arm of the sector, he said that the institute was already making significant progress in different area such as the commencement of academic activities at the College of Insurance and Financial Management, establishment of its E-Library, and provision of adequately trained manpower at the institute’s secretariat for improved service delivery.