6th July, 2016
By Frank Aroyewun
Low penetration, poor publicity, slow growth, poor perception from masses, low income, ignorance, meagre managerial stratagem and poor government support in the form of enforcement of the law are what could be considered inhibitive factors affecting any meaningful growth of insurance in Africa’s giant and most populous country, Nigeria. This country is profoundly endowed, blessed with enviable resources and supposedly advantageous to the numerous business opportunities and prospects.
Religion has also been a militating factor, the idea of a bad occurrence scares people and sadly there is a ready- made answer of attributing it to the God factor, hence the cliché ‘God is our Insurance. This is true and one can never disregard the authenticity of this claim, however the bible does not say we won’t experience some form of difficulties or hazard- free lives- independent from certain mishaps and that is why the same Holy Book says “A prudent man foresees the evil, and hides himself; but the simple pass on, and are punished.” This is so crystal clear: the classic story of Joseph and how he saved millions from famine by taking the necessary steps in assuring lives and insuring against the impending disaster is a test case. Through the use of insurance, a bread winner is able to secure the needs of his family should he die or become disabled, by the use of insurance we are able to compensate others adversely affected by our actions -such as when we accidentally ram another fellows vehicle or your building gets ingested by fire which was sparked up by a lightning bolt- who says strange things do not happen?
With a population of over 170 million in Nigeria, insurance sadly has less that 5% penetration. Certainly, Nigerians do not have Insurance as priority in their plates. Even if the reasons are known but the age long apathy is worrying some. How can you sell a product to someone who in the first place does not believe in it and to make matters worse not being able to enjoy its services until a mishap occurs. Selling insurance to a “die- hard unbelievers’’ you have the challenge of educating them what insurance is all about. In essence share the gospel of insurance. 
Nigerians are renowned to be lovers of quality and expensive items but providing succour in the case of mishap or calamity still won’t attract them to Insurance. No one really likes the taste of bitter herbs but we are not ignorant of the superb benefits it does to our body. What am I saying? There are stuffs we do or take and gladly accept in different aspects of our lives though it’s highly inconvenient but because we know the truth about it, we have no choice than to do it. What about those who kind believe in it very partially, well they are the ones who consider it a sort of scheme- like insurance is going to swindle them, Insurance is not meant to swindle, but rather to be your third leg when either of your leg breaks by accident or create a palliative.
The Nigeria economy is going through trying times. The minimum wage has been an endemic issue. A Nigerian lowest paid worker earns about N18, 000($63) monthly which is a total disappointment and a pain in the soul bearing in mind the inflation crises. This can hardly take care of anything be it house rent, electricity bills, gas, food, hospital bills, leisure, school fees (if he has kids) and transportation. Would you really blame this man if he has no insurance? He cannot even afford the very basics. This goes far beyond the mere perception a typical Nigerian views insurance. Where in the world do you want him to get money for securing an insurance policy? As cheap as the rates are, it may not be cheap enough to get a dime from this man’s hand. Although insurance companies in Nigeria have been able to thrive especially by creatively collecting relatively small premiums from individuals and organisations which when combined would have resulted to a large pool of funds for investment and sustainability purposes which is very well encouraging. To summarize this, low insurance penetration and acceptability is not only considered the citizen’s fault but the government’s. The government should be blamed for failing to support insurance in the country. Just some weeks ago the Nigerian senate voted against the idea for owners of private commercial buildings to have comprehensive home owners’ insurance. Not even the regulatory bodies such as the National Insurance Commission (NAICOM) and the Nigerian Insurers Associations (NIA) could respond to that SOS by opposing the rule over.
While looking through a list of top most dreaded marketing jobs guess which made the number one list ahead of micro-finance bank, commercial banking, and network marketing- Insurance of course.
One needs to have a look at some insurance agents- they look impecunious and diffident steps tell it all. They need you to buy an insurance policy, no- I didn’t put that well-they are practically begging you to buy an insurance policy. They will trail you, cry to you and hope you will pity them and buy just one policy. Dear reader, it’s that bad. Potential buyers technically dodge them. It buttresses the earlier explanation- trying to sell insurance to an unbeliever won’t work. You got to spell it out for them. Tell them why they need it. Have a witty discussion. Skip the boring stories. Go straight to the point and ensure you prove that point. When you go out marketing insurance let it be their loss if they do not buy that insurance. You may ask what if they have that same insurance policy you want to sell to them, well there all many other things to insure against, so make sure you talk.
What about competitors? Now this is not my business but the industry’s business. I am speaking for all insurance companies but if you happen to be in it, this is where publicity will pay off. Yes to a large extent.
Steuart Henderson Britt once said “Doing business without advertising is like winking at a girl in the dark. You know what you are doing but nobody else does.” Everybody likes to be dazzled. So be in the spotlight. That’s where everything happens. Steal the moment. A little fun and paparazzi can just give you an edge. There is little awareness about insurance across the country. Commendably there has been improvement over time but there is still a long way to go. This is where branding comes to place. You need to go a little gaga on adverts, commercials, campaigns, posters, CSR, and PR. You need to dazzle the public and change their mindset about insurance. You are not the only insurance company out there. This industry is highly competitive and hard to sell to begin with. You have no choice than to outwit your competitor by showcasing yourself. Sometimes weaker things beat the stronger. The battle is not for the strongest. When your brand constantly sinks into the heart of the public, they will remember you first above others. Remember, as an insurance marketer, you got to know what you are up against- selling the so called most difficult product or service and that you must do with a smiling face, witty dialogue and a good tie along with a matching suit and less I forget please comb your hair. If they don’t believe your product having done all, don’t beg. Never beg. You are not selling begs for crying out loud. All you need do is place a call the following day and ask them if they have thought about it. Keep tabs with your potential clients and put a leash on them so that they succumb to your advice of securing an insurance policy with you. That will do you a whole good.
Insurance companies need to stop complicating matters. It’s one thing having a variety of products but it’s another stashing up similar products with little or no disparity. The poor managerial stratagem makes matters even worse. Competent individuals who will not just think outside the box but go ahead and create their own boxes which will reflect via innovation of first class products, quality infrastructure facilities for ease of business, implementation of ICT and TQM in their business environment. This will certainly increase the value of your assets. Let’s not forget that the insurance industry is vital part of the financial sector.
Insurance is a big deal in developed countries and accounts for a large fraction of their total economy whereas it accounts for less than 1% of Nigeria’s total GDP– I mean, a singular telecom company in Nigeria alone contributes 5% to the GDP of Nigeria while the GDP of one of the most popular banks in Nigeria outweighs the GDP of all the insurance companies in Nigeria put together. On the positive side, Nigeria has well over forty insurance companies’ not excluding reinsurance companies and some of them are doing impressively well in their own regard. GPI’s are skyrocketing over the years, and claims are being settled as at when due which is a clear hint to the true insurance opportunities that exist here in Nigeria. This is just the beginning and a lot of patience and perseverance will need to be exercised in order for this industry to gain wide acceptability as we see in developed countries like the United States, France and Japan.